Author: William CEBS

As a large company, you depend on your HRIS to keep your employee information organized and up-to-date. If you are only keeping employee information for reference purposes, you may be missing opportunities to use the data in strategic ways to help the bottom line. Here are some things some of the latest HR information systems can help you do:

• Utilize web technologies for employee self-service. Why have forms or staff to collect employee information, such as address changes, when you can give employees the ability to do it online?


• Competency management. Through the performance review process, your HRIS can track areas for improvement by employee or department. This is vital for internal training staff to be able to easily evaluate training needs by department or company-wide.


• Career Management. Also collected through performance review, skill sets can be made available on a company-wide basis for internal recruitment efforts, interdepartmental knowledge sharing and workflow efficiencies (less duplication of similar job tasks). This can also be helpful in establishing career goals and paths for individual employees.

If these look familiar, they should; they are some of today’s “next level” HR functions, and they are making their way into the core of tomorrow’s HR information systems. Most top-level HRIS vendors, such as PeopleSoft, have their own established process for these functional areas, so if you wish to evaluate a new system or a module within your existing system, be sure to evaluate the process used for collect and managing the data. This will go a long way towards helping you make the programs successful.

Link to listings of HRMS articles and vendors.

 

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As a medium-sized employer, you need more sophistication from your HRIS than what a payroll or simple recordkeeping program provides. You are growing to the point where managers and employees will rely on the HRIS to provide information that helps employees grow in their job, and managers to help with the job of managing people.

So what are your choices, and how much can you expect to budget for the systems that provide the best value? On average, implementation costs will run anywhere from 2-4 times the cost of the software. So for a $5,000 HRIS system, you can plan on spending an additional $10,000 – $20,000 on implementation alone. These costs generally fall into the following categories, with estimated “market” costs for representative systems:

Cost Item	Description	Out-of-the-Box (e.g., ABRA, HRVantage,	Custom (e.g., PeopleSoft, Lawson, SAP)
Software	Basic system, with benefits and compensation modules	$2,000-4,000	$40,000 – 100,000
Consultancy	Planning and assistance with implementation	20% of software costs	30-50% of software costs
Training	For HR, management staff and employees	20% of software costs	20% of software costs
Conversion of data	Preparing data from old systems to new systems	30-40% of software costs (existing system)	50% of software costs
Hardware costs	Upgrades to computers, network, phone lines, etc.	20% of software costs	20-30% of software costs
Man Hours	Both HR and IT staff (assuming use of consultants)	HR: 200 hours IT: 100 hours	HR: 200-300 hours IT: 200-300 hours

The choice of which systems to use depend on your own circumstances and the amount of customization you need. Therefore the best way to hold down costs is to make every attempt to conform your policies and practices to the requirements of the system you purchase.

Any changes or special programming required will not only add cost, but may push you into purchasing a more custom product, which will generally be more expensive right out of the gate.

Link to listings of HRMS articles and vendors.

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Like many small-to-medium employers, once you reach around 100 employees, organization of human resources becomes more critical.

As policies and procedures grow in number, so does the data created by them. It is also the time when you begin to grow out of the homegrown applications or third-party vendors that define your employee recordkeeping and into the world of full-blown human resource information systems (HRIS).

Here are some questions to ask to evaluate your need for a more robust employee recordkeeping system:

How many different applications, including third-party vendors, are used to track employee information? The use of three or more separate systems (e.g., spreadsheets, databases, payroll systems) is generally an indication of the need for a consolidated system.

Do I have full-time human resource staff? You give your financial staff the necessary accounting and financial programs to do their job, so why not give your HR staff the tools they need to best organize their job, as well as your company?

Do we have the systems in place to support a comprehensive HRIS?

Has it become more time-consuming to respond to managers’ requests for employee information, such as performance review information?

Is there a need to cut down on data entry or entry of duplicative data?

Is the size and/or number of locations for the company making it difficult to maintain employee data in a safe and confidential environment?

Are you looking to in-source functions, such as COBRA or FMLA administration, or payroll processing?

Do you need more sophisticated reporting?

If you answered yes to any of these questions, you should start evaluating an HRIS. But look at improving your current processes first before looking into a new system.

Link to listings of HRMS articles and vendors.

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For the small employer, employee record keeping is hopefully not an adventurous task.

But what records should you keep and how should you keep them? So many companies keep either too much information, the wrong information or none of the correct information. HRMS conversion is a nightmare if you don’t have your records in order.

Here are some guidelines, some of which are mandated and some of which are HR norms:

Each of the following should be in separate files:

• Information that can affect one’s employment, such as applications, resumes, performance reviews, disciplinary actions and training records. This is generally referred to as the employee’s file and is most often made available for inspection by the employee upon request, so it is best not to clutter up this file with information that is not employment related. You may also keep compensation and benefits information in this folder, if only to keep it handy for reference.
  
• I-9 Forms. These are not required in a separate file, but may be convenient if requested by Department of Labor inspectors. If you do your own internal payroll, a good suggestion is to keep these with tax withholding records.
  
• Equal Employment Opportunity (EEO) records. By law, these cannot be used for employment status issues and shouldn’t be part of the employee’s file.
  
• Medical information, such as pre-employment health exams and workers compensation medical evaluations.
  

How long should you keep these records? Again, practices (and state law) vary but here are some recommended minimum lengths:

• Hiring Records (not related to hired employees): One year
• Basic Employee Information (including I-9): Four years from termination
• Payroll and Benefits Information: Five years
• Employment Actions (firing, demotions, promotions): Four years
• Job-related Illnesses and Injuries: Five years
• Medical Exams: 30 years
• Toxic substance and blood-borne pathogen exposure records: 30 years

Link to listings of HRMS articles and vendors.

The information and forms contained in this feature are intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.

 

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