Failures in Human Resources are hard to measure. By nature, HR functions are complex and diffuse, enmeshed in every facet of an organization. They are the first and last faces employees engage with. They handle individual payroll discrepancies alongside constantly shifting requirements from the federal government. The entire department falls victim to a paradox: when you do things right, people won’t be sure you’ve done anything at all. It can be as hard to pinpoint successes as it is to pinpoint failures.
Lawsuits from government agencies or employees are huge and immediate signs that something has gone wrong. And while these signals are devastating, they are relatively rare. Less immediate signs can show up in employee sentiment and performance, reduced trust, and turnovers – all of which can lead to costly losses for your business. Because the tendrils of HR are found in every aspect of your business, there is a way for your HR systems to beneficially impact it. Here are some common HR System Failures, and how to address them:
1. Poor Organizational Communication
97% of employees believe communication affects their task efficacy daily, CMS Wire reported. And in a McKinsey study, better organizational communication showed increases in overall productivity by as much as 25%. In organizations with over 100,000 employees, roughly $62.4 million was lost per year due to inadequate communication. All this is to say that the way employees communicate with one another, with management, and with technology has measurable results. Any attempted communication that goes unwitnessed or unheard has the potential of growing into resentment within your workforce. Resentment quickly becomes HR’s problem. So, start with HR. Developing a centralized communication system that allows employees to interact with all functions of their jobs reduces friction. Some things can and should be automated, and with carefully considered communication software, that automation is revolutionary. Whether they are requesting W-2’s and tax documents, seeking notes from a missed meeting, even filing anonymous grievances, a centralized communications platform can positively impact your workplace. And it can be most effectively begun in the HR department.
2. Clunky Onboarding
Finding, vetting, hiring, and training the right employees are major time and resource consumers for your business. They are also some of the best dollars you can spend. However, without hard data guiding your hiring decisions, it can be difficult to know if you’re hiring for the right position. Beyond that, the entire onboarding process is a massive undertaking – you are showing your company culture, visions, and goals and attempting to get this recruit on the same track as your organization. If you are ineffective in your communication of their role, that nagging resentment can begin to build. As roles are filled with new hires, aspects of the job function may not be articulated, leaving the new person feeling aimless.
This whole process can be positively impacted by a centralized communication system, but it requires more than that. Human Resource Management Systems (HRMS) have training functions installed, allowing the HR department to witness and measure the degree to which the new hire has completed vital training modules. By utilizing an HRMS you can see the successes and shortcomings of your training programs and adjust accordingly. By integrating management and informational systems with your HR department, you will be able to cultivate and analyze data related to specific job roles. Thus, you can ensure that you are seeking to fill the right gaps in your organization, ultimately stretching and streamlining your onboarding dollars.
3. Costly Compliance Mistakes
Compliance mistakes rarely show up as a lump sum loss. They are more like trickling faucets that eventually saturate your foundation and compromise your entire enterprise. Compliance is the bedrock on which HR is built.
Compliance can be a simple task, but it is rarely easy. All you have to do to remain compliant is to accurately follow all applicable guidelines to businesses of your size as defined by local, state, and federal agencies. Failure to do so is punishable by law. But payroll issues can also be punishable by negative employee sentiment. The more compliance missteps in your organization, the more sentiment capital your employee spends. It could be about diversity and inclusion or payroll execution, but each mistake is mentally logged by the employee and it may not always be communicated with you.
The stakes are high and having a professional that handles compliance is a must. But the cost of doing so can be prohibitory, depending on the size and scope of your business. Luckily, there are a few ways to approach the issue of maintaining compliance. One way is to outsource such compliance details to a third-party organization. Another is to purchase specific software that updates with each wave of new regulations. The most well-rounded approach is to adopt a personalized HRMS, or HR Information System (HRIS) that consolidates payroll and tax data in a secure, cloud-based atmosphere with a personal, on-call professional. A custom-tailored HRIS suite can handle high-impact compliance issues, as well as onboarding processes, and communication platforms.
4. Employee Turnover
Think about the HR errors we’ve detailed so far—poor organizational communication, a rocky onboarding process, payroll issues, acceptance of bad inclusion practices—and we have a company no one would want to work for. And as the pandemic rages on, we have seen a shift in the ways people want to interact with their employers. The Society for Human Resources Management (SHRM) published a 2021 study showing a high demand for greater flexibility regarding remote work, decreased use of common spaces, and increased use of automation tools for HR processes. Ultimately, people want to be met where they are and to utilize the tools available. So, if you are having issues with employee turnover, it may be worthwhile to audit your current workflows and see if there are any pain points. Identifying those points can lead you to corrective measures. And if you find yourself with high turnover in your HR department, that should be a massive signal that something is not flowing smoothly.
What To Do About It
Identifying failures is one of the most difficult parts of getting better. Sometimes we conceal the truth from ourselves to avoid pain. But such avoidance is only temporary and usually compounds the issue. By looking at our failures in the face, we begin to respond correctly to them.
The fact is, all these system failures can be alleviated by a variety of HR solutions. According to a 2021 study by Grand View Research, the Human Resources Management Market is estimated to reach $43 Billion by 2028, at an annual growth rate of over 10%. With a market expansion like that, it is reasonable to believe that a solution for you is in there somewhere.
It can be easy to get lost in a market that large. The best thing to do is to look at your business and figure out what it needs. Maybe it needs compliance support, or a new way to field employee issues. Maybe you feel your employee reward schedule needs some tweaking, or that your people aren’t being recognized the way you want them to be. There is a solution out there for you but finding it can be tricky.
When seeking the right solution, you should be sure of a few things:
- That it does what it promises to do
- That it integrates seamlessly with your other software
- That you have support for all users on the platform
- That it can efficiently scale as your business grows
Beyond that, the world is yours. Tremendous innovations are being made every day in this field utilizing AI and machine learning. Many HRIS’s are operating on the cloud which increases data security while reducing the necessity of frequent system updates. The breadth of the field will continue to grow, and the amount of customization will only increase. And it is truly amazing. If you are curious about the ways your business could benefit, reach out and we will help customize a system that works for you.