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Six signs you have outgrown your current HR system

01/03/2023 minute read Nick Gallimore

Traditionally, HR systems have been viewed largely as administrative tools. As you can appreciate, modern HR solutions are far more sophisticated in scope and contain within them the power to transform the people experience, by boosting employee engagement, driving productivity, and most importantly, giving you the oversight you need in order to stay connected with your people, especially given how widespread the modern workforce has become.

Unfortunately, it is sometimes difficult for organisations to recognise the need to make changes in their current solution. Outdated legacy systems across all areas of a business can throw up a myriad of roadblocks and hurdles to efficient day-to-day operations and your core HR processes. These issues tend to pile up to the point where it no longer becomes viable both financially and in terms of the time invested in keeping a dilapidated solution going. HR technology is the most important technology a business operates on, so ensuring that you have a modern HR solution that can grow with you is imperative to business success.

So how do you recognise that it is time to make a change with your HR software? In this article, we have identified the six key points which we believe are the vital signs that you’ve outgrown your current HR solution, and how they can help you focus your search to help you find a system that truly fits your needs.

1. A reliance on inefficient manual processes.

HR professionals have always been the unsung heroes of their organisation. Acting as champions of company culture and practices as well as dealing with myriad administrative tasks around pay, training, and workplace compliance, it is no exaggeration to say that the long-term success of organisations relies heavily on their people teams.

Alongside these existing day-to-day demands, the scope of HR in a modern working world has expanded significantly. In today’s organisations, HR professionals are far more than task robots, dealing with day-to-day administration. HR teams are finding themselves increasingly tasked with taking a proactive approach in delivering insights on employee engagement and wellbeing, using important data and efficient core processes to keep a weather eye on staff retention and any gaps in talent.

Older, more outdated solutions can often present a significant roadblock to achieving these wider goals as HR teams can all too easily find themselves bogged down with complex processes- leaving little time for more influential endeavours that can really transform the people experience. These solutions slow down processes and make it really challenging for HR professionals to get the job done. Furthermore, a reliance on inefficient processes greatly increases the risk of human error complicating matters. Errors brought about by outdated solutions can have a knock-on effect across all levels of a business, such as impacting the pay of employees, as unlike other business software, all employees are touched by the output of core HR and payroll systems.

2. Legal and compliance concerns.

The people management function deals with sensitive personal data daily. This means that security, data integrity, and compliance with laws and legislation have to come as a top priority.

Regardless of sector or purpose, all businesses are beholden to strict regulations and compliance requirements. Sweeping changes such as those demanded by GDPR regulations have also demonstrated to businesses the need to be agile in meeting regulatory requirements. Legacy systems simply don’t offer the complexity and ability to suit these needs and react to changes brought on by turbulent times and legislative changes.

The costs of non-compliance could be back-breaking for organisations: The Data Protection Act 2018, which is the UK’s implementation of GDPR laws, sets a maximum financial penalty of  £17.5 million or 4% of annual global turnover for any infringements.

Regardless of sector, all businesses are beholden to strict regulations and compliance requirements. Sweeping changes such as those demanded by GDPR regulations have also demonstrated to businesses the need to be agile in meeting requirements. Legacy systems simply do not offer the complexity and ability to suit these needs. Older systems can often mean that data is siloed away in unintuitive ways, making certification or proof of compliance with certain regulations far more difficult than it needs to be. Older solutions also offer less visibility, meaning that businesses can, unfortunately, find themselves walking blindly into non-compliance. Every single special listed GDPR category of your people data must be held securely in your HR technology. If yours is not, this should be a trigger for you to go to market quickly.

3. Cannot hire and retain key talent.

Research by Gartner has found that only 29% of business leaders feel that they have the talent in place they need to meet current operational needs. The hiring process is a costly and lengthy endeavour so how exactly can organisations ensure that their talent attraction drives see long-term success through talent retention, and what can their systems and technology do to support them?

Again, the answer lies in the systems which you rely upon daily. Failure to invest in your people management systems has the potential to severely hinder your ability to keep the key talent you need to drive forward success.

Your HR systems in particular should be set up to give you visibility of key gaps in your operational structure which would be best suited to focus on when hiring during a crisis. Older or less sophisticated solutions may simply not be able to offer the granularity of data needed meaning that you are essentially hiring blind, with little to no measures in place to assess the long-term effectiveness of new hires, or how successful your organizational structure is in recovering investment.

By honing the process of retaining your key talent, businesses allow themselves a greater degree of freedom in being upfront about their requirements. Retaining new talent can hinge on the recruitment stage with research suggesting that nearly 40% of new hires leave their jobs within the first six months and 20% of new hire turnover occurs within the first 45 days. If you have a talent-drain problem at your organisation, this could be a vital sign you’ve outgrown your current HR solution.

4. Security concerns.

People data represents some of the most sensitive information your organisation will ever hold. From employee records, payroll information, and GDPR data, the potential security threats presented by an older solution simply is an unacceptable risk for people management teams.

On top of this, factor in the financial risk of your organisation suffering a data breach. The costs to damage-control the breach will be higher by a large margin than they otherwise would have been if you had transitioned to a new HR software on time.

Beyond the financial costs of data breaches, consider the wider impact on your organisation. How does the knowledge of a breach of sensitive information affect how the markets and wider workforce view you? From a workforce management perspective, even a single instance of your data integrity failing can be enough to seriously damage your reputation, particularly among potential new hires.

If you find that a lack of visibility or needlessly siloed or inaccessible data carries the potential threat of a fundamental security risk, this is frankly a sign that you cannot afford to ignore. Explore the potential benefits a new HR solution can provide before these security blind spots can spiral into serious breaches.

5. Engagement and wellbeing challenges.

The role of HR has been undergoing a fundamental shift for many years now with HR professionals being viewed as much more than administrative figures and instead finding themselves embedded as truly influential figureheads of organisational culture.

For the wider HR function, we’ve seen a huge shift in priorities to the point where employee engagement and wellbeing are now considered major focuses regardless of sector. From a business perspective this makes perfect sense- after all, what better way to ensure you’re getting the most out of your people than by making them feel happier and more connected with their workplace?

Your systems and technologies offer you the perfect framework to gain the visibility you need to understand the moods and the level of engagement of your people and more importantly- offer your people a platform to make their voices heard. Unfortunately, many people are finding their older HR systems aren’t capable of helping them achieve this fundamental shift in priorities, or even offering self-serve capabilities.

Outdated solutions tend to treat employee assessments and reviews in a very rigid sense- sticking to more traditional annual review structures. When times of crisis occur, events can be very fast moving and the steps which organisations can take in order to ensure business continuity can dramatically upend existing culture and the people experience. It is important that your solutions offer you the ability to become more agile in how you are engaging with your people- communicating key policy changes and also offering more regular touchpoints in order to understand how wider events may be impacting them. Sticking with your older technologies does not provide you with the opportunity to engage your employees meaningfully or regularly without being time intensive.

6. Bad data.

The accuracy of your data is inextricably linked with the performance of your business functions and the strength of the information at your fingertips will determine the effectiveness of business-critical missions such as talent recruitment and engagement.

Older systems can leave you wide open to a host of data-based issues such as lag times in reporting, inaccuracy, and a lack of integrity, as well as data being partitioned off in silos and inaccessible for many employees. They may not even report at all on certain data categories which are fast becoming imperative to have a firm grip on such as Diversity and Inclusion metrics. This can leave your HR team with less time to focus on driving performance and analysing reports to contribute to important decisions. The real question for HR teams is how they can spend their money in the right place for value-led decision-making. If they can’t, it’s because they haven’t got the right data in the right place, when they need it.

Data accuracy and integrity are core requirements of any organisation, regardless of which sector you operate in. Bad data or even data which is needlessly circuitous to access can cut your people off from vital tools in their arsenal to help them action effective, real-time strategies, drastically impacting productivity. Bad data can lead to you and your people making guesses in the dark and lead to poor decision-making, particularly when it comes to business continuity planning or other emergency measures.

What’s next?

As the role of HR has expanded in scope, the systems and processes which organisations have in place have to be able to meet the challenge of supporting their HR people and moving in lockstep with the evolution of the workforce. The world of HR doesn’t remain static, and the solutions that HR teams rely upon cannot stay static either. The success of HR is integral to so many different elements of an organisation’s day-to-day operation, and a growing recognition that the strategic importance of the HR function rivals that of the Finance function means that the benefits of any new system must be heavily weighed against any disruption which may be caused from a rushed or sloppy implementation.

Ultimately however, the message businesses should be taking away from this is that regardless of the perceived upheaval projects of digital transformation can bring, in the long term, nothing will prove to be quite as costly or disruptive as the ongoing challenges presented by persisting with an outdated solution.

Organisations should be encouraged to take a proactive approach in driving conversations around the suitability of solutions and ensuring that any functionality is specifically relevant to helping them achieve their business goals. Complexity in a vacuum is less impressive than ensuring that your system can help you tackle specific challenges being faced by your organisation and unleash your talent.

We’ve created staff management software specifically to help people teams free themselves from the complexity of outdated HR solutions. We believe in the power of the systems and technology to simplify your core processes and make them easier to get right, which is why we’ve built a solution that frees HR teams and their employees from complexity and enables them to do their best work. To discover more about how Advanced HR can help transform the way you look after your people and empower them to do their best work, get in touch today.