Ask the expert!
In the Ask the Expert column of November 2009 Newsletter, Ari Kopoulos, National Sales and Marketing Manager, will answer one of the questions raised by a few of our newsletter subscribers – “How an HRIS can deliver a competitive advantage?”
This article is first published in Human Capital magazine – issue 7.9.
Q. We have successfully implemented an HRIS over the last 12 months and have obtained some clear cost and efficiency benefits from automation and workflow. We keep hearing how a good HRIS strategy can deliver competitive advantage. How can we get there?
A. It’s good to see you have capitalised on the benefits of workflow and automation. This is a key milestone in your HRIS strategy and signals your readiness for the transformation into a strategic decision making organisation. By that, I mean you are ready to make decisions based on the information collected in your HRIS grouped into major elements. This is the key to gaining a competitive advantage.
Let’s begin with turnover, which is a dynamic process in any business. It is costly, disruptive and can affect your ability to compete – especially when it means the loss of specific competencies affecting design, production and service.
Understanding turnover and its drivers can provide you with key information about managing staffing needs and the associated costs. Find out why people are leaving; whether certain teams, locations or positions are turning over more employees than others; and whether the turnover is seasonal. This will help you streamline your recruiting and retention policies.
You should look at turnover KPIs by company, by position, by location and by team. These KPIs can also be benchmarked against industry and national statistics to assess whether the turnover is acceptable in the current market. Furthermore, you can overlay this data on top of demographics such as age, gender and length of service to assess any potential diversity issues.
Employee development can also deliver competitive advantage both by enhancing the skills and knowledge of the workforce and by increasing retention rates of key employee groups. Specific areas of analysis include looking at training costs, usage and effectiveness. Make sure you measure these elements before and after training.
Training also has an impact on retention and performance. So you should correlate the training data with turnover, length of service and performance for individuals, teams and positions. Measuring training will allow you to build effective career paths, succession programs and facilitate competency gap analysis.
Competitive advantage can also be achieved by ensuring you have the right talent to execute your business strategy. A fundamental process is needed to establish and maintain positions and job descriptions, including the key competencies, education and experience necessary to successfully perform a job.
Easy access to information displaying the competencies and skills of employees will help you find candidates without the cost of recruitment. Leveraging data within your HRIS can also provide valuable gap analysis, thereby fuelling development plans and the identification of individuals ready for succession. This is a key element to ensure you are never left vulnerable due to the resignation of a top performer.
Recruitment metrics play a key role in identifying successful strategies and ultimately to determine where to invest recruitment dollars. By looking at historical data you can ultimately direct recruitment investment to the most successful sources and channels. The effective attraction, selection, and retention of candidates will assist in your journey towards remaining productive and competitive.
Controlling costs and maximising the use of dollars spent is a key element in achieving competitive advantage and one that should be tracked in every HR process – but let’s also consider payroll, bonus and reward schemes. These usually represent your greatest expenses. Instant access to this information is critical in determining not only allocation of resources, but also whether your HR policies and practices are delivering a good return on investment.
The right technology, mapped against the right processes and in the right hands, will deliver the maximum benefit to workforce performance and efficiency. But having a system that gives instant access to reports and analytics will build a foundation of data-driven decision making and give you the competitive edge that you need.