Technology Solutions for Better Employee Management

Let’s face it, human resource management is often considered a time consuming “administrative” task, rather than a strategic planning task. With all the paper work involved in normal human resources (HR) processes setting up a new hire, changing employee demographic information, performance reviews and benefits enrollment/updates, there can be significant time saved with HR management software.

Equally daunting for many small businesses is government compliance. Not only is complying with the Immigration Reform and Control Act (IRCA), Fair Labor Standards Act (FLSA), Health Insurance Portability and Accountability Act (HIPAA), and many other regulatory requirements more than time consuming ‑ errors can cost money.

For example, errors related to record keeping and employment violations under IRCA

can result in civil fines of $100 to $10,000 per violation for recordkeeping and employment violations. Implementing a human resource management system (HRMS) can enhance efficiency, reduction of routine administrative tasks and possibly eliminate errors and duplicate data entry. Leveraging technology allows HR staff more time to

spend on strategic HR tasks like hiring the right people the first time, motivating and retaining the best employees, and matching the employee jobs and goals to the overall

corporate objectives and less time on administrative tasks.

Core HR Administration Issues:

Many small and mid-sized businesses rely on paper to manage employee processes.

Most employee information is tracked via a combination of homegrown spreadsheets and office file cabinets. Hiring information, payroll records, benefit plan elections, and training certifications for a single employee might be stored in four or more different locations. This invites errors, as well as lost and outdated information. Each change to an employee’s data needs to be replicated across the variety of files and recordkeeping tools. Paper files and non-integrated software tools also make it tedious, if not impossible, to

create timely reports and do analysis.

Software solution:

To achieve better productivity gains in HR, businesses should eliminate as many routine administrative tasks as possible. Implementing an HRMS eliminates much of the routine paperwork and tasks associated with HR by allowing these changes to be done at the point of origination. For example, when an employee gets married and moves, they complete a paper “change” form, send it to HR and then HR enters the information. An HRMS solution could allow the employee to enter their own demographics changes (i.e., change of address or emergency contacts). The employee could also update the appropriate “life event” benefit enrollments themselves online. And once approved, the enrollments are updated automatically and can be sent electronically to the benefit providers. Most solutions also allow HR managers to reengineer their workflows by giving employees and managers online access to their benefits, and personnel and paycheck information. Technology can reengineer the “administrivia” and allow the HR staff to spend more time on more strategic tasks, such as making sure the best employees are happy with their jobs and getting the training and leadership they require; providing more opportunities to promote from within; and making sure performance reviews and goal setting are done in a timely manner. These strategic tasks can help create a motivated and efficient workforce, maximizing the return on the company’s payroll

costs, and help keep good people in your organization longer. An HRMS centralizes employee and payroll data and helps to formalize the processes. Because the data in an

HRMS system is centralized, managers can have access to timely and comprehensive reports and analyses to make informed decisions about the workforce. Reports like comparing compensation ratios to employee ratings may show if the highest rated employees are being paid better within their salary range versus the lower rated employees. Or turnover reports can show if a particular department or location has higher than average turnover. There are several good HRMS solutions available on the market for small and mid-size businesses, such as Sage Abra HRMS, Ultimate’s UltiPro and

Ascentis. Many HR solutions have an integrated payroll option or can be integrated to almost any outsourced payroll service (i.e. CompuPay, ADP, Paychex). In addition, many of the outsourced payroll services offer HRMS features as part of their services, as well.

Government Compliance Issues:

Government laws and regulations form an increasingly burdensome and complex compliance environment for many mid-sized businesses. Mistakes can lead to penalties and fines from the government, as well as expose your company to risk of costly employee lawsuits. For example, the Age Discrimination in Employment Act of 1967 (ADEA) protects workers age 40 and over. The Act applies to most employers with

20 or more employees and states that employers, with very few exceptions, can no longer force an employee to retire. If a company does not comply, then employees may be awarded back pay, reinstatement, retroactive seniority, and attorney’s fees. Another act

that companies with more than 20 employees may need to comply with is COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985). COBRA mandates that employers continue health care coverage for employees enrolled in the benefit plan for a