Looking for a system that increases your organization’s data accuracy, helps you ensure regulatory compliance and allows ad-hoc reporting and analysis?

HRA's Michael Cunningham has some advice for those ready to invest in an in-house Human Resources Information System (HRIS) or Human Resources Management System (HRMS).

While these systems do not replace human resource professionals, it frees them from mundane paper transactions, and enables them to optimize your organization’s internal resources.

But how do you choose from the many HRIS products on the market? 

Michael has summarized key considerations to create  a checklist for small to mid-size organizations to help you assess which option is right for you:

• What problems do you want to solve?
  
  
  • This is a more important question than what you want the software to do. Gadgets and programs can "do" lots of things, but if they aren’t solving a challenge for your organization, what’s the point?
    
    
• Do you need to track employees? calculate payroll?
  
  
  • Do you need support for streamlining recruitment and retention functions?
  • Do you need to track data to gain efficiencies?
    
    
• What is your budget?
  
  
  • Software is just part of the necessary investment. Keep in mind that software is just a 25%-50% of the costs. Hardware, networking, implementation and training can be two to four times the cost of the software.
    
    
• Who should be involved on the selection team?
  
  
  • HR
    
    
  • IT 
    • The HRIS selection to meet IT standards used by the organization, saving money and support time
      
      
  • Payroll & Accounting
    • Related users of the system are more likely to accept the HRIS if they are part of the selection process
      
      
  • Senior Management
    • Implementation and rollout will go much more smoothly if senior management endorses the project and gives it a high priority.
      
      
      
• What to look for
  
  
  • Choose the smallest system that will fill your needs for the near future
    • There is little value in trying to buy for projected needs more than four or five years out.  While larger systems are more flexible and powerful, an oversized system is expensive in terms of dollars and maintenance, in addition to increased training costs. Furthermore, you will find that the largest software vendors are often unwilling or unequipped to deal with smaller organizations.
      
      
  • What is on your wish list?
    • Desired High-Level Functions (What functions do you want to automate?)
      • Core HRIS applications:
        • Payroll – Functions that assist in payroll administration and processing, as well as tax processing
        • Personnel Administration – Functions that track employee data and process personnel and organizational changes.
        • Benefits – Functions that track benefits plans and programs including health, dental, insurance and retirement, as well as enrollment, balances, etc. 
          
          
      • Additional functionality:
        • Advanced Personnel Administration
        • Compliance (Regulatory)
        • Disciplinary actions
        • Performance appraisals
        • Training information/management and skills inventory
        • Recruiting
        • Compensation planning and management
        • Time and attendance
        • Self-Service
          
          
      • Specialty functionality:
        • Stock option management
        • Pension administration
        • Health and safety management
        • Succession planning
          
          
  • Specify functional requirements
    • Describe in detail how the system should functionally operate to support the process.  It is not enough to say, "I want to process payroll." Determine if you need the system to prioritize deductions, allow payroll runs for employees with varying work-week calendars, allow unlimited "pre-payroll" processing to see the outcome of a payroll before it impacts employee records and prints
      cheques or pay stubs.
      
      
  • Specify technical requirements
    • The larger the system, the more complex your choices. For example, very small systems may only require technical specifications such as database type and network compatibility, whereas very large systems will require you to consider how the application connects to the Internet, workflow capabilities, Lightweight Directory Access Protocol (LDAP), etc.
      
      
  • Technical support needs
    • If your organization does not have internal IT support, you will want to know what kind of technical support packages are available.
    • You may also require multiple language capabilities.
      
      
  • Create Your Selection Criteria & Weighting
    • Determine how you will compare competing bids.
    • Use your selection committee to identify priorities and set scoring
      
      
  • Contact Vendors That Have Products In Your Range
    • There are three general tiers of product:
      • Off the shelf systems that are relatively inexpensive, but do not permit tailoring.  Your organization must make its processes fit what the software can do.  These are good solutions for small employers with very basic needs.
        
        
      • Off the shelf systems that offer some customization.  These have a higher price tag, but may be a better fit for small- to medium-sized organizations that need systems that fit their needs.  Sage HRMS (ABRA / ACCPAC HRMS) are in this middle tier of products; they are off the shelf, but allow for customization.
        
        
      • Fully customized systems that are built to the organization's needs and specifications.  These solutions are powerful applications, but usually are only affordable for large organizations.
        
        
  • Develop a Request for Proposal (RFP)
    • It must be detailed enough to yield complete information which can be compared from one vendor to another, but it should not be so onerous as to discourage the small vendors from responding.
      
    • Include
      • Information necessary for the vendor to understand your organization and its needs
      • Number of employees, number of users
      • Objectives
      • Technology infrastructure
      • Set out mandatory requirements in the form of a questionnaire as a helpful tool for both the vendor and the selection committee
        
    • Request pricing, according to specified terms (e.g., by module or number of named users)
      
    • The software selection process
      • Due dates
      • Contact names
        
        
  • Selection Process
    • Based on the selection committee's initial screening, select the top two or three vendors for demonstrations.
    • Ensure the key players on the selection committee are present for the demo
    • Clearly outline to the vendors beforehand which functions you expect to see and in what order (a demo "script")
    • Provide a "score card" for the selection committee to indicate their likes and dislikes during each demo
      
      
  • Make a deal
    • Identify a Preferred Vendor
    • Perform Due Diligence Checks
      • Confirm vendor information
      • Perform reference checks
    • Finalize Contract
      

And now you are ready to get started to put the acquisition to work.  But that's another story for another day...