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Advantages of Automating HR Holding Up Over Time

It’s been a decade since the American Society for Competitiveness study that detailed the advantages of automating HR functions for large and small employers alike. At that time, the authors cited the following principle benefits of HR software:

  • Incremental leaps in efficiency and response time of various traditionally labor-intensive human resource activities
  • Better knowledge management leading to competitive advantage in the marketplace and higher stakeholder satisfaction
  • Improved business performance calculations (e.g., return on training, turnover costs, human-value add-ons) that more clearly establish HR as an equal strategic partner and critical contributor in meeting organizational objectives

Since the publication of that study, particularly over the past few years, the role of HR has become more complex, with the range of human capital management functions expanding accordingly.

HR consultant Amit Bhagria notes that the need to contain costs has been added to this increased complexity, especially in the current demanding economic situation. “The areas that the HR department is now responsible for have become significant cost centers within the organization,” he says. “As a result, it is important that the CFO becomes much more involved in what’s going on within HR, as it starts to have more of an impact on the company’s bottom line.”

Three particular areas are noted where automating HR management and benefits can drive cost savings: eradicating benefits errors, managing attendance, and automating compliance. These functions can provide significant time savings while reducing the risk of liability.

A more subtle benefit is the amount of mundane, repetitive work that will be alleviated from the HR department. “By automating the minute tasks that use a significant amount of time, HR personnel will be available to focus on more complex and needed planning and management tasks that will benefit the long-term growth of the organization,” notes Bhagria.

A recent blog post on the Harvard Business Review site cautions that those updating their HR architecture need to heed two basic principles: one, simplify processes before applying technology, and, two, think through the change-management issues for the people involved. By doing so, you’ll avoid adding complexity when eliminating it was one of the principal goals.

Posted by Malcolm Fox, Director, Product Marketing, Epicor HCM

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