HR & PAYROLL SOFTWARE A BEST-PRACTICE GUIDE
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1 HR & PAYROLL SOFTWARE A BEST-PRACTICE GUIDE TO SOURCING, SELECTING AND BUYING THE RIGHT PRODUCT FOR YOU Call: info@cascadehr.co.uk Visit:
2 Introduction You know you need an intelligent HR and payroll software product but do other departments acknowledge the benefits of new technology? Are you likely to source the system you want but fail at the final hurdle when seeking budget sign-off? Are you more likely to get the system you want if you can demonstrate that you ve thoroughly researched the marketplace, identified benefits to your business and pinpointed the greatest possible return on investment? Following a company merger, recruitment specialist Randstad comprised several operating businesses, each with a different approach to the management of HR processes and data some had software systems in place, some didn t. Human Resource Director Graham Trevor therefore sought an intuitive new product that offered ease-of-use, the latest functionality and a reduced burden on their IT department, enabling Randstad to harness the benefits of a congruent and strategic approach to HR and payroll. In this helpful advice-led resource Graham shares his experience of researching the software marketplace, short-listing potentially suitable vendors and purchasing the chosen solution. While every company scenario and procurement process will be different, this best-practise guide includes checklists designed to help fellow HR and payroll professionals achieve the most value-adding outcome from the buying process. Identifying the need for new technology Some organisations will be starting from scratch when investigating the marketplace for a new HR or fullyintegrated HR and payroll product. Others will seek new technology to replace the outdated software they currently operate. Regardless of the individual situation, some common themes will become apparent that prompt the need to invest in a new product: Too many manual processes Poor data management/lack of central records Lost paperwork Administrative inefficiencies Inability to report centrally Inability to access data when out of the office No technological functionality to support activities such as learning and development, recruitment and resourcing No self-service capabilities Legislative non-compliance Current system cannot evolve as company grows Inconsistent tracking of KPIs Inability to be proactive/identify trends Disengaged employees Limited line manager communication and empowerment A desire to work smarter No Outlook integration Too great a reliance on IT/current suppliers for technological support Poor cost/budgetary control Lack of support from a current software provider Lack of best-practice processes and procedures/process consistency Poor HR and payroll profile in the wider business
3 Lack of effective HR and payroll collaboration and/or integration A growing or ever-changing workforce creating heightened HR/HR and payroll workloads Lack of transformational and strategic HR/HR and payroll activity Consider if your organisation is experiencing any of the above factors. The presence of these issues will then form the prioritised criteria for your new system. Establishing the system criteria Before marketplace research can commence, you need a solid understanding of what the new system must achieve for your organisation. A list of essential and desirable criteria should be devised with the help of other key individuals within your department(s) or throughout the business. At Randstad we assembled a panel of HR and payroll managers, although you should also consult some of your administrators and your FD from an early stage to get their engagement in the project. Do not be tempted to devise a quick checklist on your own one afternoon; this phase should be thorough and considered because it will underpin the success of every subsequent stage of the procurement process going forward, not least the application for budget sign-off. Whilst an additional wish list may evolve along the way, do not let suppliers sales pitches deter you from focusing on the criteria that you originally set out to meet. Our list of criteria was designed to rectify the issues that had initially triggered our need to invest in a new system, plus we had some additional requirements too. When assembling your own system criteria, consider your need for: Flexible, configurable technology Best-practice workflows and process consistency Proactive user prompts Centralised reporting capabilities Ease of use Self-service functionality Line manager empowerment Identification of trends and issues that would otherwise have remained unnoticed A visually appealing dashboard System configurability to reflect your company s needs Secure system access wherever the user may be HR and payroll integration Distinct HR and payroll user profiles and controls Payroll management options, whether the function is retained in-house or you utilise a bureau service One true source of data A hosted service/a system you can host yourself Depth of functionality and option to purchase complementary modules such as online recruitment or learning and development from a single supplier Outlook integration An automated link to active directory Reasonable set-up and ongoing maintenance costs Supplier s consultancy expertise and guidance during implementation Providers flexibility especially during the implementation phase Long-term customer support Comprehensive system training Supplier s commitment to ongoing product development
4 Supplier s independence and financial stability Evidence of long-term ROI Ability to interface with third party software, e.g. total benefit statement providers or P11D software Provider s receptiveness to customer feedback. Researching potentially suitable products The marketplace is crowded with suppliers vying for customers attention and it can be difficult to differentiate between systems, especially if you have no prior knowledge of providers capabilities. Begin your research by: Attending targeted industry events such as the CIPD s HR Software Show that allow you to quickly glean an overview of what is on offer and what is new Consulting authoritative resources such as the CIPD and HMRC websites, and leading industry journals such as People Management and Payroll Professional Speaking to your industry peers regarding systems that they work with, and the benefits/pitfalls of each Reviewing the websites of potentially suitable providers and looking particularly for case studies and client testimonials that evidence the triedand-tested nature of suppliers expertise. Selecting a provider We personally sought a fully-integrated HR and payroll product so there were some systems that automatically did not meet our requirements. However the number of potentially suitable providers that exist in the marketplace will vary depending upon organisations specific needs. We created a scorecard where desired functionality was scored out of five against actual functionality to ensure a robust and objective selection process. Five vendors met our essential criteria so I asked each of these to come to our offices and deliver a presentation to me as manager of this project. They were asked to highlight what their software did and how it could help Randstad. Two providers demonstrated not only their technological capabilities but also their cultural fit with our business. These final two companies were therefore invited to deliver a second more detailed three-hour presentation and demonstration to the full project team myself as HR Director, our L&D Manager, HR Business Partner, Payroll Manager and Chief Information Officer. An extensive Q&A session followed whereby we could each obtain the further information we required. These suppliers were scored according to our full list of essential and desirable criteria and the provider with the highest rating was selected. Recap: Review the capabilities of different products Create a scorecard and rate suppliers according to their ability to meet your criteria. From this you can draw up a shortlist Invite providers to present to you in person an online demonstration is not satisfactory, nor does it represent a great deal of commitment from the supplier If you allow suppliers to simply deliver glossy, wellrehearsed demonstrations, you may struggle to differentiate between them plus you will not get a true feel for the products features, functionality and quality. You will have greater confidence in the system if you have seen an entire process including authorisation routes, built before your eyes, so prepare specific questions and scenarios to encourage a tailored demonstration. For example: Please show what employee information can be stored and how customisable the fields are. Please illustrate how employee work history is tracked and what functionality there is for storing documents. Can logs be kept at employee record level of any conversations/telephone calls that have occurred with the employee, even after they have left the company?
5 Asking does the software do X? will generate a completely different response to does the software do X and how does it do it? so think carefully about the questions you ask Before committing to a decision, ask to speak to a selection of client references so that you can investigate their experiences of the supplier. Also ask if you can visit the supplier s offices you re just about to invest in a long-term relationship not just a product and it is important that the culture of the organisation is right as well as the system s technological capabilities. An open-door policy speaks volumes about the provider s transparency. Key questions to ask suppliers Questions asked during the selection process should be bespoke to your organisational needs. However a few suggestions to help you prepare are: When I log in I want to know what is going on immediately. Do you provide active features such as dashboards that can show real time management information? Are organisational charts built in? Can we import spreadsheets? Can we store documents and s against individuals records? Can we set up our own business rules such as entitlements and maternity/paternity policies? Can the system manage multiple rules? Can the system manage shift patterns in hours and minutes? Sometimes when managers authorise requests such as holidays they have to refer to other calendars such as Outlook or Excel. Can your system identify resource clashes and show holidays on planner? Can the system manage an appraisal process online and how configurable is this? How does the system track succession planning scores for each employee and how can this be reported to help with talent management? Can the system track what employees next potential roles could be and the timescale involved? Can your system advertise job vacancies on our website? Can you show me how this works? When people apply to our online job vacancies all I receive is a CV and some information in an . I then have to re-key it into our current HR system and file the CVs, whereas I want it to be seamless. Can your system manage this better? Show me a full process from a manager wanting to recruit, through to application and employment of a new member of staff
6 We issue paper course evaluations after training but never get all of them back. Show me how we can do online evaluations with your system I have identified all of the training needs of our staff and now I want to book them onto the right courses. How does your system do this? When a user logs in can they have different levels of access through a single log-in e.g. self-serve, manager, HR user and recruiter Is it one system for everyone or do we have to install lots of systems? Can you demonstrate autonomy in report building for our HR department we don t want to have to rely on IT How can managers run reports themselves without jeopardising data security? I don t wan to run reports every day just to monitor KPIs and then manually deal with the findings. Can your system monitor them for me and take action if needed? When we write a report can we actually use the information to take action? Can I build workflows myself? If so, please build one and run it including decisions, forms, screens, and mail merge s Can the integration between HR and payroll truly work? Will a fully-integrated system allow us to achieve single data entry? Can dataflows between HR and payroll be controlled? How would an annual pay review be entered into the system, i.e. for a mass upload of up to 1,000 new records at a time? Does the system allow for a mail merge to be created to inform employees of their new salary? Can I view copies of employee payslips before I run the payroll. Can I run test submissions at the end of the year? Will payroll functionality comply with legislative updates and industry changes? Will the software evolve as our business grows? Will I have to pay for upgrades? How can I be sure that upgrades will be implemented and work properly? Is everything from a single supplier, i.e. no partner systems, plug-ins or third parties? Is the system process-led? Do I have to rely on you as a supplier to make changes to our software? We want a system that guides users through activities. Show me how the software caters for that Do you have lots of organisations using your system already? Can I speak to some of them? Is the best technology available and if so, when was it released and what future development plans do you have? How many new features have been added to the software each year? Do you proactively provide easy-to-digest user guides, hints and tips so that we can continually achieve the greatest added-value from our system? Will I be able to meet with your other customers so that we can learn from each other? Has the product and/or service achieved industry recognition? Do you offer SLAs and what is your success rate?
7 What support function do you have in place if I need help in X months time? Can your service desk just advise me or can they log-in to our system to provide additional practical help? Will I speak to a real person? Do you have a dedicated account management team? I don t just want to speak to a sales person If we didn t want to host the system on our own server, could you host it for us? Can the system interact with our staff intranet? How can I be sure that my data is secure? Do you have a disaster recovery process in the event of an emergency? Financing the software Even when you have chosen the software that is right for your organisation, there is still work to do in seeking budget sign off. As you build the business case for the software investment, try where possible to calculate the anticipated return on investment (ROI). In addition to physical cost reductions such as lowered cost of absence, better deployment of employees or reduced headcount, also consider intangible benefits like increased efficiencies and ongoing time savings. We were able to forecast that the software would pay for itself in only two years, and we weren t wrong. Remember as well that various procurement options usually exist to suit organisations different financial solutions: Software as a service (SaaS) allows you to invest in the software on a rental basis over an agreed contract term. This cloudbased solution means that client does not have to host the software themselves, and the initial financial outlay is reduced. Managing the implementation phase Once we had selected the preferred software product we worked closely with the provider to agree an implementation plan. Initially we wished to ensure the robustness of our core HR, before integrating payroll, conducting parallel runs and implementing complementary modules such as L&D. We delivered a three-month employee teaser campaign to outline what was going to happen and the benefits. Effective communication at this stage played a fundamental part in achieving enthusiasm and buy-in from the wider company and helped ensure engagement with the system going forward. The teaser campaign was well-received, with our HR and payroll professionals commenting on the impressive look and feel of the software, the amount of information that was available at their fingertips and the intelligent presentation of the data. The involvement of our IT department ensured our technical requirements and capabilities were clear from the outset, however in truth our chosen.net solution caused very little IT workload even though we opted to host the system ourselves. Strong interaction between our IT professionals and the software provider ensured seamless interaction with our exchange server. The system could perhaps be bought outright through phased invoicing or through finance agreements over two or more years thus spreading the cost. When the finance is completed the only other costs are an optional support fee
8 Understanding the benefits of a new system The benefits experienced following the bestpractice sourcing, selection and procurement of a value-adding software product will vary according to each implementation project. However one thing is for certain if the process is carefully managed, the advantages are numerous. Benefits may include: Improved process efficiency Significant reduction in administration time and thus cost-savings Creation of best-practice workflows ensuring the right tasks are undertaken by the right people at the right time Reduced paperwork which heightens data accuracy and security and supports organisations environmental initiatives too payslips can even be distributed electronically Error reduction Awareness of problems before they affect the business Availability of information at users fingertips without having to rely on HR, payroll or IT assistance Employee empowerment and engagement via self service Secure system access wherever the user may be Identification and management of KPIs Identification and fulfilment of skills gaps Heightened access via the software s mobile app One true source of data Greater collaboration of HR and payroll expertise (if opted for integration) Increased profile of HR and payroll within the company Additional cost reduction by recruiting best fit candidates, ensuring focused training plans and conducting accurate salary planning for example Legislative compliance. Ease of system configuration and evolution in line with company needs, using in-built system designer Less reliance on software provider/it due to system s powerful technological capabilities yet ease of use Ability for HR professionals to focus on employee retention, development and wellbeing Ability to be more proactive and make increased strategic contribution to the business Batch upload of data from spreadsheets at the click of a button Real time management information readily available from one source Quick access to sophisticated reports, that can be created with just a few clicks and/ or that can run automatically according to pre-defined triggers Centralised asset tracking and ease of reporting
9 Key advice It is important to remember that with considered planning and preparation the software buying process can be carefully executed and significant benefits reaped. This document is designed to helpfully guide project managers through the various stages, so that potential challenges can be anticipated and overcome, and the maximum return on investment achieved. To recap, key advice would include: Allow enough time to conduct your project because the research, selection, procurement and implementation of new software should not be rushed Do not underestimate the impact that the right (or wrong) system choice can have on the whole workforce. For instance many employees will want 24/7 access to their data and will expect the software to be easy-to-use Graham Trevor Biography Having graduated in 1998, Graham has spent the last 14 years working in a variety of HR management and leadership roles across a variety of sectors, including Retail, Food, Manufacturing and Recruitment. Graham joined Randstad in 2010 and is resourcing teams for the staffing group of business. Graham has a keen interest in technology, and having worked with a variety of software providers is always looking at ways in which HR software can improve the efficiency and impact of the HR function. Clearly scope out what you want the system to do and drill down into the detail of what you want the system to report on Create numerous scenarios of how you want the system to do something so that suppliers can demonstrate how this would be achieved in reality Involve as many people as realistically possible not just HR and payroll professionals but other future users of the system too so that you can obtain their additional input Make sure you consider your future potential requirements and assess the software s flexibility in terms of adapting to your company s ever-changing needs Use the buyer s guide as a checklist when entering your own software procurement project.
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