Gotcha! Weigh your human-resources software options with careBy David F. Carr | Posted 2004-05-14 Email Print
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Companies are often better at valuing their inventory than their people.
Sad but true: Companies are often better at valuing their inventory than their people. Yet corporate excellence depends as much on controlling employee turnover as it does on boosting inventory turns. The idea behind human capital management is to gather and analyze data that enables better hiring, promotion and layoff decisions. But when it comes to automated tools, there are several optionseach with their pluses and minuses. No matter how good the package, you still will not want to make a personnel decision based strictly on what the software churns out.
Problem: Niche applications for recruiting, workforce planning and internal talent management may have a functional edge over the human-resources modules of enterprise resource planning (ERP) suites. Yet your company's information technology department might favor an ERP-based approach.
Resolution: Weigh your options carefully. Allan Schweyer, executive director of the Human Capital Institute and author of the book Talent Management Solutions (Wiley, 2000), believes niche products still tend to have an edge in some specialized functions that are critical to some organizations. For example, excellence at sorting through immense quantities of resumes may be of critical importance to a company making a lot of hires.
However, the ERP option offers the advantage of a more integrated system and a relationship with one vendor as opposed to establishing ties with many niche players. "If a company doesn't need best-of-breed, leading-edge technology, it may not want to fight I.T.'s proclivity toward ERP," says Schweyer.
Another alternative you can considera best-of-breed approachmight be a combination of recruiting functionality from, say, a product like WebHire's Recruiter, which helps companies pre-screen candidates, and the portion of the ERP system responsible for creating job requisitions.
Problem: Choosing a best-of-breed package might require more time and money than going strictly with a niche product or with an ERP human-resources module. An interface between the ERP system and the niche products will need to be built. And, as in any ERP implementation, some customization is required. Going best-of-breed will require both.
Resolution: One way to contain some of the cost of integration, according to Schweyer, is to evaluate whether it's really necessary to have real-time integration, with continual synchronization of data in multiple systems. Often, it's simpler, cheaper and sufficient to have records synchronized daily, or as needed.
"This functionality does not all happen in one system," agrees Christopher DeFoe of DeFoe & Associates, a New Jersey consulting firm that specializes in electronic recruiting technology.
Problem: These systems are only valuable if people use them.
Resolution: No matter what approach you take, make sure whatever you deploy is easy to use, particularly if the application must support occasional users.
"You can't select one that requires your hiring managers to be trained because often they only hire once or twice a year," Schweyer says. "If they have to be trained, they'll forget what they learned before they have the opportunity to use the software again."
Spend time reviewing products to ensure that the package you do choose has a user interface that's intuitive and functions that are easy to find and use.
Problem: The employee performance data entered into any human-resources system is often misleading.
Resolution: The answer is to get the right data, of coursebut that's easier said than done. The employee rated 5 out of 5 on a performance appraisal may be no better than the one rated a 3 who works for a tougher boss. So use the data, but understand its limitations.
"It's very rare that all of the data to give you a complete picture exists, but it's also very rare that there is no data," says Kirk Rogg, senior vice president at Aon Consulting, which specializes in human capital management. "So you have to ask yourself, given the data we have, what do we truly know about this person?"