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Remove the HR from HRMS

July 6, 2000
Related Topics: Human Resources Management Systems (HRMS/HRIS), Featured Article
We are constantly bombarded today with the concept of employees being the "human capital assets" of the company.

As such, who is really the "owner" of these assets? Who should be providing the requirements for managing these "human capital assets?" HR certainly has some claim for the issues they are responsible for, but there are other non-HR issues and other "users" who have a vested interest in these "human capital assets" as well -- supervisors, managers, executives and so forth.

Although HR believes they may be representing the interests of these other constituents, this can often be debated. Where is this leading? As noted in the above title, there is reasonable cause to remove HR from "HRIS" -- and even take a step further by replacing "HRIS" with "human capital asset management system" (HCAMS). An HCAMS would support not only the HR organization but many other end-users as well.

Now back to a prior question: "Who should 'own' or be responsible for the HCAMS?" It is my belief the HCAMS should, in most companies, be owned by the Chief Operating Officer (COO). HR would most likely be positioned in the COO chain of command as well and be a primary user, but HR should not be the ultimate owner.

I believe it is fair to say that today's HRIS/HRIM professionals are basically frustrated in their work -- my simple survey isn't highly scientific, but it is good enough for my purposes! We have actually been frustrated for several years, so it is not a new phenomenon. We witness and participate in the technology evolution, which is changing and improving even as this is being written.

Yet, we are finding it difficult to use and implement what we know can provide added value to our organizations. Our current primary users and "owners" are unfortunately not changing along with, nor as fast as, the technology. Thus, we are stuck between the proverbial "rock and a hard place" with our work. My premise has always been to work with and help define what it is the "owner" requires and then deliver it (doing such helps the performance reviews and compensation allotments).

User buy-in is obviously essential for the successful implementation of any new HRIS capabilities, functionality and software features. We have continuously heard from our HR user community that they want to be, or even should be, considered more strategic in their participation and positioning within the company. Yet, what have these HR users been requesting over the years from their HRIS teams?

Does anything pertaining to "strategic" come to mind? Nothing much jumps out in my mind that is strategic in nature. Certainly, there are some desires for more employee self-service and other functionality for attempting to escape the day-to-day "administrivia" most HR organizations still embrace, but nothing I would consider that demonstrates real strategic or "out-of-the-box" thinking is being requested.

An example of forward thinking and information analysis is a situation I encountered several years ago working on a project for a fast-food company. All stores were still company-owned at that time. The nature of the business involved high employee turnover, which was certainly common in the industry. HR believed approaches were needed to reduce turnover, as their basic assumption was "turnover is costly and affects profitability negatively."

HR users need to look outside of the "HR box" and better understand what the business is, how it operates, and determine where they can be adding strategic value using the information so readily available to them.

The controller also participated, as she needed to provide some relative data and would need to budget any new programs. Out of curiosity, we took the turnover data by store and compared it to the profitability data by store, and YES, as expected, there was a correlation. Strangely enough though, the higher the turnover, the higher the profitability -- this was actually not a negative situation as initially assumed by HR.

After digging a little deeper it was determined that when the hourly and part-time workers remained employed too long their wages rose as well, thus increasing the store expenses -- revenue however, was not impacted. Training new employees, who were at minimum wage, was not a major issue -- managers were expected to spend a lot of their time managing the workforce anyway, so being in a constant training mode was not seen as a negative condition.

The controller was thinking strategically here and looking at the business issues at hand versus accepting traditional workforce beliefs. HR never would have taken a different spin on this situation.

At least, the project to reduce turnover was quickly abolished. I also believed HR was hoping to reduce their workload by having fewer employees terminate and start on a daily basis, however they never presented any information about administrative cost savings that might be achieved with lower turnover, nor how it would really affect the business!

Unfortunately, I don't recall many similar situations where HRIS data was used in conjunction with financial or other company data in performing a critical analysis. My opinion is the users just aren't aware of what can be done with the data they manage or how to go about it. HR users need to look outside of the "HR box" and better understand what the business is, how it operates, and determine where they can be adding strategic value using the information so readily available to them.

What would this recommended HCAMS transition mean for today's HRIS professional? Once again, in my humble opinion, this would be a major step forward for us. The new HCAMS professional will now be interacting directly on a day-to-day basis with all ultimate systems users and with those responsible for other critical company systems, such as financial, manufacturing and so forth.

Such positioning will still enable us to continue to meet HR's basic needs and we would move up several notches by having human capital information used to support more than HR. HCAMS funding and priorities will be set at a higher level in the company based on returns that can be better measured than when left under HR's influence and total control.

The next few questions might be: "Is this repositioning for real?" or "Will this ever happen?" or "When will this happen?" If I had to bet on it, I wouldn't put much on the "pass line" for anything happening soon -- probably not even in my remaining working life (I have been at this a longer than my youthful appearance suggests)!

There may be instances where management understands the big picture and will make some improvements, but "one-offs" aren't what we are talking about here.

The International Association for Human Resource Information Management (IHRIM) certainly needs to be providing some leadership in promoting such "thinking" and "behavioral" changes and HRIS professionals must also be somewhat political and proactively seek such changes within their organizations, if this is ever to happen. And a final question might be: "Am I really serious about this?" First of all, I certainly cannot make any claims about being a major visionary -- my stock picks will prove otherwise!

What I can say is most people in this industry are frustrated with the business "house" and too many are leaving through the "back door" while fewer are entering the "front door". IHRIM has still not accomplished what were early organization visions (The Association for Human Resource System Professionals (HRSP at that time) to substantially enhance the HRIS profession.

Just look around and see how many HRIS "managers" are equivalent to the Compensation manager, the Benefits manager, the T&D manager, the Employment/Staffing manager, and so forth, in a typical HR organization.

Everyone will not agree with the positioning issue and that is fine, as long as those people are comfortable with where they are and want to remain there. I get frustrated seeing highly competent professionals losing "the faith" and moving forward in different directions to further their careers.

We need to do something about this, so this HCAMS suggestion, as well as others will need to be considered, even though they may appear a little "far out" on the surface -- this is a serious situation and radical actions and approaches are needed.

Published in 21 Tomorrows: HR Systems in the Emerging Workplace of the 21st Century by IHRIM.

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