What is a people management system?
A people management system is a cloud-based software application that HR professionals and leaders use to automate, manage and analyze HR functions and people-related processes. Although the functionality and scope of the various people management systems out there vary, the software might include any combination of the following: recruitment, onboarding, talent management, employee development, training, performance management, employee engagement, wellbeing, time and attendance, payroll/benefits administration, reporting and analytics.
Yep, there can be a lot to it, and researching, comparing and selecting a system that meets your needs is a major undertaking. In this article, we’ll take you through the key stages of the buying process, and everything you need to think about to choose the right one for your organization.
Why do you need a people management system?
Without people, business doesn’t exist, and most organizations now realize that people are their most important asset. A people management system provides a way to not only manage people data and administrative tasks like obtaining proof of vaccinations, but it also enables organizations to better understand and leverage the knowledge, skills, needs, wants and opinions of their employees.
Many HR teams also face the issue of distributed people data. Often, there will be bits of employee information living on paper or in Word documents, org charts created manually in Powerpoint or InDesign, headcount, diversity and compliance tracked in spreadsheets, and payroll in its own system. When you add survey and engagement tools into the mix, things start to get pretty complex!
A people management system provides a way of digitizing and unifying all of that information in one central, online place. This removes much of the manual work for HR, and the risk of errors that comes from flicking and copying info between multiple systems.
We’ve summarized some of the other key reasons why a people management system is beneficial below.
Benefits of a people management system:
- Automates manual people management processes, freeing up HR team members to spend time on strategic or profit generating activities.
- Reduces physical paperwork as everything is stored online in the cloud.
- One central place to manage employee information, data and processes.
- Secure and safe storage of employee data.
- Increases visibility over your people – headcount, diversity, location, distribution, seniority, etc.
- Engages employees through feedback.
- Helps manage performance and employee development, maximizing the chances that top talent will stay.
- Helps to understand and optimize the employee experience.
- Creates efficiencies and consistency across onboarding for different teams, while personalizing the onboarding experience for different roles and your company culture.
- Empowers employees to view, manage and update their personal information, licences, certificates, policies, leave balances, etc (taking the burden off HR).
- Facilitates compliance and record keeping, helping to audit-proof your organization.
- Facilitates and promotes diversity and inclusion by minimizing unconscious bias in management decisions.
- Gain insight into and analyze performance, culture, financials and more in real time with reporting/analytics (that don’t require spreadsheets).
Choosing a people management system
1. Be clear on your strategy
Implementing a new platform is no small feat – it takes time, money and resources and you want to make sure it’s the right fit for your organization right now and in the future.
As you would with any other project, it’s vital to define the strategy and purpose of your people management system and align it with the overall organizational strategy. Consider what’s important to your organization in terms of strategic direction, goals, company culture and future growth and how that maps on your HR strategy.
On top of looking at strategic goals for your organization as a whole, and how a new people management platform might fulfill these, you’ll also need to define specific goals for what you want the software itself to help achieve. Do you need a clear way to track performance so you can better identify, promote and retain top performers? Do you want to empower managers with a tool that they can use to oversee and empower their teams? Are you looking for HR reporting and analytics to help you make informed, data-driven decisions?
Looking at both high-level strategy and more specific goals is a key first step to choosing a HR platform.
2. Audit your current processes and technology
Take stock of your current HR processes and related technology – get feedback from the HR team, system users and key stakeholders about things that are working really well, what’s not working so well and any pain points and/or kinks that may need ironing out. This step is a broad information gathering process where it’s important to identify all of the challenges you’re facing with respect to managing people, data and compliance.
3. Set a budget
Your budget, of course, will depend on the size of your organization and its needs, but you can start by doing some preliminary research to understand the range of how much a people management system might cost. You might also like to think about how you will quantify and measure the ROI on your spend, and ensure you have baseline figures to compare back to after implementation i.e., hours saved by your HR team, enhanced employee productivity, or increased retention.
In addition to the cost of the system itself, which might be a one-off or ongoing payment (e.g. for a license or Software as a Service (SaaS), there will often be other costs to look out for:
- Data migration
- Customer support
- Ongoing storage/data costs
- Additional features or upgrades outside of the base package
4. Consider who’s using it?
Is your people management system only for HR, or is it something you’d like your people managers to be able to access and leverage to improve their team management capabilities, too?
Traditionally, a people management or HR system was viewed as solely for HR, but now it can also be a self-service function for employees, a tool for supervisors and managers to manage and nurture their teams, and a powerful reporting and analytics tool for C-suite to make decisions.
5. Distil down your requirements
After your initial audit and working through the other steps, you’ll probably have identified a fair few needs, wants and expectations for your people management system.
To separate the non-negotiables from the nice-to-haves, revisit each proposed requirement and ask the questions, does this help achieve a goal?, and is this aligned to our strategic direction? e.g.
- If international expansion is on the cards, then you’ll likely want continuous feedback and employee listening tools for gaining feedback from staff throughout the process.
- If you want to achieve better alignment between teams, then cascadable goals are a must.
- If you want to shift work culture away from an hours-worked focus to quality of work and performance, then maybe time and attendance features aren’t actually necessary.
6. Best of breed vs all-in-one?
When you’re researching people management systems, you might notice there are lots of “all-in-one” “does everything” systems that offer everything from ATS to payroll in one platform. Then there are specialized vendors whose products focus on a smaller number of specialized components or areas (e.g. performance and engagement). These are your best-of-breed tools.
Below we outline the benefits of both of the options, but before we do, here are some things to think about.
On the surface, a single system to do it all is attractive and can offer a simpler solution to your HR needs in a single implementation. But all too often, despite oodles of features, they don’t truly solve the problems you set out to (think quantity, not quality) or work that well together (this can happen when vendors acquire disparate software products and cobble them together under one label). And, as Josh Bersin writes in his article on the topic, you rarely use all the features anyway. Best-of-breed tools, on the other hand, are laser-focused on providing the best technology across a smaller number of specialty areas. They build each component from scratch specifically to work well with the other components – to “talk” to one another.
Benefits of best-of-breed HR software:
- Less breadth, but more depth and advanced functionality in features.
- Fulfills your unique requirements.
- Support – specialized support/subject matter experts in each domain and faster implementation.
- Better and more frequent software upgrades.
- Integration – build a best-of-breed ecosystem that integrates all of your tools via API.
- Flexibility – best-of-breed solutions are much easier to swap out if they’re not working.
Benefits of all-in-one HR software:
- One unified system.
- Single point of access.
- More breadth of features.
- Simpler for staff to learn to use one product.
- Potential cost savings due to the product covering multiple aspects.
Okay, so now let’s talk features. There are lots of different ways to group, classify and name features, which can make it hard to compare apples with apples when you’re reviewing multiple systems. But here are a few things to look out for:
- Core HR – e.g. record keeping, employee self-service, organizational charting
- Onboarding / offboarding – e.g. automated workflows, welcome emails, exit interviews
- Compliance – e.g. mandatory qualifications, licences, certifications, vaccinations
- Performance – e.g. performance reviews, performance improvement, goals, training and development
- Engagement and feedback – e.g. continuous feedback, eNPS, wellbeing
- Learning and development – e.g. training investment reporting, skills gap analyses, compliance
- Time and attendance – e.g. timesheets, leave requests
- Payroll/benefits administration
- Reporting and analytics
8. Look at multiple systems
Now, it’s time to consider multiple systems and compare and contrast them before coming to a decision.
Keeping in mind the priority features you have decided on, list these out and then compare at least three vendors to see which has the majority of what you require. If any or all systems do not fulfill all of your non-negotiable features, replace these with other options and repeat the process until you have found at least one system that meets all your essential criteria.
Here’s an example comparison to get you started:
9: Building a business case
Once you’ve gone through each of the steps above and have chosen your people management system (or top 2-3), you might need to build a business case to help justify the need and outcomes for HR budgetary spend. If you’re building a business case for intelliHR, we have a comprehensive template you can use that you can plug in your specific objectives and figures (just ask us). Otherwise, see the list below for things to include.
Things to include in a business case for HR tech:
- Current state of operations and business requirements (include cost of processes like onboarding, performance and attrition)
- Reason change is required
- Project objectives and projected benefits
- What success will look like
- Financial, strategic and business drivers
- Project risk
- Recommended solution
- Project implementation phases and milestones
10. Implementation and beyond
Congratulations! If you’ve made it to this step then you’ve found the best people management system for your organization. Next stop – implementation, which can be a minefield of its own. Here are some questions to ask to ensure your implementation goes as smoothly as possible.
- What’s the implementation process?
- How much work will this be to implement?
- How do I get data into the system?
- What happens if I need help with the system?
- How do I achieve high adoption?
For ideas on what more you can do with a people management system, subscribe to our blog.