HRM systems
HRM systems are intended for personnel management, but their functionality is broader, than at automation systems of personnel transactions. Products of this class allow to work not only with quantitative, but also with qualitative indexes of personnel. Their main objective — to attract and hold specialists, valuable to the company.
HRM systems are intended for personnel management, but their functionality is broader, than at automation systems of personnel transactions. Products of this class allow to work not only with quantitative, but also with qualitative indexes of personnel. Their main objective — to attract and hold specialists, valuable to the company.
The English abbreviation of "HRM" designates "Human Resource Management" that is literally translated as "management of a human resource". Synonyms of this term in English-speaking literature are also "HCM" ("Human Capital Management", in transfer — "human capital management") and "WFM" ("Work Force Management", in Russian — "labor control"). In Russian-language texts the term "personnel management" is, as a rule, applied though "human resource management" and "human capital management" also meets.
A HRM system is understood as the automated end-to-end system of personnel management. In comparison with traditional automation systems of personnel records and payroll calculation of a HRM system have advanced functionality. Except accounting (personnel records, the staff list, document flow, a time recording and holidays, pension and military accounting, etc.) and settlement (salary, tax payments, allowances and deductions , etc.) the circuits processing quantitative data, the similar systems also include the HR circuit as such intended for work with qualitative indexes of personnel.
Main determinations
HRM systems are intended for personnel management, but their functionality is broader, than at automation systems of personnel transactions. Products of this class allow to work not only with quantitative, but also with qualitative indexes of personnel. Their main objective — to attract and hold specialists, valuable to the company.
When HRM systems are necessary
HRM systems are one of the major corporate applications used in the companies of all sizes and in all industries. Need for implementation of HRM systems is defined by such requirements, critical for successful business development, as:
- Expenditure management: Expenses on compensation are one of the largest expensive articles. According to Forrester Research (HRMS Q4 2008) 36.4% of the total amount of expenses are the share of their share in the USA on average. HRM systems are used for planning and expense optimization.
- Effective management of business processes. HRM systems are supported by a set business of HR of processes: adoption of personnel solutions, maintenance of records about employees in current status, payroll, development of schemes of motivation and so forth. Increase in efficiency at accomplishment of these tasks happens due to providing direct access to employees (Employee self-service) and managers (Manager self-service) to information necessary to them.
- Respect for all precepts of law regulating relationship of the worker and the employer. Use of HRM systems allows to resolve competently difficult questions, to implement flexible settlement schemes of the salary and personnel document flow.
- Increase in value of a human capital. Despite an economic crisis very few people will argue on the value of a human capital as a corporate asset. The companies with strong control function by personnel will focus attention on "high-quality" growth of employees, developing incentive programs and schemes of motivation.
"Qualitative" functionality
The HR circuit provides automation of such functions as motivation of personnel, maintaining "profiles of employee competences", "management of career", performance appraisal, training management (advanced training), distance learning, efficiency analysis of personnel, the analysis of compliance of the employee of a post, requirements planning in personnel and movements of personnel, formation of a talent pool. Also, it provides "self-service of personnel" (remote access of employees, including via the Internet, to credentials about them with a possibility of correction of a part of them) and also support of the HR portal in the Internet, with the publication and operational data-refresh on vacancies, news of the company, registration of the summary completed in the on-line mode, the automated analysis of these summaries and selection of potential candidates to a position , etc.
The lion share of control functions by labor resources came from the western practice, but, for example, advanced training is not exotic for domestic management tradition personnel, and formation of a talent pool in general is borrowed from the Soviet methodology. Nevertheless, still on most domestic enterprises these functions are used not completely or are not demanded at all though interest in them constantly grows.
Distribution of HRM in Russia
First of all, specialists in HR and the full-fledged HRM systems appear in the Russian representative offices of the foreign companies, after them there are large domestic companies using the western control techniques and also the companies with a big staff turnover, the companies which are controlled "in the old manner" resort to control techniques labor resources less often.
Besides, there is a gradation of extent of use of HR functions and depending on industry specialization of the enterprises. According to us, human resource management in a manufacturing sector of economy, and most of all — in the field of service is least of all popular. Respectively, than a core activity of the organization is closer to services industry, especially expanded personnel management is demanded.
As note in CNews Analytics of a trend of development of the Russian IT market are similar to western, therefore perspectives of development of a domestic segment of HRM solutions can be foreseen already today, having looked at universal trends. According to the western analysts in development of a segment of HRM systems it is possible to carry to the key directions:
- promoting of the solutions provided according to the SaaS model
- increase in demand for simpler and available solutions with an optimal ratio "price/quality"
- replacement from the market of "weak" HRM solutions.
Main objectives of HRM systems
HRM systems allow to solve two main objectives:
- arrange all accounting and settlement processes connected with personnel;
- reduce the losses connected with departure of employees.
The effect of the solution of the first task is rather obvious and consists in elimination of double entry of data, their data in uniform base with a possibility of the complete analysis and generation of the reporting, an emergence exception of "dead souls", timeliness and correctness of calculation and salary accrual, tax deductions , etc. But it can achieve also by means of normal automation systems of personnel records and payroll calculation. Importance of the solution of the second task is not always adequately estimated by domestic top managers.
Analysts of Molga company select the following problems of a HRM system:
- attract, hold and motivate the best personnel;
- reach implementation of strategic objectives of the company, breaking into them to the level of each employee;
- implement development and training of personnel potential according to the purposes of the company and its divisions;
- perform strategic planning of organizational changes and create budgets;
- to timely make effective decisions, based on the exact and comprehensive information analysis;
- with low costs and optimum to perform accounting functions in the field of personnel management.
Considering that according to American Management Association, the losses connected with replacement of the employee lost by the company can be from 30% to 150% of his annual salary, depending on the level of his knowledge and skills, the staff turnover appears a serious problem which can significantly worsen indicators of overall effectiveness of the organization.
Thus, it is possible to call HRM systems, in a sense, "CRM systems on the contrary", attracting and holding not buyers, but own staff of the companies. Certainly, methods are applied absolutely others here, but the general approaches are similar.
Classification of HRM systems and description of their fixed functions
HRM systems divide into "settlement", "accounting" and management systems for labor resources on levels of control automation by personnel which correspond to stages of development of application software solutions for HR departments. The full-function HRM systems, respectively, include "an accounting circuit", "a settlement circuit", "HR circuit" and also functions of generation of the reporting.
Functions of a HRM system
Functional filling of the modern HRM systems in Russia as a rule, includes:
- Accounting circuit
- Settlement circuit
- HR circuit
- The reporting functions (distributed on a system)
To whom and when it is necessary to implement a HRM system? "User's portrait"
The working HRM system allows to reduce seriously number of manual operations on work with documents, to lower number and to increase accuracy at payroll, taxes and other assignments, to implement full human resource management and not to allow to lose them. The enterprises for which it is important should implement the relevant software solutions.
Volume, dynamics, structure of the market and the largest HRM players
The world market of automation systems of human resource management continues grow rather actively, despite the continuing consolidation. Strong players of the market hold the leading positions, competing with each other and increasing the customer base. The second factor of growth is arrival of new players and expansion of the range of the best-of-breed systems. In particular, one of catalysts of growth of the market is development of the solutions Performance and Talent Management.
Ranking of vendors of HRM systems on number of clients in the world in 2009 Workforce Management 2009
| 1 | Workforce Now, HR/Benefits solution, HR eXpert, Enterprise eTIME, ezLabor Manager, TimeSaver
|bgcolor=#f1eeee|32.345 |
| 2 | Ceridian Talent Acquisition & Management Solutions, Ceridian Health & Productivity Solutions, Ceridian Benefits Services, Ceridian HR Management/HR/Payroll
|bgcolor=#d5d2d2|25.000 |
| 3 | Workforce Central, Kronos iSeries Central, Timekeeper Central, Workforce HR, Workforce Payroll, Workforce Acquisition
|bgcolor=#f1eeee|25.000 |
| 4 | Sage Abra HRMS, Sage Accupac HRMS
|bgcolor=#d5d2d2|21.000 |
| 5 | Workforce Empowerment
|bgcolor=#f1eeee|4.000 |
/В a ranking the SAP Oracle I companies entering 5 leaders in 2006 refused to participate. /
Key technologies in the world market of HRM systems
As experts note, in all modern world-class HRM/HCM systems are implemented functionality of the "user" and "operational" level (including "information self-service", support of the staff list, personnel, time keeping, payroll, surcharges and assignments). The key directions of technology development of HRM systems is automation of hiring, management of "talents" and efficiency of personnel and also training management of employees now. Besides, for HRM solutions the SaaS model based on Web services is very perspective.
Trends and forecasts of development of the world market of HRM
Despite a relative maturity of the world market of HRM systems, many western companies still remain adherents of "scrappy" automation, and the complete solutions proposed by vendors often contain spaces in functionality. Transition of the foreign companies to strategic management by labor resources stimulated development of cooperation of vendors of the integrated HRM systems and developers of solutions best-of-breed and also absorption of the second the first. Actively application of the Software as Service model develops and the sector role of SMB grows.
"Road map" on HRM systems in Russia
The analysis of the functionality implemented in HRM systems allowed to break them into the classes corresponding to the level of technology development of a product and its developer. In total four classes were selected: A, B, C and D. Suppliers of the foreign solutions, best in the classes, are SAP, Oracle and UCMS. The first in functionality Russian HRM systems are developed by BOSS. Personnel systems, Galaktika Corporation and INEC
Ranking of HRM software suppliers to number of the implemented projects in Russia
On number of the implemented HRM systems (on which information is disclosed) for 2009 top three includes the companies "Compass", "AiT Soft" and "Diasoft".
Ranking of HRM software suppliers to number of the processed accounts
On number of the processed accounts in HRM systems implemented at the Russian enterprises first place is won by SAP company, in the second place AiT Soft, in the third place — Oracle, in the fourth place - BOSS. Personnel systems, Compass closes top five.
Industry structure of the Russian market of HRM systems
Demand for HRM systems differs from the industry to the industry. Influences its volume and structure both specifics of the enterprises, and indicators of their economic development. On number of projects the mechanical engineering and a food industry, and on the volume of the data processed by systems — transport and a telecom are in the lead. Available data about implementations are estimated, but can quite be used to understand the current situation.
Industry HRM leading
According to data on number of open implementation projects of HRM systems on the separate industries specialists of TAdviser revealed the companies leading in this or that market segment. The most demonstrative are four industries: mechanical engineering and instrument making, food industry, transport, oil and gas industry. In the first two industries the maximum number of projects, secondly two — the maximum number of the accounts processed by HRM systems is observed.
Key technologies in the Russian market of HRM systems
At the Russian market there are both foreign and domestic developers. Technology level of solutions of the first is defined by requirements of the world market while the second are guided by requirements of domestic market. The domestic HRM systems are not focused on the "strategic" personnel management demanded abroad as the Russian enterprises solve problems of basic automation of work of HR departments today yet, and for use on them the specified techniques necessary conditions are not created yet. At the same time, vendors of the leading Russian products needed "be tightened" only in the field of e-learning, portal expansions and "information self-service" and on the stated functionality they will be equal to the western solutions.
Trends of development and forecasts of the Russian market of HRM systems
Automation of work of HR department becomes one of the most popular tasks solved by the Russian enterprises in recent years. It is performed as within the general automation of the companies (implementation of ERP systems), and during the isolated implementation projects of functionality of HRM. Priorities at the same time are the organization of personnel records and settlement procedures within the unified information system with the centralized data storage. After their solution the enterprises often pass to implementation of information support of human resource management (to function on management of competences, motivation, compensations, hiring, career , etc.).
As it is correct to select a HRM system: methodical recommendations
The procedure of the choice of the software solution for automation of these or those business processes was always rather difficult case. She assumes conducting case study of the offer in the market, the analysis of functionality of available products, comparison of set of the tasks automated with their help to requirements of the enterprise, and quality of implementation of functions — with price product characteristics. And, actually, such researches should be, at least, two. And the research of business processes of the enterprise and the needs for their automation should be the first of them.
Methods, approaches and problems of implementation of HRM systems
At implementation of HRM systems the enterprise needs to solve a number of key problems that in many respects can define a final outcome of the project. In particular, before transition to the project as such it is required to describe business processes which will be affected by automation (or will appear in its result). Is also required to solve who will be engaged in formalization and business process reengineering and also actually implementation. Also the choice of the mode of transition to use of a new system is important.
How much is HRM: how to calculate the total cost of ownership (TCO)?
Calculation of total cost of ownership a system is complicated by its uniqueness for each enterprise and also closeness of information on schemes of licensing and price policy of many vendors. For calculation of TCO it is necessary to select key factors of costs and to calculate their value on required term (normally from 3 to 10 years). Carry initial costs on system deployment to such factors, costs for upgrade, costs for technical support of a system, labor costs of users of a system and also all fixed costs connected with functioning of a HRM system.
Links
- State-of-the-art review: HRM 2009 systems
- What is and why HRM systems are necessary?
- State-of-the-art review: HRM 2007 systems
- To whom and when it is necessary to implement a HRM system? "User's portrait"
- Ranking of HRM software suppliers to number of the implemented projects in Russia
- Personnel management - All about HR, HR systems, the HR directory of developers and HR systems
- Distinctive features of human resources management
- IT director's arsenal. Automation – a practical advice.
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