7 Hidden HR Problems Slowing Down Your Business
Human Resources can be viewed as one of the back office departments that is busily working behind the scenes on paperwork, payroll and people. However, there is one department in any organisation that’s quite complex in terms of its operation and that is the finance department. Each late timesheet, late payslip and missed compliance change has an impact on employee morale, productivity and the bottom line.
Unfortunately, most of the issues that occur in HR don’t make a big announcer. These accrue over time, often in isolated systems, out-of-date workflows and spreadsheets, before finally coming to a head when a payroll error, employee turnover or compliance audit finally draws the attention of the business.
Problem 1: Manual Employee Data Management
There is still a good number of businesses which use spreadsheets, paper documents or disjointed tools to handle their employee records. Personal information, contracts and leave balances are stored in a variety of places, sometimes in more than one place and are seldom current; emergency contacts are not always available.
This type of disjointed record keeping is not only inconvenient but it can cause problems. It can lead to payroll accuracy problems, can be a headache during an audit and can create data privacy problems if sensitive employee information is stored in an insecure manner.
How to fix it: Have a single source of data for all your employees. A single HR database allows for all information on contracts to fair expiry dates to be accurate, accessible and secure. Investing in the system that keeps HR running smoothly is one of the most effective steps a growing company can take to eliminate data silos as well as it helps to protect employee information at the same time.
Problem 2: Inefficient Leave and Attendance Tracking
One of the most basic HR activities should be to know who has been in, who’s out and who’s on leave. However, for a lot of companies, it is an everyday issue. Paper leave is lost and attendance is manually entered at the end of the month, managers approve leave through a myriad of emails and chat messages.
What you end up with are who has left or gone overtime and problems with shifts covered up being a constant source of time-consuming frustration that gradually undermines employee trust in the system.
How to fix it: Shift leave, attendance and shift planning and planning via self-service on a digital platform. Staff should be able to use leave, check his/her balances and clock in/out without having to wait for HR. Having visibility for managers in real time helps to obtain approvals in a timely fashion and identify staffing gaps early in the process.
Problem 3: Payroll Errors and Delays
There’s no single thing that can be more harmful to the employee’s trust than a payroll error. From a deduction mistake to an overtime calculation gone awry, to a late payslip, payroll mistakes are a red flag to staff that the business is disorganised or, in a worst case scenario, rudeness to their pay.
Human errors are prone to occur in manual payroll processing. Tax changes, statutory contributions, allowances, deductions and overtime rates among the other factors are subject to frequent change and one failure to make a change in one case could impact the entire payroll run.
How to fix it: Get the payroll system to do the calculations automatically, making sure it is connected to the attendance, leaves and tax tables. By automating payroll processes, risks of human error are minimised, statutory compliance is kept up to date and finance teams have complete visibility of the payroll costs before the process is completed.
Problem 4: A Poor Onboarding Experience
The first impression is very important and especially so when it comes to onboarding. A bad first impression can be made on new employees who are looking for the IT department to pick up the phone after spending their first week on the job chasing it for an account; filling in the same form three times or sitting around waiting for someone to tell them what to do.
Research after research has been conducted and published showing that structured and well organised onboarding of employees clearly increases the likelihood that they will stay with the company beyond the first year. In contrast, a bad onboarding process is generally attributed as one of the chief causes of employee attrition.
How to fix it: Create a systematic induction process to automatically gather documents, provision system access, assign training and set check-in points. Providing new employees with a set of guidelines of what to expect on day 30, day 60, and day 90 also helps them to settle in quicker and decreases turnover.
Problem 5: Lack of Performance Visibility
Many firms conduct yearly reviews but limited reviews and take a shortcut approach of relying on the manager’s recollection of the last year. Consequently, top performers feel undervalued, under-performers are not dealt with in a timely fashion and promotions and raises are given based on little objective information.
Without constant performance visibility, employees can’t be coached effectively, potential talent cannot be spotted or the individual goals can’t be matched with the company goals.
How to fix it: Implement a performance management process that is ongoing, has regular check-ins, well-defined KPIs, and is open and visible about tracking goals. With modern HR platforms, it’s simple to keep track of feedback all year long, track progress and successes and create a balanced view of performance when it’s review time.
Problem 6: Ignoring Employee Data Security and Compliance
HR is one of the most crucial areas that contains extremely sensitive information like identity records, bank information, salary details, medical records and emergency contacts. However, in many organizations the data is held on shared drives, in email attachments or on local computers, with limited control over access to these data.
In addition to the obvious data privacy concerns, poor HR data management can lead to breach of local labour laws and data protection laws, regulations and policies, each of which can have financial and reputational consequences.
How to fix it: Set up role-based access which means that employee information is available only to those who really need it. Utilize a high quality HR system that is audited, secure and that encrypts sensitive data, and follows local employment and data protection laws and regulations and provides access logs.
Problem 7: Relying on Disconnected HR Tools
The most common issue in every HR-related domain of expanding companies is the disjointedness in the HR tools employed to operate the function. One for payroll, one for attendance, one for leave, one for performance notes (in an email file) and one for recruitment. Data is isolated in each system and HR teams can spend hours each week reconciling data across each of them.
This fragmentation is not only a time waster, but also a problem. It causes information gaps in workforce analytics, delays decision making and prevents having a “true” picture of the workforce in one place at any time.
How to fix it: To follow, a single, consolidated platform to manage HR on a single platform, including employee details, payroll, attendance, performance and recruiting. With the integration, leadership will have the workforce information they need for making a strategic decision; it will also avoid double data entry and minimize errors.
Conclusion
The 7 problems stated above are not independent problems, but are deeply interrelated. Error in payroll due to manual data. Poor onboarding is due to disconnected tools. Invisible means unsighted – performance and compliance risks are invisible. It is these two who slowly convert a strategic function to a reactive and administrative one.
Luckily, all of these issues is reparable. Having the right processes, a culture of accountability and the right technology can mean HR becomes one of the most valuable functions in the business.
First of all, do an audit of the HR processes that you are using now against the seven issues listed above. Find out where there are the biggest gaps and identify the issues that will have the most impact on employees and create a strategy to address these gaps. The capability of your staff and your business’ long-term survival.
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