The crucial role of HR and the challenges it faces. rucial

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1 The crucial role of HR and the challenges it faces rucial

2 The crucial role of HR and the challenges it faces HR and payroll systems are one aspect of business management that is ubiquitous. No matter what sector a firm works in or how much revenue it makes, it will still need to ensure employees are paid and engaged. These fundamental processes are not formalities. The efficiency of HR and payroll departments and the systems they use can have a direct bearing on the overall financial record of a business, as all organisations are only able to achieve success through their people and the hard work they perform. Research has shown that last year, both the UK s output per hour and per employee were below the average of the rest of the major industrialised economies, including the US, Germany and France 1. Many people have the misguided belief that employees are motivated to perform via cash incentives. Short-term incentives or cash bonuses have become the norm in the UK with 94 per cent of British companies offering an annual financial incentive to their employees in However, recent research conducted on 1,000 British employers, found that in fact finding enjoyment in their job was the most important motivational factor for 59 per cent 3 of employees - the most common single response. Importance of motivating factors Good access to training and development, gain qualifications, etc 7% Good career prospects - good chance of promotion 9% Whether or not I get a bonus for performing well 13% Being able to work flexibly (work at home, vary start and finish times, reduce hours if needed, etc) 16% Not having to work long or irregular hours (shifts, weekends, etc) 16% How much control I have over my own work and how I do it 22% How well my manager treats and shows interest in my ideas and welfare, etc 22% How well I get on with the people I work with 42% How much money I am paid, having a good pension and other benefits 49% How much I enjoy doing the job I do 59% Institute of Leadership & Management - Beyond the bonus: Driving employee performance 2013 This shows that in order for UK businesses to improve their productivity, they need to work more closely alongside their employees rather than offering higher bonuses and effective HR and payroll systems are integral to achieving this.

3 HR and payroll challenges Like every other area of business, HR and payroll also face their own challenges: Huge nationwide reforms - Almost 40 per cent of UK small to medium-sized businesses believe their payroll departments are not adequately prepared for their autoenrolment staging date 4, while many are still trying to get to grips with HMRC s real-time information (RTI) method of reporting PAYE changes. Cost-cutting - Budgets will always come under close scrutiny and despite its crucial role, HR have to justify its spend. Efficiency improvements will be demanded. Staffing and growth - The UK economy is at a critical juncture. Many firms expect to increase their headcount this year. HR will be key to this process, not only during the recruitment phase, but also in the creation of a motivational working environment to retain the most talented staff. Using the web to research and select a HR or payroll solution The modern HR and payroll system needs to be comprehensive and adaptive, able to guide staff through previously time-consuming processes with the maximum efficiency so that HR professionals can get on with other more productive tasks, such as tending to the needs of other employers and working to secure strategic business objectives. Furthermore, the payroll platform also needs to ensure the whole organisation remains compliant with complex payroll reforms, including RTI and auto-enrolment. To ensure that a company gets such a crucial decision right, extensive research is needed. The vast resources available on the Internet make it a great place to start. The web is now the number one way for consumers to ascertain information about companies and purchasing choices 5, with 89 per cent of consumers using Internet search engines to inform purchasing decisions. The collective resources online are eclipsing the persuasive power of traditional influencers such as family, friends, peers or colleagues. When it comes to researching HR and payroll systems multimedia presents ideas and concepts in a number of appealing and engaging ways. Easily-accessible whitepapers may be the starting point for researching purchasing decisions, but other formats of information such as video and interactive guides are not possible via any other information conduit. Of course, when making a business decision as fundamental to a company as the purchasing of a new HR and payroll solution, web-based research must be shared and communicated with colleagues to ensure it is appropriate for everyone, but prior use of online tools can make the transitional period much less of an uncertainty. The Internet represents a simple, inexpensive and thorough way of testing and examining what specifics each individual company needs from their HR and payroll system. If future issues and complications can be identified and rectified even before any investment has been made, then a business stands to save both time and money.

4 How to use an online HR toolkit to maximise immediate and long-term success Researching purchasing decisions is a vital task, especially when budgets are tight and the first choice needs to be a successful choice. However, in relation to HR and payroll, there is a multitude of things that need to be considered. Web-based platforms can be structured in such a way that a business decision-maker is guided step-by-step through the entire process. This meticulous methodology helps ensure that a company ends up with the system that is most suitable to its needs. Step 1 Is a new HR and payroll system needed? Step 4 Speak to HR and payroll software providers An HR toolkit can provide the questions that are needed to ascertain whether or not an existing payroll or HR system can cope with the challenges the future represents. All stakeholders should be involved in answering the questions posed by this step, as HR and payroll not only affects the people working in the department on a day-to-basis, but everyone in the whole company, from the executives to the IT staff. Step 5 At this advanced stage, businesses will benefit from hands-on demonstrations directly from the HR or payroll suppliers. However, this is not the end of the HR toolkit s usefulness. It can explain how to shortlist suppliers and organise appropriate presentations, so that businesses can extract the most benefit from these scenarios. Implementation Step 2 Step 3 How to build a business case to help drive improvement and limit weakness At this stage creating a business case is essential as purchasing a new HR or payroll solution is an expensive investment normally requiring the buy-in of the senior management. It is important to get an understanding of the business, the key areas that you want to address and how the system can help your business achieve and support its long term aims and objectives. This enables HR and payroll departments to build a solid business case that will demonstrate to senior decision-makers and management how beneficial a more efficient solution can be to the organisation. Sourcing the available HR systems Having produced the business case for a new solution the next step is to determine your business requirements. Here, the toolkit will explain the processes involved with the compilation of prequalified questionnaires (PQQs) and invitations to tender (ITTs). Some companies may not need as formal a sourcing strategy as these, but it is best practice to be informed of the sourcing methods behind these processes. Step 6 Any change which is as comprehensive as a new HR or payroll system has the potential to be disruptive, even if all the previous steps in the toolkit have been adhered to. Advice in this section shows how pre-implementation planning can be the final way to minimise upheaval. Continual progress and improvement Upgrading an HR or payroll system has the objective of improving a business, making it more efficient. This does not end at implementation, so neither does a HR toolkit. Here, advice on establishing long-term relationships with a systems provider can be found. This ensures HR and payroll systems can continually drive efficiency and any updates are communicated effectively. Where can I go to get the process underway? Sage has used all of its HR and payroll software expertise to produce a HR toolkit ( that is ideal for medium-sized businesses looking to maximise the potential of their HR and payroll departments. 1 ONS, International Comparisons of Productivity, First Estimates for Towers Watson, Auto-bonus culture, ILM, Beyond the bonus: Driving employee performance, Irwin Mitchell, SME Auto-enrolment survey, Fleishman Hillard, 2012 Digital Influence Index

5 If you d like this information in an alternative format, call Customer Care on or access@sage.com so we can consider your request. Sage (UK) Limited, 4 Witan Way, Witney, Oxon OX28 6FF Telephone: snowdropkcs@sage.com Web: Sage (UK) Limited JJ 11/13 Paper from well managed forests