HRIS and a Key to More Success

Most small to medium-sized companies in the U.S. appear to be underutilizing resources they already have to advance their competitive advantage and boost profits. This is one of the conclusions of a recently published survey and report on the Human Capital Management Practices of America's Small and Medium Sized Companies.

Sponsored by Merit Resource Group and The Management Institute at Utah State University, the research focuses on how widely spread the usage of electronic human resource information systems (HRIS) is among small and medium sized companies today, and to what extent they are leveraging this technology for their strategic advantage.

Established businesses across the country, averaging 250 employees and from $50 to $100 million in revenues participated in the survey from the high-tech manufacturing, professional services, biotechnology, insurance and financial services sectors. Respondents were nearly evenly divided between HR director, VP, senior VP, HR manager and generalist - specialist HR positions.

Here are just a few of the findings:

• Although nearly four out of five firms are using some form of HRIS, their use centers on payroll processing and administration. The study reveals these firms are missing opportunities for broader strategic business decision-making utilizing current HR data, even though their systems typically provide the capability.
• Respondents indicated the primary benefit of their HRIS is automation of routine tasks. Additionally, their HRIS serves as a decision aid for the HR department, improving both speed and quality, and resulting in enhanced satisfaction with HR in their companies. Interestingly, the reduction of HR staff was not considered to be a primary benefit.
• More frequently however, skills inventories, selection, performance and recruitment data are not maintained in the HRIS, making it extremely difficult to determine if recruitment sources are providing the best candidates, how effective hiring and promotion processes are, and the true impact of turnover and absenteeism costs on the business. This represents a significant opportunity for companies to better utilize their HRIS in support of better strategic decision-making.
• Participating companies appear to have both the staff and technology resources available to exploit these areas, however experience in the techniques of establishing strategic objectives and managing the information necessary to meet those objectives is preventing HR from most effectively leveraging these resources to full advantage.

With the continuing push for HR to be more strategic, the results of this report point to a number of opportunities for companies to advance their competitiveness through better utilization of their HR data - a critical strategy for more success.

Merit Resource Group helps businesses in all stages of development manage their critical human resource issues to increase business success. Merit's HR Assessment helps its clients align policies, procedures, compensation plans, training, employee survey and staffing needs for greater business results and Return On Investment in their people.