[FINANCE newspaper] How HRM Digitization Paves the Road to Business Agility?
The path to agile business operations starts with lean operations, and this entails the engagement of employees in HR management.
Photo: Anže Furlan
Nataša Centa, B.Ed., Product Manager (on the right), and Mojca Hafner Jereb, Assistant Product Manager in Četrta pot, presented HRM digitization as the main feature of an efficient organization at the Slovenian HR Congress, 2019.
"The development of web technologies enables even toddlers to order their milk online, as we can see in 2019. Generation Z cannot be imagined without modern electronic devices, while in the meantime, generation X still sticks to manual payroll data preparation," Nataša Centa challenged the audience at the start of her presentation. This is if we define generation X as people aged approximately 40 to 60, and generation Z as 25- to 35-year-olds.
The story of calculation on a single click
"As generation Z is online most of the time, the junior in the family might happen upon an article such as What Can We Expect from HR Management Digitization and forward it with a message 'Hey, read this, they have an application that calculates everything, you just need to click a button!' to their mother," continued Nataša Centa." Naturally, the mother is busy preparing payroll data and has no spare time to read the article. However, the next day, she does read the article which she finds very interesting and continues to search the web page for some more information," concludes Ms. Centa.
Important unimportant things
An explanation as to why a modern IT solution involving HRM digitization facilitates the transformation of a business into an efficient organization, was provided by Mojca Hafner Jereb. She illustrated that a modern IT solution entailing process digitization engages a large number of users in the HRM process lifecycle thus shifting administration activities from supervisors and managers to users or employees.
Moreover, the balance of hours worked and annual leave balance are the most important unimportant things for every employee, she explained. "After having organized training on how to request leaves and review personal data using an HRM application, employees and supervisors/managers will participate in the process," she further explained. "This shift of responsibilities and tasks greatly facilitates the digitization of processes ranging from entering the data in the personnel file to making available corresponding employee payslips on each employee's personal portal."
Competitive advantage through HR data
Nataša Centa, Photo: Anže Furlan
Nataša Centa clarified that the digitization of employee personnel files is the first step in the digitization process, thus enabling the transfer of payroll data to the next processing phase at a click of a button. The data include employee master data, years of service, bank accounts, premiums for special working conditions, job assignment and insurance.
"These data can be used by HRM to run statistics and analysis necessary to manage a complex modern organization," said Nataša Centa. "Valid data that can be viewed at any point along the timeline are a tremendous competitive advantage for organization's strategic planning."
More time left for employee management
Mojca Hafner Jereb, photo: Anže Furlan
According to Mojca Hafner Jereb, physical and time limitations can be overcome by shifting the basic processes to the origin – by engaging employees to make advance notices of their absences, enter travel orders and travel expenses, and request approval via an e-mail sent automatically to the person they respond to. Employees are responsible for the correctness of the data they enter and can also view those data at any time, while at the same time the digitization enables the manager or supervisor to approve requests with a simple click and have an updated overview at all times.
Furthermore, Ms. Hafner Jereb described that travel order approval and corresponding daily allowance and expenses are submitted to HR management by a simple click, and in turn those data are processed in the payroll preparation phase. At the end of the month, the supervisor/manager verifies employee attendance and absence, which will subsequently be reviewed by HR management in the next step.
Just a click away from payroll calculation
As explained by Nataša Centa, HR management uses the received sick leave certificates to double check the data entered into the application, verifies commuting data, and reviews the meals and benefits that employees are eligible to. "All these data are then sent to payroll department where the data are crunched by the application, resulting in the payroll," added Nataša Centa. As pointed out by Mojca Hafner Jereb, HR data, travel order expenses and timesheet data converge in the HR department.
The collected data are the basis from which payslips are generated to be made available on employee's personal portal that a modern IT solution offers. This means that HR administration does not need to put payslips into envelopes any more. "Thank you, you've made my evening as I'm relieved of this tedious task," said a satisfied payroll administrator after having seen the payslips made available to employees on their individual personal portals for the first time – Mojca Hafner Jereb will surely remember these words forever.
HR development competencies
"In the second step of process digitization, administrative procedures will be simplified, as a variety of reports required by the government are available by simply clicking a button," Nataša Centa explained.
We can conclude from the presented information that process digitization shifts the responsibility and roles to the level of employees and supervisors and thus motivates employees to prepare the data on time as they become aware that it is their responsibility to report expenses that need to be refunded to them upon receiving their salary. HR management is thus relieved of some work-intensive activities and can switch their time and attention towards complex roles that can greatly contribute to efficient organization. For instance, they can focus on organizing training courses for the employees to attain new skills and competencies – a prerequisite to HR development.
Through cooperation to agility
At the end of the presentation, Mojca Hafner Jereb pointed out that the digitization of HR management leads the organization towards becoming an agile organization entailing the optimization of work processes and thus finally transforming the organization into a modern and efficient business.
The path to agile business operations starts with lean operations, and this entails the engagement of employees in HR management. "Employees become motivated as they are able to cooperate in organization's processes. Therefore, cooperation is the foundation of an efficient organization that is flexible and quickly adaptable – in other words, that is agile."