HR’s work is more complex today than ever before. A vital aspect of this is the management of employee information, which is used across the employee lifecycle, from recruiting and hiring to training, evaluations, promotions, compensation and so much more. Given the scale and complexity, HR teams must rely on automation and software for more efficient management of information, which is why organizations of all shapes and sizes tend to invest in HRMS (Human Resource Management Systems). Softwarepath found that in a company of only 1000 employees, the organization would spend $8,333 on each HRMS user over 5 years and this will increase as company size and users increase. Unfortunately, despite heavy investments into HRMS applications, HR teams still find themselves spending large amounts of time using spreadsheets, PowerPoints, and 3rd-party data software to manage critical processes.
One such critical process that HR is unable to run effectively on an HRMS is Succession Planning, because of critical shortcomings in HRMS applications. Here are 5 shortcomings in HRMS systems that leave gaps in Succession Planning processes:
1. Lack of Assessment Data
An HRMS primarily functions as a Systems of Record (SOR) and therefore contains data related to an employee’s information and performance. Whilst this data is needed, it is not adequate to determine an employee’s fit for a current or future role.
Objective data refers to data on a person’s potential, which can be gathered via tools such as psychometrics, simulations, game-based assessments, etc. These tools provide insights into a person’s leadership potential, cultural alignment, cognitive ability, and much more which when combined with the data available in the HRMS, are key decision criteria to determine true readiness. Understand more on how to select the right talent assessment tools
2. No Valid Benchmarks for Success Profiles
One of the key gaps in an HRMS when executing succession planning is the lack of benchmarks available to match a person to a role and to determine how they might perform against the expected competencies. This is because a system of record like an HRMS is meant to capture internal information and not serve as a benchmarking system.
A talent intelligence platform to supplement your HRMS becomes important. Platforms like these come with 2 key features that help you benchmark your people, therefore, being able to know if they can perform in a new role.
- Tools that are globally normed – Measuring a person via tools that are globally normed allows organizations to understand if or not they have talent that is performing at a globally competitive level. This ensures that in the long run, you maintain a competitive talent advantage.
- Validated success profiles – Success profiles provide an organization with a full view of what good looks like for a role. This helps HR understand the leadership competencies, technical skills, interview questions, development tips, and much more or a role and therefore they now know what to look for.
To understand more on why benchmarking is critical in today’s business environment, read our blog on Succession Planning in the Age of Digital Transformation
3. Lack of Analysis Capabilities
An HRMS doesn’t turn data into useable insights needed for running a succession planning exercise. This creates difficulties for HR teams, because they now have to first manually extract relevant data from various sources, and then rely on spreadsheets and sometimes BI applications to meaningfully organize and analyze the data. This is also a key reason HR teams are unable to fulfill requests from businesses on time, creating a false perception about HR responsiveness or the lack of it. An HRMS also makes analysis difficult due to the lack of dashboards and reporting that can be tailored to an organization’s unique needs. This means HR spends more time gathering, analyzing, and visualizing talent data instead of taking on more strategic succession planning tasks.
4. Cost of Setup, Installation, and Training
With 28% of companies looking to take a ‘start over’ approach to designing their HR processes and systems (Sierra-Cedar, HR Systems Survey), one of the biggest challenges these companies will face with their HRMS is the purchase and implementation cycles. When considering a new or replacing an old HRMS, the buying decision usually takes months and involves multiple stakeholders. This means that while the evaluation process is on, critical processes like succession planning either need to be done manually or are put on hold, which can have a serious impact on business continuity.
Post-purchase, there is a heavy time investment required for installation, setup, training, and customization before your HRMS is running. This is why organizations also need to consider having a solution in addition to the HRMS that can be used concurrently or independently from the HRMS to ensure no disruption in your succession planning process. This system should have a pricing structure flexible to your organization’s needs, be quick to implement through easy deployment, and should not require copious amounts of data before it can start creating value for your organization.
5. User Experience Takes a Back Seat
Oftentimes, one of the biggest reasons HR teams don’t fully engage with their HRMS is because the user experience isn’t engaging. As the main users and admins of the HRMS, HR teams expect an easy-to-use system that they enjoy utilizing and in turn, can help run effective succession planning.
This also impacts employee’s engagement with the system because HRMS often does not create an immersive experience for them. When these systems without great UI/UX are used to run succession planning, HR will often find that completion rates are low and communication needs to be repetitive, prolonging the entire process. Therefore, if your current HRMS doesn’t provide a great user experience, it is important to consider a platform for succession planning that can help you boost completion and increase engagement as part of your processes.
While HRMS is a necessity for organizations to run their HR operations, complementary systems like talent intelligence platforms can help run succession planning processes effectively and accurately, while also removing heavy time and effort requirements by HR. They also help HR play a more strategic role in the organization to improve agility and build resilience.
Josh Bersin has summed up it well, “I’ve talked with multiple CHROs who have spent many millions of dollars on replacement core HCM systems, only to find out that the employee experience fell short and required a new layer of software on top. These new employee experience platforms are not only good HR self-service systems, they also include chatbots and deep integrations to HCM, ERP, learning, and recruitment systems. They have development tools, monitoring, and transaction management features as well. In a sense, they are a new kind of middleware, designed to make it easy for the HR department to design moments that matter and then implement them for employees.”
To ensure you have all you need for an effective succession planning process download our free Succession Planning Checklist