Big data has the power to transform the world of work. Data-driven organisations are 23 times more likely to acquire customers, nine times more likely to retain clients, and 19 times more likely to achieve above-average profitability, according to research by the McKinsey Global Institute.
Yet managing and effectively analysing this data is a huge challenge for businesses, especially when an estimated 463 exabytes (463 billion gigabytes) of data is projected to be created daily by 2025. So how can they better make use of organisational data?
Part of the challenge lies in the disparate systems and functions that organisations use to store and manage their information. Payroll data may sit with the finance team. The HR function may store its data on a different system. Strategic data on talent management or skills gaps might be created by leadership teams, but not correlate with existing data on in-post employees. The first step to effectively use data for strategic advantage is to consolidate accurate, clean information into one streamlined platform.
Understand your data
Carlos Pardo is managing director at integrated HR and Payroll solutions provider SD Worx Spain. He agrees that many businesses are missing out on vital strategic information by using antiquated data systems.
“There are a lot of businesses with outdated systems who are sitting on a treasure trove of data – but they don’t know how to use it or even access it,” he says.
“Typically, HR and payroll hold a lot of information about people, costs, legal data and business position, but the data isn’t consolidated. That can make it difficult to answer even simple questions, such as how many full-time employees are in the business, or if and where there are skills gaps,” adds Pardo.
Integrated solutions providers, such as SD Worx, can extract data from different systems and consolidate it. With clean data, they can define key performance indicators around people, strategic goals and gaps in talent.
A further benefit of collating data and moving it out of internal systems to a cloud-based solution is increased security. A recent survey by McKinsey & Company found that 57% of executives said their organisation suffered at least one material data breach in the previous three years. With this in mind, data security and compliance are increasingly top of mind in the C-suite.
“HR systems hold sensitive data about payroll, bank accounts and personal information. Every day, there are more attempts to penetrate these systems. Most companies – even mature ones – can’t perform and update the security tests we can,” says Pardo.
Agility and speed
At a time when HR leaders face many challenges – skills shortages, the impact of remote working, economic slowdowns – it can be easy to relegate data integration and HR systems updates to a ‘future problem’.
This is a mistake. Consolidating your data systems gives you better information to make more informed strategic decisions. It also allows you to move quicker, argues Pardo.
“Organisations are changing. You need to have flexible solutions to adapt to a changing market. Old systems are too rigid and out of date, but new models like ours provide flexibility, compliance and security,” he says.
Pardo gives the example of a hospitality client who runs ad hoc events for which they need to hire temporary staff at speed. Using SD Worx’s integrated software, they review the skills of employees to identify talent gaps and plug into external job boards to recruit staff. The tool allows them to implement and manage a budget, while allowing the flexibility for departments to work together on projects.
Updating and outsourcing management of HR systems also allows organisations to free up resources to focus on future challenges. Many legacy payroll and talent management systems have become unwieldy and labour-intensive, taking up too much of employees’ time to manage.
Trust the experts
“A lot of people move to cloud-based solutions because they have a shortage of people who can maintain existing systems,” points out Pardo.
“They might have legacy systems that are 20 years old and function adequately, but the people who manage them are about to retire or are better equipped to work elsewhere in the business. As an outsourcer, we can help organisations manage this challenge and make better use of their resources,” he adds.
Ultimately, outsourcing your payroll management and HR systems is about improving agility, security and the quality of your data. But different organisations face different problems, so there is no single solution.
“Some businesses worry about a loss of autonomy. They understand the benefits of outsourcing for security, compliance and legal updates, but they might want to keep control of their payroll. Our advice here is to compromise. We provide better security and compliance on systems, but you keep your payroll in-house for now,” says Pardo.
“We want to work with clients to allow them to focus more on strategy, as well as making cost savings. Take the bits of our offering that work for you and keep the rest in-house. Down the line, you might want to outsource more elements,” he adds.
The world of work is changing rapidly, and organisations need to change too to meet the demands of both customers and employees. This means examining all elements of your business to see where you can become more agile, adaptable and strategic. One way to achieve this is to partner with expert organisations that can update and then streamline existing processes, allowing business leaders to focus on more strategic goals.
“Organisations are changing, so you need flexible solutions to adapt to a changing market. When things get more complex, you need to work with partners who can adapt and be compliant in the new world of work,” says Pardo.
To explore how a unified HR platform can enable strategic success, please visit SD Worx.