HR Data Management: Asset or Liability?

Good HR data management software should make compliance easy - but more than that, HR systems can turn your HR data into a real asset. And yours?

Companies that have better control over their data are better able to weather storms - and there have been plenty of them in recent years. That means HR analytics has been at the top of HR leaders' minds lately as they respond to challenges like the expansion of remote and hybrid working, and an increasingly difficult financial environment.

While HR analytics is important from a compliance perspective, which is understandably a major concern for many HR teams, modern HR data management software goes much further - turning your HR data into a source of insights that enables sophisticated data-driven decision-making and improves the employee experience.

Let's explore this so you can assess how your HR data management software stacks up.

HR Data Management Software Should Keep Your Data Private and Secure

HR has sensitive data about employees, such as personal details, salary data, and performance evaluation data. It is your responsibility to protect this data and keep it both private and secure. Typically, this is done by using HR data management software.

These are closely related concepts that fall under the umbrella of data privacy. Data Privacy Manager explains it as follows: “Data privacy deals with the proper handling, processing, storage, and use of personal data… Privacy is generally the individual’s right to freedom from interference.” On the other hand, “data security focuses on protecting personal data from unauthorized third-party access or malicious attacks and exploitation of the data.”

In the context of HR, data privacy means that your employees have the right to know what data you collect about them, how you use it, and who has access to it.
Your HR data management software should ensure that employee data (especially when it's sensitive, personal data) is collected, stored and used in accordance with the General Data Protection Regulation and that employees have control over their own data. It should also help ensure employees are informed of the data you hold and allow you to promptly delete data when employees leave.

Data security means implementing cyber protection measures to keep your employees' data safe from unauthorised access, breaches or attacks. This can include measures such as encryption, access controls and permissions. It also includes procedures to respond quickly in the event of a breach and training for your employees to help them recognise breaches and potential cyber attacks.

And breaches happen. According to a 2022 government report, two in five UK businesses reported cybersecurity breaches or attacks in the past 12 months. WHSmith is one of the latest companies to join a growing list of affected employers after a cyberattack in March 2023 resulted in data belonging to current and former employees being improperly accessed.

Such breaches are a nightmare for HR (and management), and the consequences of getting things wrong can be severe:

• General Data Protection Regulation violations can result in a ban on data use and a fine of up to €20 million, or 4% of the company's annual global turnover.
• Data breaches can expose sensitive employee data, threatening identity theft, financial loss, and emotional harm. This opens the company up to legal action: costly, time-consuming, potentially expensive, and better avoided overall.
• Data breaches can undermine employee trust and affect morale, leading to lower productivity and increased turnover.
• Data breaches can cause significant damage to a company's reputation, both from a consumer and employer brand perspective. Issues like these can affect your ability to successfully attract, hire and retain talent - and also eat into profits by impacting customer spending and loyalty.
• Investigating security breaches can also be expensive, even without fines. If you're hit by a cyberattack, you'll need to conduct thorough investigations to find the source of the breach and fix vulnerabilities to restore customer and employee trust and ensure it doesn't happen again

The right HR data management software will protect you from these risks and enable you to collect, process and store your employees' data with confidence and in compliance with data protection regulations.

Your HR software provider should have robust security measures in place to protect your data. This typically includes secure data storage, backup and restore protocols, and tools to protect against cyber threats.

IceHrm offers the highest level of data security:

• We are ISO 27001 and Cyber ​​Essentials Plus accredited and are externally audited annually to ensure compliance.
• Our applications and infrastructure are regularly reviewed through internal and external vulnerability and penetration testing.
• Our internal security forum - which includes certified GDPR experts - meets regularly to review security measures, policies and procedures.
• We provide regular data security training to all IceHrm employees and background checks to at least BS7858 standard.
• Our HR data management software has tools to help you comply with GDPR and includes an employee and exit data retention dashboard so you can manage and delete data appropriately.
• IceHrm is a cloud-based platform. Cloud systems tend to be more secure than on-premise solutions because security is built into the design and deployment, and it's easier to make frequent upgrades to the software to keep it secure

The right HR data management software can also help drive better decision making

Data protection is understandably high on most HR leaders' priority list when it comes to HR data. But the real fun comes next: when your data becomes a real asset to the business.

• Your HR department generates an ever-growing wealth of data, including:
• Job applications and resumes
• Hiring and onboarding data
• Performance and feedback data
• Disciplinary and termination data
• Benefits data
• Time and attendance data
• Learning and training data
• Diversity and inclusion data

This data isn't just a source of information that needs to be protected. It's also a source of insights that can be used in the service of better decision making.

That's the real question HR professionals should be asking: Can our HR data management software help us make the most of our most important asset by producing sophisticated HR reports and analytics?

With the right HR management software, you can not only meet your basic reporting requirements, but also perform more sophisticated analytics and modeling. A good HR data management software should simplify this process, with reports customized to provide insights into the areas that matter most to your business, and those reports automatically compiled and distributed to the right people.

Furthermore, HR shouldn't be the custodian of the data. The real value of data is revealed when everyone in the organization can use the relevant data to make better decisions at any time.

What key HR metrics are typically supported by HR data management software?

Modern HR data management software can help you report on everything you collect information on. That is, everything that happens digitally within your HR processes. For example, you can track metrics such as:

• Workplace equality and diversity metrics, such as: E.g. representation, diversity in the company and employee satisfaction with diversity initiatives
• Succession planning metrics to track employee development and develop your leadership talent
• Performance and performance distribution to track how employees are performing and whether managers are measuring performance fairly
• Turnover rate at the company, department and team level to understand trends and reduce or mitigate the impact of turnover
• Human resources costs to measure the costs of your HR functions and identify opportunities to increase efficiency
• Attendance and absence to better understand absences, quantify and reduce costs and be proactive

While there are reporting benefits to a standalone HR system - especially if you don't currently use specialized HR software - the greatest benefits come from choosing an integrated HR platform that brings together all of your HR functions, their software and their records.

The Benefits of Integrated HR Data Management Software

A major problem with HR reporting and analytics is that data is often scattered across numerous disparate systems rather than integrated into a single source of truth. For example, HR analyst Josh Bersin notes that the average large enterprise today uses an average of 9.1 core HR management applications.

This fragmentation has a major impact on your HR data, leading to potential vulnerabilities, overlap, inaccuracies, and a comprehensive loss of visibility and control.

This single source of truth is a particular problem in the education sector, as a single central record is required to ensure security. HR software for schools must enable organizations to maintain this single integrated record.

An integrated HR system connects all employee-related systems into a single data source, either through robust third-party integrations or by choosing a vendor with a range of solutions that already work seamlessly together.

This way, your data is much more accurate, and you get a bird's eye view of your employees' experience by connecting employee data across systems. This allows you to report on a wide range of HR metrics. For example:

Recruitment metrics

1. Time to fill. Knowing how long it takes to fill open positions will help you make smarter decisions to improve recruiting and create more accurate performance forecasts. For example, if the average time to fill for project managers is two months, you'll know when to start advertising before your big project starts. Or if time to fill positions is getting longer and you're losing people accordingly, you might make the smart decision to combine the interview stages between hiring managers and hiring managers.
2. Cost per hire. Knowing what hiring costs are will help you identify areas where costs can be reduced and will help you apply for and allocate your budget more intelligently. For example, knowing your average cost per hire will help you know if your HR goals are achievable with the current budget or if you need to consider process changes. You could shift your activities to more efficient hiring sources and then track whether that decision was cost-effective.

Integrated HR and recruiting software also often produces reports on recruiting metrics such as:

• Candidate origin
• Quality of hire
• Candidate experience
• Offer acceptance rate

Payroll metrics

If your central HR data management software is integrated with your payroll software, you can also report on a variety of specific payroll metrics, including:

1. Payroll error rate: It measures the percentage of erroneous payroll transactions that require rework. Knowing this data helps the payroll team make changes to reduce errors and save time. For example, if errors keep occurring when manually transferring data from system to system, you might decide to automate the process with integrated HR and payroll software.
2. Payroll processing time. Knowing how long it takes to process payroll from data entry to payroll payout helps payroll teams identify bottlenecks and optimize processes. For example, a common bottleneck in payroll is data entry and verification, as teams often rely on manual entry, which has a high error rate. Reviewing data, reconciling sources, and fixing errors can take a lot of time: time that could be saved by collecting more accurate, complete payroll data with payroll software that integrates seamlessly with your other systems.

Integrated HR and payroll software also typically produces reports on payroll metrics such as:

• Gross-to-net ratio
• Payroll compliance
• Payroll costs
• On-time payment rate
• Time to fix errors
• Payroll overtime

Training and learning metrics

If you invest in HR data management software with an integrated LMS, you can also generate reports on your L&D function (and all without manual data entry or duplication of effort). For example:

1. Training effectiveness. Understanding how well the company's learning and training programs have helped employees grow their relevant skills helps L&D teams make better training investment decisions and demonstrate the return on investment (ROI) of the training. For example, let's say you invested in training on workplace inclusion. Knowing whether your employees completed the training, were engaged, and retained their knowledge will help you make further investment decisions to optimize the training's impact on culture and minimize compliance risk. It also helps you prove value upwards.
2. Time to productivity gain. Knowing how long it takes new employees to become fully productive is often part of onboarding and helps ensure new employees receive the right support. This improves new employees' retention and accelerates new hires' time to value. For example, imagine a department always takes longer than average to become productive. This could prompt a closer look at training and onboarding and create more accurate performance forecasts.

A robust LMS can also typically help you understand:

• Skills gaps
• Training completion
• Training engagement
• Training spend
• Knowledge retention
• Collaborative learning metrics
• Training support metrics

Benefits of HR data management software for managers and employees

For your HR data to be a real asset, it shouldn't be siloed but should be available to employees and managers as well. This allows everyone in the company to make better decisions.

A good HR data management software should allow managers to track, measure and analyze their team's performance in a reliable and dependable way. This way, they can provide support when needed and increase team performance.

Employees should also ideally have a personalized dashboard where they can access data on their own progress and performance. An HR platform with self-service functionality gives employees this control and transparency over their data.

This is a huge win for employee engagement and productivity, and saves HR many hours of being an unnecessary middleman.

View data as an asset for business success

Data security is critical for HR teams - but the true power of HR analytics goes far beyond simplifying compliance. A good HR data management software should not only protect you, but also enable you to create reports, analyze and get real value from your data.

Effective HR data management software like IceHrm ensures your data is secure and compliant while unlocking insights for better decision-making. Choose IceHrm to transform your HR data into a true asset for your business.