How to Identify Employee Costs Using Your HRMS
Any employer can tell you that employee costs are a major part of any budget. As you look at a line item for staff costs each year, is it a surprise? Or are you giving it a best guess and hoping that your employee costs come in under budget? If you have an HRMS, this task becomes easier as you can use the system to analyse and act on employee costs before they spiral out of control.
Tracking Direct Employee Costs
You may be tracking obvious data elements such as salary, but are you using your HRMS to track all direct employee costs? Often salary, bonus and health plan costs will be stored in the HRMS if it feeds payroll, but even if your HRMS is not feeding payroll, there is usually a benefit to tracking other monetary costs such as allowances and earnings, in particular if they are over a certain threshold.
Another major monetary employee cost is training. Many companies invest in an LMS to track training taken to ensure compliance, but are you maximizing your investment by tracking the associated cost of training sessions? Also relevant are costs of external training courses, as these can often be more expensive than internally provided options.
Tracking Indirect Employee Costs
Are you tracking company property so that you’re aware of the equipment and devices given to an employee? Even if you do not track the costs of these items, it’s relevant to track that employee has been granted this property, and monthly estimates can then be used for budgeting purposes. Many times a manager signs off on a request and then forgets about the cost over time. By tracking all of this data in the HRMS, you’re putting data at your fingertips for analysis.
I know of a major company that recently embarked on a project to reconcile employee costs due to various items provided by the business: home broadband, phone cards, mobile phones, etc. As the items were not tracked in the HRMS, much reconciling was done using HRMS data and comparing it to the data found in other systems. In some cases employees were no longer with the company but still generating a cost through these services that were never cancelled! Your HRMS is a key weapon in winning the war over cost control.
Best-of-breed vs integrated HRMS: which should you choose?
Should your company select an integrated HRMS or best-of-breed software? It’s not a simple question
The role of your HR manager during HRMS implementation
A discussion of the role your HR manager should play in HRMS implementation
Three workforce planning hacks your HRMS can help with
How HRMS features can facilitate your HR department’s workforce planning activities