11 most common HRMS implementation challenges

Selecting the perfect HRMS for your business needs is only the first step. At this stage, the system is only potentially perfect. Whether your new technology really transforms your HR depends on the installation and the implementation. And that brings some very tangible challenges. Use the links below to jump to each section:

• Project management
• Change management
• Stakeholder management
• Configuration and testing
• HRMS data accuracy
• HRMS data migration
• Testing the data
• Data security
• Adequate user training
• Compliance
• Scalability

Project management

Before we even consider the technical or functional aspects of the system itself, there’s the question of how you’ll manage the process of implementation. Do you have a dedicated implementation team in place? If some or all of the team are involved in the project in addition to their ‘day job’ (very likely to be the case, in fact, the norm) then what support is in place to help them balance priorities. If none, it’s your HRMS implementation that’s likely to suffer.

Who is on the team? Are the relevant stakeholder groups represented? Is there enough crossover with the team who managed the selection of the system (i.e. does the implementation team have access to the knowledge and experience of the selection process?)

Change management

You’re not just making a technology change, you’re changing people’s working environment, changing the way they access HR services, and – in the case of HR staff – changing their job roles and responsibilities. Have you factored in the human response to these changes?

However smoothly managed the project, people have emotional responses to change, and these responses always contain a negative element (no matter how much of an improvement your new HRMS promises to be, all change is loss – even if the loss is of the familiarity of the old way of doing things).

People’s reactions to change should inform how you manage the project, especially your communications strategy. Employers should manage and prioritize messaging to support users and stakeholders while they pass through their emotional responses as quickly as possible and arrive at their ‘new normal'.

Stakeholder management

All HRMS users are stakeholders in your implementation project but not all stakeholders are users. A stakeholder is anyone who has an interest in and/or an influence over your HRMS implementation. While employees are an important group, your stakeholders also include senior management and the C-suite who may never actually use the system personally but nevertheless expect to see and reap the benefits.

Then there are the specialist roles who will interact with and use the HRMS in their own specific ways (e.g. HR, payroll, and finance staff). You could even make a case for key clients and suppliers being impacted in some way, or being able to affect the success of the implementation process.

Different stakeholder groups will have different requirements for the implementation. The way you manage the project, and communicate with these stakeholders to ensure that they are ‘along for the ride’ will differ depending on the stakeholder. Your communications strategy will in fact be a number of differently-focused mini-strategies. Hopefully, stakeholder engagement was a core element of managing the selection of your chosen HRMS and can be continued seamlessly during implementation.

Configuration and testing

The degree of configuration necessary depends on how complex your HR automation needs are. Maybe your chosen HRMS is exactly what you need, straight out of the box – plug and play. However, it’s also possible that your HRMS implementation project will involve a review of your HR procedures and some consequent tweaking of the system’s processes.

You may need to amend process steps to match your workforce requirements, make some changes to input fields, or simply add your corporate name and logo for internal branding purposes. Either way, some configuration and customization may be indicated.

Bear in mind that users are unforgiving beings, highly intolerant of mistakes and system errors. If you’re tempted to rush the configuration and testing, don’t. If no problems are identified, there’s a good chance you’re not testing hard enough!

Check out our complete HRMS implementation plan for a step-by-step guide on how to implement your HR software successfully

HRMS data accuracy

Leaving aside for a moment the system itself, there’s also the issue of the data you’ll be using with the system. Your primary source of data to populate the new HRMS is your current employee records. These may be held on your old HRMS, a simple database, an Excel-style spreadsheet, or perhaps even in a filing cabinet. As well as the task of putting that data into a format that the new system can accept and use, there’s also an accuracy issue.

HRMS data migration

Migrating your employee and HR data from one system of record to another is the perfect opportunity to go out to employees and ask them to check and, if necessary, update their own personal information. Not only is this a case of delegating the task to those best placed to carry it out, but such an exercise can also be used as part of your stakeholder engagement strategy, involving future users in the development of the new system you expect them to use.

Testing the data

Once the system is data-filled and ready to go, it’s time to test it. Skipping this stage is just begging for a disaster to happen – after all, for software that will handle or influence payroll, and holds sensitive personal information (name, address, social security numbers, banking details…) any error or problem is unlikely to be minor; especially to the poor employee on the receiving end.

Test everything, including basic functioning and navigation, integration with other software (ERP, CRM, standalone best-of-breed HR modules), and production of key reports. Particularly important is the parallel testing with the old system or way of doing things. The bottom line for your users is that the new HRMS must be better than how things were done before – you’re looking to be sure that the new system will outperform the old.

Data security

Data accuracy and migration are important, and so is the security of that data once it’s safely transferred to the new HRMS. Why is security such an issue? The U.S. was the target of 46% of cyberattacks in 2020 (more than double any other country), and the average cost of a data breach is $4.24 million.

The key risk factors for HRMS security include the following:

• Ransomware attacks (in which a cyber attacker hacks a business’s systems and shuts them down pending payment) – on the increase throughout 2022, making protection against ransomware a rising issue. The pressure is double-sided: not only are attackers targeting your systems but you could be penalized legally if you pay.
• The Internet of Things - connecting physical devices, systems, and other mechanisms via the internet brings vulnerability, including to the physical operational systems that are controlled via the IoT.
• Remote & hybrid working – on the rise thanks to the COVID-19 pandemic and showing no sign of returning to pre-pandemic levels, more and more employees are accessing their employer’s systems (including HRMS) from home, with all the attendant risks.
• Mobile access – a constant off-premises flow of data between users’ devices and your HRMS (whether in the cloud or not) represents an opportunity for a cyber-attack.
• BYOD – the security risk inherent in mobile access is increased when employees use their own devices to access the HRMS.
• Unhappy employees – non-technical but nevertheless a security risk, the disgruntled employee can feel less incentive to observe your system security needs.

Adequate user training

Congratulations, your new system is exactly what your business needs and the technical installation has been carried out flawlessly. But your HRMS implementation may still fail. Why? Because of inadequate user training. People prefer to use systems with which they are comfortable and familiar. Creating that comfort and familiarity prior to your system's go-live date depends on appropriate training and different users will have different needs.

• HR staff - how to operate new interfaces, new inputs, and reporting capabilities.
• Managers - how to use the new HR dashboard.
• C-suite and senior executives - how to access and use strategic data.
• Employees - how to access employee self-service functionality.

Check out this guide to migrating your HR data and how to prepare your HRMS data

Above all, avoid the temptation of ‘sheep-dip’ training in which everyone gets the same package regardless of role or need. And with different user needs in mind, consider your training channels. Different people respond best to different methods of obtaining the necessary information.

You may need to consider a variety of learning methods, including face-to-face training courses, online e-learning, ‘just-in-time’ tutorials on your intranet, or expert ‘super users’ who can coach their colleagues on an ad hoc, as-needed basis. However you do it, the basic elements of your user training should include:

• Business reasons for the new system – including potential benefits to both the organization and individual employees.
• The on-screen user experience – screens, fields, basic navigation around the system, etc.
• Changes to HR services – what’s different in the way users will access HR from now on?
• Ongoing support – for post-go-live issues, where do they go?

Remember, a change of software, as with any change of system or procedure, is effectively a de-skilling event – users used to know how to book a week’s leave, but now they don’t. You’re aiming to restore user skills and familiarity to at least previous levels. HRMS implementation user training should at least give users what they need to know. Even if the state of ‘unconscious competence’ takes a while longer, they should at least know how to find out what they need to know from day one.

Compliance

This may be a long-term challenge, but the seeds of solving it are best planted at the implementation stage. Essentially, you’re expecting that your new HRMS will support your compliance with labor regulations and legislation. One of the benefits of automated HR is that the system will prompt managers and employees to carry out compliance actions, such as recording key information and subsequently producing timely reports for submission to the appropriate government office.

It’s important that your system is aligned with the legal requirements of your territory. Naturally, this is a more complicated (and critical) issue if your business is spread over more than one country or legislative region.

Scalability

The issue of scalability is all about the future. Your new HRMS may be fit for purpose today but what about tomorrow? Or five years’ time? First, there’s the issue of the future as defined by the business. Ask yourself:

• What are the present organizational strategic priorities?
• What are the broad future plans: expansion, diversification, consolidation, acquisition?
• How might your HRMS support the achievement of those future strategic goals?

Then there’s a future defined by employees and system users. You’ve consulted them on their requirements and needs as part of the HRMS selection process. But sometimes the result is a wish list; not all user requests make it onto the list of requirements you send out to HRMS vendors. Some of those requests for additional functions or upgrades may be of secondary priority, to be implemented at some future date.

In that case, the system has to be able to accommodate the scaling up to a broader functionality, and you can lay the foundations for that now. For example, if for simplicity’s sake, your plan is to integrate HRMS and payroll software a year or two down the line, you can still bear that integration in mind during the initial configuration and setup (and data cleansing), thus making the whole process of expanding functionality smoother and easier when it happens later on.

As with any IT project, introducing a new HRMS brings a number of issues. No matter what size of business you are, or to what degree you’re planning to automate your human resources processes, the above HRMS implementation challenges are potential obstacles in your path. Ignore them at your peril.