Over three-quarters of companies use a human resources information system (HRIS), but only 16 per cent are integrated into an organisation-wide IT-system, a new report said.
According to a year-long study released today by the Chartered Institute of Personnel and Development (CIPD) and the Cranfield School of Management, such systems - which are used to monitor and manage personnel data, such as employee leave, training, recruitment and pay - are not being used to their full advantage.
"HR information systems can do the basics brilliantly in terms of improving the efficiency of HR processes. But well implemented systems have the potential to drive business performance, as well as providing effective means of employee engagement and communication," said Rebecca Clake, CIPD Organisation and Resourcing Adviser, in a statement. "Failing to invest the resources required and cutting corners or costs early on will leave businesses losing out in the long-term."
An integrated system with accurate data can help HR teams make better informed decisions, the study said.
"This will enable HR to make more accurate decisions and provide a consultancy service to managers to enable them to identify problems and improve efficiency," said Dr Emma Parry, the co-author of the report and a research fellow at Cranfield School of Management.
According to the study, HRIS are most frequently used for managing absences, training and rewards, as well as recruitment, payroll and appraisals. The study showed that 71 per cent of companies have an intranet, which are most commonly used to supply HR information and to download basic forms.
HR technology can also help companies manage a more flexible, dispersed workforce, the study said - helpful with more and more employees choosing to work from home.
While using technology to communicate with workers may be easier for both parties, it can also lead to "a feeling of isolation," the study said, stressing that regular face-to-face contact is still needed.
The study forecasted the need for HR professionals to learn more IT skills, as more than a quarter of respondents said their organisations' systems are too difficult for the HR department to use.
"HR must work with IT professionals to draw on the skills required to develop an information system that will meet the needs of HR, other users across the organisation and help achieve the wider business objectives," added Clake.
However, the study also suggested that automating administrative duties - such as payroll and other paper-work heavy areas - will allow them to spend more time on other aspects of their jobs.
Author: Nicole Kobie
Businesses fail to reap benefits of HR technology