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Five Benefits of Introducing a New HR System

We’re halfway through April, so if you haven’t started Spring cleaning yet, now might be the right time.

It’s easy to sit on legacy systems – if it’s not broken, then why fix it?

Well, here are five reasons why you should consider.

Compliance

Last month, the government named more than 500 companies in the United Kingdom for paying some of their staff below the national minimum wage. Greggs, Easyjet and Moss Bros were among them.

There’s no excuse for underpaying workers, but the report also pointed out that “not all minimum wage underpayments are intentional.” In any case, more than 172,000 workers were compensated, and the businesses were collectively fined nearly £16 million.

It sounds like a hard mistake to make, but payroll compliance is quite complicated. For example, a company may accidentally place workers in the wrong minimum wage category, fail to take note of worker’s birthdays that trigger an increased rate, or not reimburse workers for work expenses.

Compliance is tricky. If it’s not ever-changing minimum wage laws that companies trip over, it could be statutory benefits, leave pay, or properly compensating overtime. There are hefty fines for breaking these laws, regardless of whether it was intentional or not.

If your HR system is old, it’s probably inefficient and prone to mistakes (most legacy software is). The government doesn’t care whether or not your inability to comply with pay laws was your software’s fault—they only care that you get it right.

So, if you haven’t overhauled your HR system in a while, it’s not a bad idea to consider introducing a more modern one.

Enhanced Global Capabilities

By now, it goes without saying that we live in a hyper-connected global economy. Already, more than 10% For many British companies, looking to the world is a big part of their growth plans.

For some businesses, this may limited to exporting. Other companies will take advantage of the global talent pool and expand their footprint with global employees. In the case of the latter, this often brings new HR problems.

For example, multinational businesses must comply with regional laws, handle different currencies, and implement locally relevant compensation packages.

Your HR system must be agile and flexible enough to handle this. For example, cloud-based software helps reduce compliance risks because it can stay up to date with local regulations. Newer systems can also manage payroll in local currencies with reduced risk of error.

For more information, check out our global payroll solutions guide here.

Data Security

Last year, WHSmith suffered a data breach, resulting in the leak of many of its employees’ names, addresses, national insurance numbers, and dates of birth. Hackers don’t only target big corporates. In 2023, more than half of UK businesses suffered a “cyber-incident”.

Despite most of these breaches containing malicious actors, employers can still be liable for any personal financial repercussions that happen as a result of the breach. Even if they avoid a lawsuit, companies must still deal with the fallout of an attack, including properly notifying employees, informing the government, and auditing all of their cybersecurity systems.

While the vast majority of these attacks often come down to human error, old software is still a problem. Cyber security measures update frequently, so if your company hasn’t reviewed its HR system in a while, it could be at greater risk.

Save costs

Older tech systems are usually slower, clunkier and harder to use than more recent models. It’s a big issue for the NHS, where legacy systems are so frustrating that staff are even resigning. In fact, it’s estimated that 77% of the healthcare sector is limited by outdated tech.

It’s not just healthcare. An American study found that legacy systems can increase costs by 15% each year due to the difficulty of maintaining them. There are hidden costs, too. For example, older tech tends to be more energy-intensive, leading to higher bills. They’re also prone to crashes and bugs, which leads to wasted time.

Modern HR systems are constantly supported by developers, meaning that most of these issues aren’t as present. Any that do arise are more easily fixable. The money spent overhauling your HR system will quickly pay itself off.

Better Employee Self-Service

Employee self-service lets employees access and manage their personal records and HR-related tasks on their own. For example, they may view pay stubs, update personal information, or request time off.

It massively reduces the compliance risks for businesses. When employees input or update their own data, such as bank account details for payroll or addresses for tax purposes, it ensures that the information is current. This helps avoid common payroll errors, such as those related to outdated employee information, which (as mentioned earlier) can lead to violations of wage laws.

Moreover, it streamlines management processes, enabling managers to view and approve requests more efficiently. With modern HR systems, managers can quickly access team members’ leave requests, performance reviews, and other necessary documents without back-and-forth emails and paperwork.

Older HR systems often have employee self-service. Moreover, the ones that do are cumbersome and difficult to use, mitigating any benefits.

Global HRIS

Our dedicated team of consultants will support your move to a new HR system. We’re here to help at every step: whichever system you’re transitioning from, we’ve got you covered.

Find out more about how we can help you by calling Global HRIS today on +44 161 317 2903 or get in touch through our website.
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