Companies told to use HR in decision-making

MANILA, Philippines - Local companies should focus more on using their human resource (HR) department as a strategic tool for decision-making instead of letting it go to waste by devoting too much time on administrative tasks such as filing employees’ sick leaves and handling payroll. A survey done on 270 Asia-Pacific companies in September by United States-based research firm CedarCrestone together with Oracle Corp. Co. Ltd. showed that firms using human capital management (HCM) software, which made HR tasks more efficient and precise, were more profitable than those that did not integrate human capital management programs in their operations. "What we found was that using talent management solutions is important for growth," Tim Darton, Oracle Asia-Pacific HCM Sales general manager, told a briefing early this week. He said companies that had used their HR departments to help in decision-making instead of making these attend to administrative tasks were also companies that were twice as profitable as companies that did not. HCM software, he said, are programs that make HR tasks more efficient. For example, the software lets employees file a leave or take out loans from the office through the Internet, instead of having to call up people in the company. He said HCM software also helps in collecting information like payroll and the number of employees in a company more accurately. "The more a company understands the abilities of its staff, the more it can align these to the changing needs of the company," he said. During the briefing, HR Mall, Inc. General Manager and Ayala Corp. Corporate Information Officer Angelica B. Rapadas said one option for companies is to outsource administrative human resource services. She said companies that outsource human resource tasks are given the chance to use "world-class" HCM services without investing a big amount of money. In some companies, she said, as much as 80% of the HR department’s time is devoted to administrative and clerical jobs, instead of interpreting employee information that can help the company make more informed decisions about its work force. Ms. Rapadas said having in-house HR departments doing administrative tasks might also leave the company prone to human errors and inefficiencies. "A number of HR departments in big companies are still paper-based," she said. She said outsourcing HR services to business process outsourcing firms that use state-of-the-art HCM technology would lead to lower risks. This would also allow companies focus on their core competencies. "It’s having a system that can better manage a company’s biggest expense." — Paolo Luis G. Montecillo, BusinessWorld