The role of HR systems in a recession

I had a discussion earlier this week about the rights and wrongs of implementing a new HR system when a company is feeling the effects of a downturn. The case was put that a company can't justify implementing a new HR system because there are redundancies in the offing. The system in question would substantially streamline HR processes and give senior management vastly superior information with which to run the company!

You may feel that I am slightly biased - and you would be right. BUT the case still stands:

• HR is continually being told that it is a strategic function but is often buried with admin. If the system frees up time for them to think and act strategically it must be a good thing for the business;
• Huge amounts of time is being wasted on HR admin that a system is better at (eg holiday booking, sickness reporting, expense processing, data updating). Often the time is being spent outside of HR - managers pushing paper.
• Incorrect / incomplete data costs companies money and can lead to decisions based on bad information.
• Even the most basic HR reporting is taking hours to prepare and is therefore not timely. How long does it take to prepare a report showing headcount & salary cost by location an division? It shoduo be at available at teh push of a button.

If company has over 30 people there is a good case for a system, especially given the low cost of online systems (eg http://www.breathehr.com/). If a company has over 100 employees and an inefficient system then there are almost certainly cost savings to be made. The key is to not get too carried away with the wish list - the bells and whistles can come later when good times return.

A different way to run a company and manage people

For a while I have been hearing good things about a company called Patagonia, especially relating to the way they run their business. So to read a book by Patagonia's founder, Yvon Chouinard, was fascinating.

The company is run around eight philosophies:

• design


• production


• distribution


• image


• human resources


• finance


• management


• environment

Each philosophy is used as a guide rather than a set of rules and, for me, the approach can be summed up by their 'Let My People Go Surfing' flexitime policy - if the swell is good then go surfing in the afternoon or be there for the kids when they get off the school bus. Loyal happy employees wont take advantage of the system, and in fact will be more dedicated.

The whole plan seems to be around minimising the negative impact that the business has on the world and maximising the positive impact. They donate 1% of sales (not profit) to good causes.

If you are into finding out about different ways of managing people and business take a look at the book 'Let my people go surfing: an education of a reluctant businessman' by Yvon Chouinard. They also do great clothing! http://www.patagonia.com/