Investment in HR technology on the rise
Whether its the increased need of tracking employee hours due to the Affordable Care Act or just the sheer ease of accessing information on the cloud, investments in HR technology have continued to grow across all employers, segments and industries.
Next year, the ACAs employer mandate, a hefty responsibility that requires employers with 50 or more full-time employees to provide health care coverage, comes into effect. An employee is considered full-time if they work 30 hours or more per week, a marker that can fluctuate among many employer organizations as the year progresses. For this reason, Frank Scavo, president of Computer Economics, a research and advisory firm that provides metrics for IT management, believes that the ACA may be part of the reason why the usage of human capital management systems has seen a recent uptick.
The leading category of HCM systems for investment over the next 18 months is workforce management and that would be impacted by the ACA because you have to track employee hours very carefully, says Scavo. Workforce management systems are exactly what do that [track employee hours]. I think its not the only thing thats driving workforce management adoption, but it certainly is a contributor.
Meanwhile, Stacey Pezold, executive vice president of operations at Paycom, a provider of comprehensive cloud-based HCM systems, explains the technological need borne out of the landmark health care law was something that the Oklahoma City-based company sought to address. It unveiled a new ACA dashboard at the start of December to help address the 2015 mandate.
Employers now must track each individuals hours worked to determine their full-time status, whether an offer of coverage was made to full-time employees during a very specific amount of time, while also determining whether or not the insurance offered was affordable according to ACA guidelines, says Pezold.
In recent research, Irvine, Calif.-based Computer Economics finds that there has been slow, but steady, growth among HCM investments across all companies. In 2014, 22% of all organizations report taking part in these technology investments, a 2% climb from last years tally and 4% from the plateau reached in 2012. The small positive swing, according to Scavo, is due to the increased ease of use and reasonable cost.
The cost is reasonable, and I think also the cloud deployment of these solutions makes it much easier for smaller and mid-sized businesses to take up, Scavo notes.
Typically, HCM systems help companies deal with core HR functions such as personnel data and benefits administration, payroll, recruiting and all aspects of workforce planning and analytics. Scavo says that retailers, wholesale, health care and financial services will see more usage of HCM systems due to their needs for compliance issues, employee training and certifications.
Not every company needs supply chain management, but every company needs human capital management, says Scavo.