Selecting HR services, focus on integration the most
Digital transformation, which has been a hot topic since before the pandemic, has now become an essential element for corporate survival, and the HR field is no exception.
It is no exaggeration to say that it is the goal of all HR departments to respond to the global business environment through HR digital transformation, streamline business processes, and improve employee experience through convenience enhancement.
However, in this process, the gap between large companies and small and medium-sized enterprises is getting wider. While large corporations, which have focused enormous financial and human resources on digital transformation even before the pandemic, are leading the way, small and medium-sized enterprises (SMEs) are focusing their efforts on responding to the challenges brought on by the pandemic, rather than focusing on digital transformation and transformation. In this regard, it is only repeating steps in place.
What kind of efforts will be required for small and medium-sized enterprises to get out of this situation?
We heard about the plan through an interview with Seung-Hwan Lim, managing director of Younglimwon Softlab BPO Platform Business Group , who is leading the HR digital transformation of small and medium-sized companies .
What kind of changes does corporate digital transformation bring to business?
As new technologies emerge, the business environment is rapidly transforming into a form based on advanced information systems. Recently, the accuracy and immediacy of the information that a company can provide to customers depends on how advanced an information system is and how well it can be utilized, which is directly related to business competitiveness. In the past, it was simply entering and analyzing information, but now it has reached the point of deriving industrial knowledge based on analyzed information and predicting the future.
These predictions cannot be made simply with technologies such as artificial intelligence, but must be based on industrial knowledge. That is why, in the end, I believe that only companies that can successfully utilize information systems based on industrial knowledge and have succeeded in digital transformation will survive in the future.
What kind of changes are taking place in HR in the process of digital transformation, and what is the current situation of the HR digital transformation gap between large companies and small and medium-sized companies.
Just as information systems that were scattered in the form of Excel in the past were integrated into ERP, I think HR is also going through the process of integration in a similar form. However, the degree of integration varies greatly depending on the size of the company. Small and medium-sized enterprises are at the stage of collecting scattered HR information, medium-sized enterprises are interested in automating and efficiency of HR information collected earlier, and large enterprises are in the process of automating and efficiency. It has even reached the point of analyzing HR information and using it as an aid to decision-making. Even the role of HR, which is the original function of nurturing talents and placing them in appropriate positions, and retaining talents, can now be helped by technology.
What is the most difficult part for SMEs and mid-sized companies in relation to HR digital transformation, and how should they solve it?
The biggest stumbling block to HR digital transformation for small and medium-sized enterprises is the inability to efficiently perform complicated and repetitive tasks. There are still a lot of companies that ask the HR department how many annual leaves are left and directly apply for the use of congratulatory and condolence leave. Even in mid-sized companies with sales of more than 30 billion won, there are often only three or four people in charge of HR, but if about half of them have to devote all their energy to such complex and repetitive tasks, how can the HR department devote time to its original job, talent development and growth? Will there be
Small and medium-sized companies with limited resources compared to large companies automate these complex and repetitive tasks or transfer them to the field of outsourcing, which is the original task that the HR manager must perform, that is, talent development and growth, and HR data analysis from an integrated perspective. should be able to do it.
What are the complex and repetitive tasks in the HR area, and how can these tasks be reduced?
The most typical complex and repetitive tasks performed by HR are attendance and payroll management. It’s complicated, but it’s repetitive, and it’s an area where no mistakes can be made. However, small and medium-sized companies are experiencing the rapid turnover of members in real time in the era of death. In some cases, the turnover of members is so frequent that the person in charge changes within just one month. Therefore, it is necessary to store time and attendance data and payroll data in a cloud environment that can be reliably accumulated in one place even if the person in charge changes.
Recently, outsourcing services in the field of time and attendance and payroll management have been changed to provide standardized services in a cloud environment, and RPA has been applied to the outsourcing services themselves, making them largely automated. In the process, the cost has become considerably cheaper, so small and medium-sized businesses can also use high-quality services without burdening large expenses.
In the case of time and attendance management, if you automate it to an environment where real-time gathering is possible using mobile, you can simply collect the time and attendance of all employees, and payroll management can be automated so that you do not have to download the payroll file and enter it on the website of the National Tax Service. We recommend that you reduce the weight of your work.
All areas of HR are digitalized, from recruitment to attendance management, payroll management, performance management, and growth management. What should be the most important part when choosing these HR services for small and medium-sized businesses?
At first, while mentioning the process of integrating the ERP system, I mentioned that HR is going through a similar process of integration, but the part I want to emphasize here is ‘integration’. In the early days of the ERP system, many services appeared. However, by using different services without considering the integration of each area, companies ended up spending double or triple the cost to build an integrated ERP service.
The same goes for the HR area. It is necessary to find out if the messenger for time and attendance management, payroll management, and collaboration is interlocked. This is because if different messengers are selected for time and attendance management, payroll management, and collaboration depending on the situation, problems will eventually occur in the data collection process.
In fact, I have seen cases where a mid-sized manufacturing company with more than 1,000 employees chose T&A service as a service that requires entry into a PC rather than a mobile device in the initial stage as part of HR digital transformation.
Production workers working at the factory found it cumbersome to input data on PCs, so the HR manager manually received the time and attendance management data, compiled them in Excel, and inputted overtime pay into the payroll system one by one according to the collected data. And in the case of conversations and files that came and went during the process of time and attendance management, the only way to find them was to look for them individually as they were using another company’s messenger service.
Since the messengers for time and attendance management, payroll management, and collaboration are connected as one work structure, choosing a service from a company that can seamlessly link them is the best choice to prevent inefficiency in the work process.
Conversely, what should be avoided the most when choosing an HR service?
I’d advise you to choose a company that can maintain the interface for the long term. Even in the case of the ERP market, there were so many companies that operated services as government-supported projects in the early days, but in the end, only two or three companies, including Younglimwon, have survived until now. In the end, only major companies that can provide permanent service will survive.
The current HR service market is truly in the era of the Spring and Autumn Warring States. Various companies, from start-ups to large corporations, have entered the market and boasted their own features. However, you should refrain from choosing a service that does not guarantee integration just because of its attractive appearance.
As an extension, you should also be wary of offers to develop and provide services tailored to our company. In order to receive stable service support, you should choose a company that has already experienced various cases and implemented functions that can accommodate them, rather than a company that will develop and implement a new function because it is not included in the existing service.
Compared to HR services of global companies, what are the advantages of Younglimwon HR services?
I emphasized integration earlier, but the most important part of integration is payroll management. However, when tax and labor related laws are complex and constantly changing, as in Korea, it is very difficult to manage wages.
Even if the time and attendance management is good, in the end, it must be connected to payroll management based on this to be automated in the true sense, but HR services of global companies eventually have to be localized with local services due to tax law issues. In the case of Younglimwon, the biggest advantage is that it forms a partnership with experts in labor, tax, and accounting firms to support immediate resolution of questions from HR managers of clients, and that various changes can be immediately reflected in the service.
Since the pandemic, ‘hybrid work’ has become a major working environment for companies. Now that we work in various working hours and places, how should HR manage time and attendance?
Before the pandemic, there were not many companies that did flexible work or telecommuting, but now it has become a daily routine with nothing unusual. Younglimwon also has a flexible work system, and operates a selective work system that manages the total amount of work. The key to this fast-changing time and attendance management market lies in ‘mobile’. The analog method of collecting time and attendance data later causes an error somewhere, so it is necessary to support a mobile time and attendance management environment that can process data immediately.
In the process of introducing mobile attendance management, if time or location management is implemented, there may be objections from employees. Therefore, HR must first consider how far to collect and manage attendance management information, and if necessary, consult with the labor union in advance.
In addition, it is necessary to flexibly handle the part related to annual leave in the process of time and attendance management, and since this part is linked to labor management and payroll management, it is necessary to apply an integrated system. In recent years, there are many cases in which the form of work is completely different even within one company. The production organization, the development organization, and the distribution organization take completely different forms of work. Only when you select a service that captures these various types of work and links them to wages can you calculate comprehensive HR data in the future and move on to data-based HR.
Some companies are cautious about outsourcing because payroll management is an important part internally.
In the case of the United States, there are already many large companies outsourcing not only HR but also general affairs and finance. In the case of domestic companies, there is no need for outsourcing in the financial sector, and outsourcing in the HR sector is gradually increasing. We believe this trend will accelerate further in the future.
Occasionally, companies are wary of outsourcing payroll management due to information security issues, but outsourcing payroll management is advantageous in terms of maintaining security because access to in-house personnel who can access the information is blocked. there is. In addition, I would like to emphasize that Younglimwon strictly protects information security, such as acquiring the information security management system ‘ISO 27001’ certification from the International Organization for Standardization.
If you could give a piece of advice to HR managers of small and medium-sized companies who are thinking about HR digital transformation, what would it be?
Before thinking about HR digital transformation, it is important to analyze our company’s capabilities and draw a roadmap accordingly. Our company’s HR needs to choose where to focus its HR digital transformation, and seek advice from the IT department in this regard.
Since the viewpoints of the IT department can be quite different from those of the HR department, HR managers must collect and digest as many different perspectives as possible to develop their capabilities. There may be many companies that have HR and IT experts in-house, but very few people can play the role of bridging HR and IT capabilities. Companies now need HR people to play this bridging role. We expect HR managers to build their own HR digital transformation road by integrating HR knowledge and IT knowledge.
