The Importance of a Fool-proof HR System

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The Importance of a Fool-proof HR System

Posted on 05 January 2021 in Business | Gabriel Chua

A Secured HR System

Human Resources (HR) could plays the important role of being the backbone of any company, of any size, in any industry. From recruitment, employee welfare to running payroll, the HR department without question has multiple roles to play. More often than not, they utilise a Human Resource Management System (HRMS) to assist them in completing these roles.

But what happens when the HR department operates a second-class HRMS? Or worser yet, not even utilise a HRMS at all and stick to manual processes?

Time and time again, such oversight has been proven to bear many unwanted consequences that could cause organisations to suffer in more ways than one. In order for such events to not occur, there is a need to look back on such cases to see where things went wrong and how it can be avoided in the future.

The Cases

Case Study 1: Econ Precast

Problem: A supplier of precast concrete structures, Econ Precast were swindled of $387,000 when their Assistant HR Manager, Nurafizah, manipulated a loophole in their payroll system that allowed her to cash cheques for her own benefit. A document would be handed to Nurafizah which listed employee information such as their identities and salary owed, which she would then check for discrepancies before submitting these documents to the Finance Department who would afterwards issue cheques.

However, since members of the HR department were the only ones who were allowed to know the salaries of employees, Nurafizah was allowed to redact certain employee information to protect personalised employee details. This essentially enabled her to duplicate copies of these documents which would let her pocket extra cash from the additional cheques that were issued. This misappropriation of the company’s cash then went unnoticed for roughly 4 years before staff members happened to chance upon the discrepancy when discussing an internal project, which, by then, had already cost the company much more money than they knew.

Econ Precast

Lessons Learnt: In a nutshell, the payroll system of Econ Precast had a large flaw. While relying on manual processes is undoubtedly slow, the killing blow for the company was the absence of a check and balance system. This lapse in security put the firm at risk of ill-willed individuals looking to leverage upon such loopholes to cheat the system. As can be seen from the case of Econ Precast, having a payroll software with a check and balance system is paramount in protecting the financial assets of a company, and its reputation.

Case Study 2: Singapore Civil Service

Problem: The way that the many benefits of a civil servant are calculated, such as salary and medical leave wages, are usually based on the length of service. However, individuals who were deemed to be more physically fit would serve for a slightly shorter period of time. This consequently meant that the benefits that such individuals receive would be determined via different means. With thousands of Singaporeans working in civil service, an error in calculation would have serious consequences. When it was discovered that there was an error, more than $3.9 million in excess money had been paid out, affecting more than 3,000 individuals regarding their entitlements in leave and wage. The error in calculation of employees’ entitled benefits due to both human error and incorrect coding of the IT systems utilised to process such benefits.

Singapore Civil Service

Lessons Learnt: Essentially, the systematic error in calculations experienced by the Singapore Civil Service was due to their systems, such as their leave and payroll, not being a part of a seamlessly interconnected HRMS. Moreover, improper data and informational input caused by improper calculations were hard to detect. Such oversight and errors can cause organisations either to over or under value the various assets that they might have to pay-out, thus wasting much time and effort to correct any inconsistencies that might exist in their HR systems. Therefore, this highlights the importance of, a highly seamless integrated HR system is necessary in ensuring a proper management of an organisation’s various assets and resources.

Case Study 3: URBN

Problem: URBN, the parent company of Urban Outfitters, made a huge blunder when they forecasted a spike in sales for one of their shirt designs during the holiday period. The blunder, however, was not their forecast itself, but rather, an oversight in lack of planning for additional manpower. As a result of this oversight made by URBN, Urban Outfitters realised the need for additional manpower to deal with the rush, instead of hiring ad-hoc workers or paying their warehouse packers an overtime wage, they asked for their full-time salaried workers to volunteer without any pay whatsoever, under the disguise of this request being a “team-bonding” event. Suffice to say, this

Timesheet HR system

was a largely unpopular decision and when several media outlets caught wind of this, Urban Outfitters suffered much criticism and ridicule both internally and in the public eye.Perhaps, worst of all, employees were left disgruntled as a result of this poor practice, leading to higher level of dissatisfaction. For many, the trust built up between employer and employee over many years, crumbled overnight.

Lessons Learnt: This entire episode could have been avoided if Urban Outfitters had done two things. Firstly, utilising analytics tracking to better monitor and forecast sales and traffic. Secondly, Urban Outfitters could have employed a scheduling system for better staff allocation. If Urban Outfitters possessed the necessary foresight to encompass these two things as a cohesive unit, not only would they have predicted the surge in sales more efficiently, but they would be able to quickly adjust their manpower requirements, roster and scheduling with a system such as QuickHR, ensuring that all employees would have been paid promptly, fairly and in the most cost-effective way. As exemplified by Urban Outfitters, having an analytics-driven HR scheduling module such as QuickHR is of utmost importance for companies for staffing and manning issues.

The Takeaway

When looking through the case studies above, one thing is certain. No matter the size of your company, an error in HR processes will be a costly mistake. Thus, it is important that your HRMS of choice be highly secured, seamlessly interconnected and capable of providing detailed analytics. For such a system, look no further than QuickHR.

QuickHR’s state-of-the-art HRMS software caters to a vast range of the HR spectrum, from Human Asset Management, Workforce Management and Human Capital Development. With analytics provided across modules such as our Payroll Management and Scheduling & Shifts features, tracking of data and information has never been easier. Together with our other modules Leave, Claims, Applicant Tracking System, Learning & Development, QuickHR is a system that is seamlessly integrated to cater to all your HR needs. To top it all off, as an ISO 27001:2013 and ISO 9001:2015 certified system as well as being a Multi-Tiered Cloud Security Standard MTCS SS584:2015 certified system, QuickHR is undoubtedly a software of the highest security.

So with all that has been said and done, why not give QuickHR a try? With multi-faceted features and modules, rest assured that even the most tedious of HR processes will be made easy.

Once again, we hope that you’ve enjoyed a good read. And remember, Think Now, Think Far, Think QuickHR.

Enjoyed reading about the importance of a fool-proof HR system? Check out QuickHR on the list of Best Payroll Services in Singapore 2021.

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