October 31, 2008, Newsletter Issue #77: HR Functional Business Areas

Tip of the Week

Automation of HR activities over the past two decades has broadened the role that HR executives and other professionals play in the modern business organization. As the transition from bulky, dedicated mainframe systems to server-based systems has grown, so too has the division of responsibility from the typical HR Department to the Accounting Department. Business intelligence and other organic corporate automation techniques have further accelerated this transition.

Automation, including BI techniques, is best thought of as vast compilations of "best practices," brought to bear in one single or small set of related systems. However, since the discipline has grown from the experiences learned in the older, more manual implementations, we find that the structure of such systems follows a relative traditional architecture. Best practices in HR and HR Reporting follows four simple functional areas:

Time and Resource Management This area involves the techniques, practices, and devices used to collect and evaluate employee time and resource application information. The complexity of business has increased and the underlying technologies available for time management have matured to where the role of the time clock and the supervisory staff has been automated. This has opened the door for fast, broad compilation of employee cost information for extensive use across the organization.

Payroll Once time and resource information is collected, the preparation and reporting of pay-related activities commences. This oft repetitive and mechanical tasking has become more complex due to expansion of tax policy, labor relations practices, and ancillary labor/benefit programs. Significant links with the accounting function area are a necessary adjunct of this function.

Benefit Administration This once secondary function has grown to primacy as the importance of health care/insurance, retirement plans, and other benefit programs has increased. Costs related to these and other benefit areas have put extensive focus on administration of these efforts and the policy issues related to them.

HR Management This area covers the balance of tasks performed in the HR field, including hiring/firing, regulatory reporting compliance, and everyday management chores, to name a few. Automation techniques have flourished in this functional area.

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