Question

Please help with the question in bold using the information presented, Thanks. No cost data is given, one is to be made up.

Your organization is contemplating the purchase of a new human resource information system and has tasked you with formulating a proposal. Organizational details for you to consider for this assignment are as follows: 

There are a total of 500 employees at the site; 450 non-exempt employees who clock in and out each day, and 50 exempt employees who do not use a time clock and are paid a standard weekly salary. 

The organization has an electronic time capture and payroll system already in place that:

- is manually updated when employees are hired or terminate employment

-is a stand-alone application, not interacting with any other database system

- is maintained by two full-time payroll administrators, reporting to one payroll manager 

Human resource records are primarily paper-based.;

- Employee personnel files are maintained in file folders

- Personnel files are manually updated with demographic, performance, and disciplinary information

- Demographic data is available currently in an Excel database, which is manually updated

- Personnel files are maintained by four full-time human resource clerks, who are non-exempt and report to the full-time HR manager.

The new HRIS system is expected to drive a self-service approach to records management, while also ensuring confidential and proprietary data is secure.

Questions;

headcount increase to recruit new skill sets, as compared to cost reductions, e.g., employee headcount reductions due to automated data collection, job eliminations, cost savings due to elimination of legacy systems

o Return on investment (ROI) calculated over a four-year period

Answer 1

Background

Paint point:

• Time taking process to compile for pay roll - Stand alone system for clocking, pay roll & personnel files
• 8 personnel to handle clocking, pay roll & personnel files
• Degree of Confidentiality of personnel file is less
• Exempt employess manual clocking - Data authenticity not sure

Impact:

• Error in pay roll
• Misuse of employees personnel data
• Data missing

Proposed solution

• Purchase of new HRIS (Human Resource Information System)
  • All electronic clocking for both exempt & non-exempt to avoid errors
  • Interface between new recruitment/resigned/retired, clocking, payroll & personnel data
  • No manual error
  • Can eliminate fatigue failure
  • High degree of data confidentiality

Requirement to complete the project

Technical specification:

• Should accommodate 3 times the current head count considering future expansion
• Once new recruitment/resigned/retirement happens, clocking, payroll & personnel file should get updated accordingly
• Interface between clocking, pay roll & personnel file
• Leave request link with payroll

The HRIS implementation will help in less man power requirement for above mentioned activities and hence utilizing the same man power for some other value adding roles

Analysis

Organization employee details

Non-Exempt employees	Exempt employees	Total
450	50	500
Electronic clocking	Manual clocking

Manpower for payroll management

Role	Head count	Responsible for
Pay roll administrators	2	Electronic time capture & pay roll
Pay roll manager	1
Clerks	4	Personnel files
HR Manager	1

Totally 8 manpower to manage 500 employees.

Ratio: 8:500 = 1:62.5

i.e. for every ~63 employees 1 manpower required to handle & control.

In case of increase in recruitment, for eg. more than 63 new employees additional 1 more man power is required in HR.

Execution plan

Time line	WK01	WK02	WK03	WK04	WK05	WK06
Activities	Discussion & finalization of requirement with supplier – mutual agreement on cost, time line & quality	Compiling all required data	Pilot batch trial with 50 employees	Complete data update for all employess	Roll out & implementation	Monitoring the working of system and closed the contract
Required personnel	HR manager, payroll manager, project manager & supplier	Pay roll administrator – 1 Clerk - 1	Project manager & supplier	Project manager & supplier	Entire team	Supplier & project manager

Once supplier support will always be there during trial period to avoid unknown disturbance in the process.

Benefits

Role	Head count	Average salary / month, in USD	Total, in USD	Responsible for
Pay roll administrators	2	3500	7000	Electronic time capture & pay roll
Pay roll manager	1	7500	7500
Clerks	4	2000	8000	Personnel files
HR Manager	1	7800	7800
Total			30300

Per month salary for payroll, clocking & personnel file maintenance – 30300 USD

Considering xxxx USD cost involved in purchasing HRIS.

Return on investment, ROI = (Investement – cost involved in HR activities)/Investement * 100

ROI = [(XXXX /12) – (~30300)] * 100