The False Economy of Spreadsheets in HR

Many organisations, regardless of size, are still relying on data sources outside of their core HR Management System (HRMS) to make strategic workforce decisions. 

In fact, according to a Ventana Research report* on next generation workforce management, 92% of participants reported using spreadsheets in some degree to manage their core workforce management information.

For growing small to medium size enterprises (SMEs), many will have no HRMS whatsoever and rely entirely on paper and spreadsheet-based systems (such as Excel, Numbers and Google Sheets). This becomes the default option for managing and processing key workforce data from the most basic items like employee demographics, organisational data, through to HR operational business processes, workforce compliance, talent management, staff acquisition and retention, etc.

For many SMEs, (and start-ups) focus is on aggressive business growth. We often find that platforms to manage the workforce take a back seat in terms of operational priorities, but why is that? 

The Challenge of Rapid Growth

SMEs and start-ups will often have a better net promoter score as an employer when compared to their larger counterparts. This might be directly attributed to their size and the inherent close personal engagement between management and staff in a dynamic work environment.  This this can quickly change. As the organisation grows so too do management layers and complexity. Investing in a HRMS platform early can help protect that relationship between employee and employer.

With an expanding and diversifying workforce having a HRMS in place can lead to significant competitive advantage when you think about sourcing and acquiring the right talent for your business, engaging and retaining your best people, staying compliant and getting rid of those paper and Excel documents that are prone to inaccuracy and risk. 

The False Economy

The Ventana Research report highlights this risk. In 61% of instances where spreadsheets were being used for performance management, participants encountered errors in those spreadsheets. Imagine the damage that could have on an organisation with impacts around employee engagement, pay for performance decisions, succession and workforce growth planning. All these items can ultimately influence and increase labour costs that will hit profit margins.

Another interesting point from the research is that the top two reasons organisations fail to deal with governance, risk and compliance issues are high costs and lack of resources. The gains associated with familiarity and perceived ease of use of common tools are quickly outweighed by the cost of errors – a typical trait of any manual process.

Moving beyond spreadsheets

Implementing a HRMS is often seen as too expensive, too difficult, too disruptive and too time consuming.

Ironically, an organisation that realises the value of a HRMS and then starts the journey of evaluating the solutions available in the market today can easily spend more time reviewing and considering options than it would take to implement a system! There are a vast range of vendor solutions in the market today, starting from the very basic single point solution, to the fully integrated "hire to retire" enterprise suites which are commonly considered out of reach for most SMEs. But that’s no longer the case. In fact, models are now available now that would give you a top-tier solution, ready in 2-4 weeks with no setup costs.

If spreadsheets are still a part of your HR processes, you’ve got a terrific opportunity to increase your efficiency, accuracy, and ability to deliver strategic value back to your organisation.

> Read more about the impact of technology in HR

* Ventana Research: Why a Core HR System Is Mission-Critical. Better HR Information Improves Business Decisions (2013)