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5 Human Capital Management (HCM) Software Problems (And Solutions)

Contributor: David Ma, Implementation Specialist

April 21st, 2023 | 6 min. read

By Tony Calavitta

5 Human Capital Management (HCM) Software Problems (And Solutions)

As technology continues to advance, the incorporation of software solutions into business operations has become increasingly widespread.

But, as anyone who has experienced a computer crash knows, technology is not without its faults. In fact, 48% of businesses relying on technology report experiencing related difficulties.

If you are considering integrating a business software solution, the potential problems you may experience should factor into your decision.

Here at Combined, our team has helped countless employers, just like you, navigate the stresses of switching to (or between) software. We want to help you find the right technology solution for your business.

In this article, we will discuss common challenges businesses face when configuring Human Capital Management (HCM) technology to support their operations. By reading you will learn the top 5 problems with HCM software and how to effectively solve them.

What is Human Capital Management (HCM) software?

Before diving into these problems and solutions, it’s important to understand what Human Capital Management (HCM) software is.

Human Capital Management (HCM) is the practice of improving business operations by investing into the value of employees, with a focus on training, advancement, engagement, and overall performance – And, Human Capital Management (HCM) software is the technology platform that allows businesses to create a data-driven approach to this practice.

To gain a clear understanding of HCM software, let's break it down into the key defining terms associated with it:

  • Human Capital – The skills, knowledge, and qualifications of a person, group, or workforce considered as economic assets
  • Management – The process of overseeing and directing business operations
  • Software – The computer programs, data, and instructions used by organizations to perform specific tasks

Human Capital Management (HCM) software, then, refers to the actual computer programs, data, and instructions that businesses use in the process of overseeing and directing the growth and development of workforce skills, knowledge, and qualifications.

It is a comprehensive all-in-one system that consolidates critical HR functions including recruitment, onboarding, training, performance management, payroll, benefits administration, and compliance regulation into a single user-friendly interface. With this HR information compiled in one centralized location, a company can easily review, refine, and regulate its employee life cycle.

Why use Human Capital Management (HCM) software?

Using HCM software has not only been proven to enhance employment but also to increase business productivity. According to Harvard Business Review, when HCM software is used effectively, it contributes to improvement in all of the following areas:

  • Leadership Practices
  • Employee Engagement
  • Workforce Optimization
  • Information Accessibility
  • Learning Capacity

But, in order to get these results, you have to properly adapt and effectively use HCM software to support your business operations.

Let’s discuss the challenges businesses experience when using an all-in-one HCM system – And, how you can overcome them.

5 common Human Capital Management (HCM) software problems (and solutions)

Here are the 5 most common problems with Human Capital Management (HCM) software (And ways you can avoid each of them).

Problem #1: Involved implementation process

Because an HCM system has a wide range of functions, the process of setting up HCM software to meet the needs of your business can be complicated. Implementation refers to this involved process.

These 5 procedural steps are critical to successful implementation:

  • Determining the specific functionality requirements
  • Formatting the software rules with company information
  • Integrating the software with the current business interface
  • Migrating all relevant employee data into the new software system
  • Guiding comprehensive user training for effective adoption of the new system

As interconnected steps, a single error at any stage of implementation can affect the overall function of an HCM system.

Let’s say a required system function is overlooked – That function won’t be set up in the software rules, which means it won’t be properly integrated, leading to potential data omission and, ultimately, a lack of practical application.

This highlights a common problem businesses face with HCM software – the domino effect, that any implementation oversight can have on the operability of an HCM system, which can not only lead to further complications but can also be costly to correct.

This problem can be mediated by:

  • Employing an HCM provider with a skilled and reputable implementation team
  • Planning for and investing a sufficient amount of time into the implementation process

With the right implementation team and timeline, you can make sure that your HCM software successfully serves the needs of your business from the get-go and avoid spending additional time and resources to resolve unnecessary implementation setbacks.

Problem #2: Multiple system integration complications

While HCM software is an all-in-one platform, some businesses prefer to integrate it to work alongside other active software systems.

For Example:

If a business wants to better regulate its timekeeping and payroll using an HCM system but is more than satisfied with its existing benefits administration software, merging the two systems’ functions may seem like an ideal option.

Can this be done? Yes.

Can this be challenging? Also, yes.

Another common problem businesses experience with HCM software is difficulty integrating multiple systems.

Here are a few of these multiple system integration complications:

  • Incompatibility – New HCM software may not be compatible with other software systems, requiring custom software development for integration

  • Inaccurate data transfer – Because software systems structure data differently, merging data between an active system and a new HCM system can result in transfer errors and duplicate data entry

  • Data security risks – Software systems may operate under different security protocols, creating security gaps during data migration and leaving sensitive information vulnerable

Multiple system integration problems can be solved by working with an experienced HCM provider with knowledge of software compatibility and configuration. Your HCM provider should be able to develop a clear and deliverable integration plan that aligns with your company’s integration goals.

Problem #3: Inadequate technical training

Developing technical skills, with regard to any aptitude, requires training.

Take riding a bike, for example – Could you strap on a helmet, mount a 10-speed for the first time, and pedal your way to Tour De France victory? No, probably not. Instead, you’d start to learn how to cycle with training wheels intact.

Receiving technical training on how to use a new HCM system is the equivalent of learning to ride a bike with training wheels. And the consequences of not receiving this education, like the effects of a bicycle crash, can be debilitating to business operations.

The inability to effectively operate a new HCM system due to inadequate technical training, however, is among the most common problems businesses experience with HCM software.

You can resolve this problem by partnering with an HCM provider that offers both extensive system training and guidance through the early stages of application.

During this training period, your implementation team should coach you on the ins and outs of your new software and tailor their instruction to your preferred method. This can include in-person demonstrations, educational courses, virtual lessons, etc., all of which should collectively amount to a step-by-step walkthrough of your HCM system and give you the confidence you need to begin operating it on your own. But, during this initial phase of independently managing your new HCM system, your implementation team should supervise and be able to assist if any major issues arise.

Problem #4: Insufficient customer support

Despite training and the development of advanced technical skills, day-to-day operation hiccups can still happen.

After all, even a master cyclist gets an unforeseen flat tire now and then – And, if and when they do, they need to have the resources to fix it.

When it comes to using an HCM system, the customer support you receive in response to everyday operational challenges acts as these necessary resources. And, whether it be as minor a task as managing the protocol for a sudden termination or as large as updating the system to accommodate new work locations, having easy access to customer support is invaluable.

Yet, in the face of unexpected challenges, many businesses cite a lack of available customer support as a common problem they experienced with the application of HCM software.

By partnering with an HCM provider that supplies a responsive direct line of contact for customer support, you can avoid this problem.

Problem #5: Underutilized functions

Recall that an all-in-one HCM system has a wide range of functions. While it can be integrated to only perform payroll functions, it can also simplify other HR responsibilities including recruitment, onboarding, development, performance management, benefits administration, compliance regulation, and more.

Often though, businesses are not aware of all the ways HCM software can serve their needs. As a result, otherwise beneficial functions are left unapplied.

With favorable functions at your fingertips, why not fully use them to optimize your business?

You can solve this problem by working with an HCM provider that not only thoroughly informs you on how your business can optimize the utility of HCM software but also keeps you up to speed with add-ons so that you make the most of your HCM platform.

Next steps to a problem-free experience with HCM software

If you are here, you may be looking to integrate an all-in-one HCM system to support your business operations. We are here to help you do just that – And, to help you do it without experiencing the most common problems businesses face with HCM software.

Here at Combined, our HR team has years of experience assisting employers with the stresses of switching to (or between) software. We want to help you find the right technology solution for your business.

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Is all-in-one HCM technology the right solution for you?

Schedule an appointment with an HR specialist to find out. 

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This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.