Amanda Kalcic has assisted three large contractors in the last 18 months with HRIS selections. The trend of companies seeking to implement a full-scale HR solution continues to build in the market and is a fast-growing segment for BCG. So, what’s causing this shift? Firstly, some may feel that the recent impact of COVID has driven the market in this direction. While this is certainly influencing the timeline for adopting an HR solution, it is safe to say this trend has been on the rise long before COVID. Mostly due to the severe labor shortage that has long impacted the construction industry and the increased competition for qualified personnel, contractors have been focused on hiring, developing and keeping their personnel. Contractors have also noticed the limitations of their ERP’s Human Resources application (or module) for some time. Meanwhile, developers have been building Construction-specific HR solutions (e.g. BirdDog and Vibe), AND larger, more generic HR solutions (e.g. WorkDay, SuccessFactors) have taken an interest in Construction and have been tuning their solutions accordingly.
Construction companies are now far more focused on automating the recruiting and on-boarding function, performance reviews, training administration, benefits administration, PTO tracking and providing a self-service portal for their employees. Much of this was lower on the priority list five to ten years ago. Contractors have also upped their game when it comes to HR personnel. It is no longer a part-time payroll person’s job. Contractors have been hiring dedicated HR personnel and giving them far more responsibility than before.
Employees’ expectations have also shifted. Most employees are more tech-savvy now and expect to sign into a secure portal to conduct their own business in regards to PTO balances, days off, benefits, 401K balances, W-2s and check stubs. This frees up your HR personnel for far more valuable activities like recruiting, development and training.
One of the interesting questions on most HR selections is whether or not to move the payroll function into the HR suite. Some HR solutions (like Utilipro) require the use of their Payroll application within the HR suite. While this could make sense on the surface, most contractors resist having all employees managed in a single solution; and we agree! Construction payroll is very complex and highly dependent on job parameters that are based in Job Cost. Certified Payrolls, Union reciprocity, workers comp accrual and job location all influence payroll. Having the payroll in a detached system is not proving to work well yet. Rather, BCG helps companies do a light integration between their ERP Payroll application, their timekeeping program and a new HR solution.
What Amanda has found interesting in this area is that many HR departments are more ambitious in terms of what they are looking for in HR solutions than the organization itself. Amanda says that “most HR departments have the right vision but are sometimes not realistic around commitment from the rest of the organization.” Many top tier HR solutions expect users to use the platform for more than just PTO administration. The top tier solutions expect users to have basic functionality in their software development plans with the ability to keep record of training requirements and completed training, to conduct performance reviews and to complete requisitions for new personnel. Then the focus can be to build on the basic functionality and to expand to leveraging HR technology for career management, learning and skill development and employee engagement.
But in construction, many companies are just not there yet. A new HR solution should be scaled with the organization’s level of ambition taken into consideration. A clear short-term and long-term HR strategy and implementation plan will be key when selecting and implementing an HR solution.