Unveiling the Risks of Purchasing International HR Systems

08 Jan 24

In the pursuit of an ideal HR management system, organisations often find themselves at a crossroads, weighing the merits of international systems against locally developed solutions.  In our exploration of this critical decision-making process, we’ve uncovered the hidden challenges associated with international systems in the South African corporate landscape, against the benefits of the proudly South African-developed HR Manage.

The international stage is replete with HR systems boasting prestigious features, drawing organisations in with promises of global applicability.  Yet, the implementation journey can be fraught with challenges, as exemplified by the experiences of many South African businesses.

 

Challenges with Implementation

Surviving the initial implementation of one of the more “prestige” international HR systems is a miracle in itself.  However, the story doesn’t end there.  South African businesses often grapple with the stark reality that these systems are not inherently tailored to meet local legislative requirements.  Reports vital for compliance, such as Employment Equity (EE) and Skills Development (SETA) reports, become labour-intensive and time-consuming.  The testimony of industry insiders echoes the sentiment that successful implementations within the South African context are few and far between.

As organisations strive for a unified HR management approach, the lack of integration among modules becomes a significant stumbling block.  To bridge the communication gap, additional integration efforts are often required.  This not only incurs extra costs but can also lead to prolonged implementation timelines and increased complexity in system maintenance.

 

Exchange Rate Volatility: A Budgeting Nightmare

The seductive allure of seemingly competitive license fees offered by international systems often conceals a lurking budgeting nightmare.  Exchange rate fluctuations can wreak havoc on the stability of monthly or annual license fees, leaving organisations grappling with unpredictable financial forecasts.  For South African businesses, this volatility adds an extra layer of complexity, making it challenging to establish fixed budgets and financial plans.

 

Legal and Compliance Pitfalls

One of the primary risks associated with international HR systems lies in the potential legal and compliance pitfalls.  These systems are often developed with a global audience in mind, and nuances of local regulations may not be adequately addressed.  This oversight can lead to issues related to Employment Equity (EE), Skills Development (SETA), and other South African legislative requirements.  Non-compliance not only poses legal challenges but can also result in financial penalties and damage to the organisation’s reputation.

 

Cross-Cultural Integration Challenges

The global nature of international HR systems introduces complexities related to cross-cultural integration.  These systems may not seamlessly align with the cultural nuances, languages, and work practices prevalent in the South African corporate landscape.  Misalignment in communication styles, organisational hierarchies and employee expectations can hinder the effective integration of the HR system, potentially leading to resistance and a lack of user adoption.

 

Data Privacy and Security Concerns

International systems often store sensitive employee data in servers located outside South Africa.  This raises concerns about data privacy and security, especially in the context of local regulations such as the Protection of Personal Information Act (POPIA).  Compliance with these regulations becomes a critical consideration, and failure to do so can result in legal consequences and reputational damage.

 

Limited Customisation for Local Needs

Another risk associated with international HR systems is their limited customisation for local needs.  South African businesses may find it challenging to tailor the system to meet specific organisational requirements, resulting in a one-size-fits-all approach that doesn’t resonate with the unique dynamics of the local workforce.

 

Contractor Management Limitations

Contractors not formally on the payroll may face limitations within international HR systems.  Tracking their performance, managing training programs and ensuring compliance with relevant regulations can become cumbersome or may not be adequately addressed by these systems.  This lack of inclusivity can hinder the seamless integration of contractors into the organizational framework.

 

Further Reading

Also have a look at our previous article, Unraveling the true cost of HR Systems.

See what we’re offering

HR Manage is a fully fledged Human Resource software system that has been on the market for over 20 years.  See some of our  other modules below and why some of the leading companies in South Africa has been sticking with us for over a decade.

HR System Overview

See an overview of the HR Manage software and the modules available in our complete HR Solution.
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People Management

Manage biographic and occupation information for employees and contractors.  This is a core module where all other modules retrieve information from.
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Training Administration

Schedule, track and manage training within your company or training college. Includes Bursary management, cost tracking and printing of custom designed certificates.
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Reporting & Exporting

Generate standard complex reports like Employment Equity and SETA, or build custom reports using one of our advanced report designers.
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Electronic Job Profiling

Build a library of Job Profiles that can be linked to people and used in reviews. Job Profiling can also be done in bulk using our unique Job Profiling Matrix.
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Performance Management

Conduct reviews online based on generic or customised job profiles. The processes, scoring methodology, rating sets and all other aspects are customisable to suit almost any requirement.
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Leave Administration

Comprehensive leave management with online applications and approvals, reporting and custom workflows for each type of leave. System allows for complex rules to be configured.
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HR Workflows

Build custom workflows and forms for business processes such as employee on-boarding or staff movement. With various flexible types of activities (and more being added regularly), the system is as flexible as it gets.
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