Two Ways to Directly Boost Your HR Efficiency in Malaysia
An essential part of any organisation, the modern HR team is now responsible for more than just administrative work. On top of handling traditional roles like payroll processing and recruitment, HR teams are also expected to lead talent driven activities such as training and employee engagement.
Even the most seasoned HR departments can struggle with juggling the time-consuming administrative tasks and maintaining a high-performing workforce. Especially in an increasingly digitalised industry where human connection is diminished.
There are many solutions businesses can implement that will impact efficiency and HR excellence, perhaps the two most effectual would be the adoption of an all-in-one Human Resource Management Software (“HRMS”) and outsourcing your payroll processing to a service provider in Malaysia.
01 Outsourcing to a payroll service provider in Malaysia
Outsourcing your payroll processing to a service provider can significantly boost your team’s efficiency almost immediately. Payroll is filled with administrative burden, requires a high level of attention to detail and is realistically only a sub-function of your HR department. By outsourcing this function, you allow your teams to focus on strategic business drivers that grow your company. As with all business decisions it’s critical to evaluate the advantages against your desired outcomes. Whilst there is a wealth of benefits associated with outsourcing your payroll, the top three would have to be: specialised/localised knowledge; reduced cost/timesaving and; data security.
One of the greatest benefits associated with payroll outsourcing is having a dedicated team of professionals, with local knowledge of Malaysia’s labour laws, running this important function for you. This means your business can benefit from years of experience as well as the strict protocols and multi-level cross-checking payroll vendors are subject to. This can be of particular benefit for companies that operate in different states or multiple countries, where the labour laws can vary. Having a group of specialised regional payroll experts ensures that your company can operate safely across borders and the burden is not placed on your in-house HR teams.
Reduced Cost & Timesaving
Payroll processing can be a resource drain when not managed carefully. Calculating payroll taxes and statutory filings, like Social Security Organisation (“SOCSO”) in Malaysia, handling payroll enquiries and disbursement; whilst being simple administrative tasks can be extremely time consuming. Add to this, factors such as rapid expansion and your HR teams can be put under immense pressure which can result in an increased propensity for error and a diversion away from strategic activities that enhance business performance. Payroll outsourcing passes the time-cost saving down to the bottom line.
In addition to this significant saving, there can also be visible savings to your business from not needing to maintain payroll software, manage paperwork and tax liabilities.
A key concern in today’s highly digitalised world, HR departments are expected to adhere to local laws such as the Personal Data Protection Act 2010 (“PDPA”) in Malaysia. Payroll and employee personnel details are incredibly sensitive information that HR handles on a regular basis.
A good understanding of the personal data life cycle management process will enable proper protocols that comply with local laws. This can be especially complicated to implement for multi-national companies. Having an experienced regional payroll outsourcing vendor can help mitigate risk for your in-house HR team.
Another concern is the back-up of data; if there are any lapses in security or a hardware malfunction, this can paralyse key business functions. Most reliable payroll outsourcing service providers store their data on highly secure cloud-based servers. Backed up across multiple server locations, the servers are usually protected by high-end encryptions. All of which is managed by the outsourced vendor, taking away compliance risks and mitigating time costs.
02 Investing in an integrated Human Resource Management System (“HRMS”)
Another option, if you wish to keep payroll processing in-house is to adopt an all-in-one HRMS to mitigate administrative burden for your in-house teams.
Below are some of the benefits associated with the implementation of a well-integrated HRMS.
By having an integrated HRMS system in place, HR teams can automate a large portion of the payroll workflow from calculating salaries, claims, deductions and leave.
However, selecting the right HR and payroll system is critical to success. For you to achieve the greatest benefits the system should include key modules like Leave, Claims, Time and Attendance, Personnel and Payroll.
An integrated system will also have added benefits like increasing data accuracy of pay runs through the automation of several payroll processes. For example, statutory payment requirements in Malaysia are automated within the HRMS. The system calculates all mandatory payments or tax deductions such as Employee Provident Fund (EPF), Zakat and Employment Insurance Scheme (EIS), which not only alleviates administrative burden it mitigates the risks of human error.
Eliminate Human Errors
When you use an all-in-one system, your risk of human error is significantly reduced. Much of the manual work is automated, from data entry to calculations. You can also ensure that there’s no important data missing and ensure uniformity by setting mandatory or restricted fields within the system.
Possibly the greatest benefit of an interconnected and automated HRMS is the decreased risk of important payroll calculations such as hours worked or tax deductions. This not only saves time but also ensures accurate disbursements to your staff every time.
HRMS simplifies employee service
A vital function of HR is employee servicing. The number of administrative tasks can be overwhelming for an in-house HR team especially those from larger businesses.
Self-service functions empower both the HR team and employees: staff can obtain basic payroll information such as payslips or leave balances without having to add to the HR team’s workload. Employee’s feel empowered as they’re able to access the information they need when they need it.
Reputable providers will also offer a mobile application, so employees have the convenience of accessing all their HR information as their fingertips, anytime, anywhere.
Key to success
Ultimately, there are many solutions available to boost the efficiency of your HR team. In Malaysia, the two most common and effective are outsourcing payroll and adopting an integrated cloud based HRMS.
As with all change, success is dependent on your change management process. In the current Malaysian climate where people are worried for their jobs, it’s important that your change management processes are robust, and all designed with employee welfare in mind.
Efficiency does not always mean downsizing staff, instead, existing resources can be redirected to other roles such as data analysis, facilitation of outsourcing or integration.
What solution works best for your organisation will depend mostly on your current processes and the needs of the company, but it is always best practice to regularly monitor and review HR processes.
Interested to find out more about increasing the efficiency of your HR team in Malaysia? Speak to our payroll experts today.
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