9(!) reasons why you shouldn’t build your in house HR system
High-tech companies sometimes face the temptation to not use an external, cloud-based tool, but to build their own tool, developed in the way it should be and tailored to every need. It is a much worse idea than one would expect at first glance.
HR management, including time tracking and leave management, is a big deal for companies, no matter how big or small they are. According to the DMEC study, only a minority of companies can afford to not have a dedicated person to manage the leaves in a compliant and reliable way. The bigger the company, the more people are required to do all the paperwork, with more than one-third of the largest ones (employing over 20,000 people) having a separate department with a headcount of 10 employees or more.
Yet companies that use and create products of a sophisticated technology also face multiple challenges when managing the leaves, including the need to ensure the skill supply while providing the engineers or specialists with vacations they need. Oftentimes, it is also frustrating for these companies to see that the HR system they are using lacks a certain feature or has something that could be easily improved.
That’s why some companies face the temptation to build an HR management system from scratch. And it is a very bad idea.
Why you shouldn’t build your own HR system
The idea is appealing at first glance, especially for a tech company like a dev shop or tech consultancy. There are skills on board, there is a will to build great products, and the tech knowledge required to do so. What can go wrong?
Actually – everything.
Building a software product – and that’s basically what an HR management system is, is a big deal, requiring a great domain knowledge and a clear understanding of challenges faced not only by one of the elements but the whole system. Even if a particular feature appears to be a no-brainer. It is usually only the tip of an iceberg when it comes to working required to deliver id.
But what are particular reasons why building an in-house HR management system is such a bad idea?
It is extremely expensive
A skilled software engineer can usually visualize code in his or her mind with little to no hassle. Also, it is usually fairly easy to outthink the encountered bug or a clumsily-implemented feature.
But building the HR software from scratch is a large-scale project, one that a client would have been billed for hundreds of thousands of dollars. It requires not only to design the solution but also to code it in a language of choice. It should also be implemented on multiple platforms, bringing mobile and web development to play, as well as the need to join the front end (web, mobile, or any other) with the back end (usually written in another technology).
The system also needs to be implemented either on-prem (with engineering knowledge required and money to buy it) or in-cloud (same here, yet with different skill sets and cost allocation).
Considering that, if one is willing to build an in-house HR system, it is worth considering a google sheet rather than a full-scale programming project. And an online HR spreadsheet is a bad idea for a myriad of other reasons – but it is here to use and much faster to build.
You have better projects to allocate your engineers (or resources)
Engineers can either work on the core product you earn money on, or on a side-project, you will not earn on. Considering that, launching an enormous side-project of building an internal HR tool is a short way to the development hell, with engineers jumping in and out, deadlines missed and costs sunk.
Also, the long-term development makes the software aged at the time of delivery. With low priority.
After an initial stage of enthusiasm, the project will be developed by interns at best. Honestly – would you use intern-only developed software?
It will not be tested enough
Testing is yet another costly step of software development that increases the time-to-market. On the other hand, though, an internal tool will be used by significantly fewer users than a commercially available system is. So is it necessary to test it at all?
Apparently – yes. First of all, there are multiple ways to abuse the system for personal gains – from unlimited paid time off to canceling a past time off to get new days. Users can either tune up their working hours or tune down their tardiness.
Apart from a dedicated and skilled Quality Assurance team, Calamari has thousands users worldwide, tracking up to 2 milion hours monthly. With millions of eyes watching, there is no bug unspotted. How many eyes can you make look in a bug-spotting process?
A tech-savvy IT company is full of software tinkerers eager to bounty-hunt for bugs and holes. Most of them will report found ones, but all users will end with frustration. And the frustration caused by a malfunctioning or missing feature was a primary reason to develop an in-house solution.
HR information is highly vulnerable
The lack of testing and low access to skilled engineers will result in the low security of the system. While there are significantly less secure solutions (like an online spreadsheet), the consequences of a data breach can be disastrous.
Apart from GDPR fines counted in millions of euros, companies face a killing blow to their reputation and market trust. Finally, the HR data breach can be dangerous for employees – as the story of the breach from CD Projekt Red clearly shows, the data can be used for multiple malicious goals, with credit fraud being the top-of-mind reason.
And that comes with deadly damage for employer branding.
YOU will be disappointed
The sum of the need for additional management of employees, the shrinkage of resources, and the overall quality of the side-project can be deeply disappointing. The project will end with being constantly underdeveloped (face it – your most talented coders will work on client projects), consuming resources (there is SOMETHING required to be used while the solution is in the development process, so there will be costs), and never-ready.
This will not only be costly but also deeply frustrating. Probably there will be jokes about the project in little to no time. Employees will hate this project as a dull and boring one. And finally – there will be little to no sign of the savings or advantages that have been projected at the start.
You will face multiple challenges you didn’t think about (because you didn’t notice them)
A missing feature of the product is a common motivation to build a new one. But it is easy to overlook the quality of the whole solution while looking at the missing feature only.
Usually, the rest of the software is a job well done that is delivering the expected results. But being “well done” means not “easy to do''. When it comes to Calamari, there are 1 milion lines of code that are a result of 7 years of work. The software works as it is expected due to the enormous work put in it, countless tests, and numerous bugs killed.
The ROI will leave you devastated
A painful one – a constantly underdeveloped and company-wide loathed project will have little to no ROI. Assuming an investment with ROI like that, would you be insane enough to put your money in it?
Doubtfully. And yet – you do so by building in-house HR software.
There will be no purpose for it
What exactly is a “purpose”? When it comes to business, it is either saving money or bringing money. Assuming your company will not sell the system (nothing easy to do, trust us), it will be a lot of work put in limbo.
The system will require to be further developed and improved, so it will consume more and more resources and man-hours. It will be either a never-finished side project or a perfect, top-class software used only by a handful of people working for your company.
So in fact, it is a sunken cost with no real purpose.
Face it – you don’t need it
Last but not least – what is the real reason to develop an internal HR management system? A missing feature? But is it worth it? Something else – but what?
A cost-saving? Considering the list above, is the cost of an online time and attendance tracking tool so high, compared to hundreds of hours worked by committed and skilled engineers? Making your HR staff happier with the solution they use? But what is the particular, named problem to solve?
So what to do?
There are basically two reasons why companies choose to develop an internal HR system.
- Reason 1: there are features missing
- Reason 2: the software is not working properly
In Calamari, we are committed to making the best HR software available. Thus, the best way to mitigate the reasons mentioned above is to switch to Calamari – we have a rich library of features and integrations to use, with hundreds of customers worldwide.
We recently gave the interview to the WebsitePlanet - the place where you can find info about building and marketing a website. It tells about the history of our HR management software, the impact of Covid-19 pandemic, and our plans for the future. Check it out if you want to find out how it is to run a company like ours.
And if you already are a Calamari user – contact our support. As a startup, we have a team small enough to be real people, actively listening and understanding your needs and feedback.
If you wish to talk more about the features of a perfect HR system for your company, don’t hesitate to contact us now! We will be happy to prove to you that Calamari is the best pick possible!
Today, HRoes hosts TRAFFIT – a company developing the ATS software, which supports recruiters in acquiring the best specialists.
We've asked Anna Sykut – Chief Evangelist of TRAFFIT – to talk about optimizing the recruitment process in hiring the best specialists. Anna has been helping recruiters to improve the recruitment process for four years. She uses the experience gained during economic studies and closely observes the labor market and the latest HR trends in her daily work.
Time and attendance tracking is usually shown as beneficial both for the employee and the employer, with the former being fairly waged and the latter having clear information about performance and productivity, not to mention both parties being protected from abuse. Yet there is another, even more, important reason to track time – compliance.