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Think HCM Can't Work for Construction Companies? Think Again!

Posted by Kit Dickinson on Dec 20, 2018 9:05:00 AM
Kit Dickinson
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There's a myth going around the construction industry. Many contractors are operating under the belief that if you want to outsource your payroll, time and HR, you're out of luck. You won't be able to find an HCM system that can meet the complex needs of construction companies.

That myth was founded in truth at one time. HCM systems were incapable of providing the depth of customization that construction companies needed. But technologies have changed and HCMs are much better equipped to handle some of the unique needs of construction companies.

HCM systems have evolved. Combined with IDI's advanced integration software, they can match all of the complexities of construction payroll. Let's look at the top myths about HCM systems and see how HCMs can meet construction needs today.

HCM Systems Can't Track Time for Us

For most industries, it's enough to track time to specific jobs. But in construction, you need two, three, even four or five levels of tracking. You need to track the state you're working in, the contract number, then the job and perhaps a task or work order.

In the past, time and payroll systems were designed for a pretty basic level of job tracking and they just weren't up to the task. That has changed. Today, most time systems are capable of supporting up to seven levels of tracking.

Similarly, we often hear the objection that HCM systems rely on time clocks, which doesn't make sense for workers in the field. This was also true at one time, but HCM systems can easily support mobile time collection, which is a great fit for field-based industries.

Related content: The HCM System Buying Guide for Contractor Companies

Running Payroll Is Too Complex

Contractors have added payroll complexities when government contracts and unions are in the mix. To get the person's correct rate of pay—whether it's for private, public or union work—is often a complex task. There are multiple variables to deal with as you calculate prevailing wage rates and fringe benefits. Many construction companies don't trust HCM systems to handle those kinds of complexities

It's true that HCM payroll systems can't do that on their own, but IDI's integration software fills in the gap seamlessly. IDI takes away all the pain of prevailing wages, union rules and fringe rates. Our software automates wage calculations and simplifies the reporting—all at the push of a button. There's no need for manual calculations or clunky workarounds. In fact, you can expect to save 8-12 hours per week with IDI.

HCMs Can't Integrate with Our ERP

You depend on having the proper level of integration back to your ERP system, and you don't see how any HCM system can supply that kind of information. You need all of the costs to the job—not just the payroll costs, but also the benefit burden non-payroll costs, such as medical, dental and 401k.

A lot of HCM systems are very good at supplying general ledger information, but not the full spectrum of data you need. That's where IDI comes in. IDI can provide a comprehensive and complete data flow back to your ERP system, which includes the general ledger and critical job cost information. With IDI, the HCM system is fully capable of meeting your ERP integration needs.

Running Certified Reports Isn't Possible

While some of the data for certified payroll reports comes from the payroll system, a lot of the other information about the contract isn't available in a payroll system. For many contractors, that would be a show-stopper. However, IDI has a certified payroll reporting module that can take the payroll data from the HCM system and merge it with non-payroll information to generate the reports automatically. 

You CAN Outsource Your Payroll

If you're interested in outsourcing payroll but have been held back in the past, the advancement of HCM technology progressed farther than you may realize. Together with IDI, an HCM system can get you to 100 percent of your payroll needs.

Read More about our Certified Payroll Reporting Solution

Topics: Construction Industry Solutions