According to research by CEB, five to six people are typically involved in most purchasing decisions within a company – including HR-focused software. Long before you sign on the dotted line, there’s one decision-maker you’re likely to need to bring into the discussion: the CFO (or controller, accountant, bookkeeper, etc.).
The CFO’s decision usually boils down to the bottom line, and while there are many advantages to HR software systems that boost the bottom line, proving the benefits using data and analytics will help put the CFO’s mind at ease. Here’s how to build a business case your CFO can’t say no to.
Before presenting to your financial stakeholder, lay out your objectives for investing in a smart HR software and how they’ll benefit your business. Sometimes there’s just one; sometimes, there are lots. Below we’ve outlined the top objectives our customers bring us.
Objective: Hire the Right People
The cost of a bad hire can be detrimental for businesses in several ways. Depending on the qualities that the new employee is lacking, the bad hire can bring safety issues, workplace culture problems and even negative impacts on recruitment and retention.
What to Say to the CFO: A strong Applicant Tracking System (ATS) pre-screens and ranks candidates using criteria that’s tailored to our business needs. By making the switch, we can expect better candidates to filter to the top, which will lead to quicker hiring, more fluid onboarding, a better work atmosphere and ultimately a more productive workplace.
Objective: Decrease Recruiting Costs
The traditional hiring process costs an average of $4,000 per position. You’ll need to calculate what your company is currently spending on recruiting processes to build an effective business case in how recruiting software can reduce the cost per hire. By using the formula below, you can calculate the cost-per-hire:
(Internal Recruiting Costs + External Recruiting Costs)/Total Number of Hires.
Internal Costs Include:
- Referral program bonus
- Recruiters’ salaries
External Costs Include:
- Job board postings
- Employer branding and advertising
- Recruitment agency fees
- Background checks and drug screens
What to Say to the CFO: We know the more job boards we post to the quicker we find a quality candidate. But with average costs ranging from $249 to $495 for a 30-day job posting on leading job boards, we’re bleeding money when we don’t find candidates quickly. Combine those costs with all the behind-the-scenes labor like background checks and referral bonuses, and it’s clear that efficiency will save us money. If we put a robust ATS into place, we can use the built-in job distribution tool to post jobs with one click, which saves money and time.
Objective: Migrate Turnover Costs
If a bad hire is disengaged or unqualified for the job, they aren’t likely to stay with you for long, whether that’s their choice or not. This formula determines how much turnover costs your business:
(Recruiting Costs + Onboarding Costs + Training Costs + Unfilled Time) x (Number of Employees) x (Annual Turnover Percentage) = Annual Cost of Turnover
What to Say to the CFO: Our turnover has a real price tag. If we deploy a proven HR software, we can reduce costs by streamlining job distribution, applicant analysis and even employee happiness and engagement. By approaching our hiring from a data-friendly perspective, we increase the odds of landing long-term, high-performing employees.
Objective: Eliminate Injury Costs
Injuries are expensive, and in safety-focused industries like construction, manufacturing and health care, billions of dollars of fines can be levied against businesses when standards aren’t met. According to OSHA, American companies pay nearly $1 billion per week for direct workers’ compensation claims to cover medical and disability expenses.
What to Say to the CFO: Any injury or accident that could have been prevented is a failing on our end. We need an HR software built to meet the compliance standards we work under, and that includes both hiring the most qualified applicants and staying up to date on safety trainings like OSHA and other professional development requirements. We want safe workers and work conditions, and we don’t want to pay for mistakes. Indirect costs, personnel turnover or lost equipment can add up to a lot of money, and under-qualified workers amplify the risk.
Objective: Futureproof Your Business
When an unexpected resignation, retirement or firing happens, companies often have to scramble to get jobs done. Instead of giving into the pressure of quickly finding, training and getting to know a new employee ASAP, companies that embrace succession planning through their smart HR software can simply follow Plan B as the vacant position gets filled.
What to Say to the CFO: When a team member leaves us, we are always scrambling to hold onto customers while we deal with the disruption on our team because we don’t have solid succession plans in place. Customer retention is a critical part of our strategy, and we need to make sure our continuity plan can flex when it needs to. Without our customers, there’s no cash flow and no growth, and our customers are in jeopardy when we can’t deliver our services without disruption.
Bringing the CFO into the discussion is essential when purchasing HR software. Think about your CFO’s biggest pain points, and tailor the message in a way that addresses those challenges. When you can talk about how HR software can meet the company’s needs while saving money, the CFO will be more open to receiving information. See the BirdDogHR software in action with a free demo.