Futureproof your Business by Investing in HR Software with Proven ROI
The cost of doing business is currently high. Businesses face rising supply, labor and other costs impacted by high inflation. In April 2024, the Consumer Price Index was 3.5%, 0.4% higher than the previous month, according to the US Bureau of Labor Statistics. This nudge in the wrong direction means costs will continue to remain high for the foreseeable future. Businesses need to quickly find a way to work smarter. Technology can automate processes, saving businesses time and money while providing their customers with a better product or service.
Process automation uses software to automate repeatable processes, including HR processes like payroll and benefits management. Implementing technology that automates processes provides several benefits including:
- Increased scalability and adaptability for future growth
- Better customer experience with faster response times and reduced service errors
- Improved employee satisfaction by decreasing repetitive, mundane tasks
- Reduced human errors
- Better visibility into your processes and teams
- Gaining valuable data insights for data-driven decision making
- Streamlined compliance processes
- Ability to respond more effectively, providing a competitive advantage
- Reduced costs like labor while optimizing resource allocation
- Improved efficiency, allowing companies to be more productive and focused on strategic goals
But these purchases can’t just be good on paper, they need to prove they provide a healthy return on investment (ROI) to decrease any further financial strain on the company. HR technology can help companies not only do more with less but can directly add value in terms of costs.
HR technology can help companies not only do more with less but can directly add value in terms of costs.
The Time for HR Automation is Now
Automation is the future of business. Automation can include something as common as software applications to something much more complex like robotics. Automation can help address many of the HR challenges that undercut productivity and drive-up costs including:
- 39% of HR leaders face recruiting and hiring challenges
- 27% find retaining key talent challenging
- 28% have learning and development or upskilling challenges
- 22% face challenges when it comes to benefits
Automating can also cut the cost of required routine manual tasks with automated ones like:
- Posting job listings
- Contacting candidates via automated emails and AI or chatbots
- Onboarding paperwork, including digital signatures
- Payroll processing
- Benefits enrollment
- Learning and development, including upskilling
- Tracking employee time and attendance
The right HR software can automate the most tedious and repetitive tasks, saving HR teams time while reducing costly errors, and it helps maintain compliance to reduce risk. Some companies find that using HR software helps them avoid adding new administrative staff.
Automation is the future of business. Automation can include something as common as software applications to something much more complex like robotics.
Residual Benefits of HR Automation
While HR automation is the key to managing necessary tasks with the utmost efficiency, it has other benefits as well. According to TechTarget, with HR automation there is:
- Less waste. HR automation reduces paperwork, which can lower the cost of materials and manual workflows.
- Data-driven decision-making. HR automation allows teams to track data across multiple functions, allowing them to analyze the effectiveness of processes.
- Transparency and consistency. When workflows are automated, staff receive clarity about their roles. Employees also receive transparency about things like benefits, expense reports and PTO.
- Increased productivity and better resource allocation. HR automation frees up time for both HR departments and employees by streamlining HR processes.
- Better security practices. HR automation provides tools that can better protect company and employee information.
When workflows are automated, staff receive clarity about their roles. Employees also receive transparency about things like benefits, expense reports and PTO.
ROI is a Big Consideration
Moving to more automation with HR software has significant benefits, but it still comes at a price. Without a doubt, HR tech tools are an investment. And if a company is going to sign off a new purchase, especially during a time of shrinking budgets and economic downturn, that solution better pay for itself, and fast. But that doesn’t mean companies are not confident about their ability to growth. But it’s important that any purchase offers a real and quantifiable ROI.
HR Software Investments That Prove ROI
Applicant Tracking System
An applicant tracking system (ATS) is the first tool HR teams should consider upgrading. An ATS can automate nearly the entire hiring process, saving both time and money by reducing recruiting costs and increasing the chances of hiring the right person.
The traditional hiring process costs an average of $4,000 per position. That may seem like a lot until you consider just how much is invested in hiring a candidate. The formula for calculating cost-per-hire is:
(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
External costs include:
- Posting to job boards
- Hiring a recruiter
- Relocation costs
- Recruiting events
Plug in your numbers and see just how high your cost-per-hire could get.
How an ATS Proves its ROI
An ATS provides efficiency, and that’s exactly how it saves money. With built-in job description tools, an ATS can post to numerous job boards automatically, speeding up the time it takes to reach candidates.
Because an average job posting costs ranging from $249 to $495 for a 30-day posting, speed is imperative. An ATS with the ability to perform background and drug screenings further accelerates the process. But what’s more, a good ATS will weed out candidates that aren’t qualified for the job.
Spending money on hiring a great candidate is one thing, wasting that money on a bad hire is another. A bad hire can also bring safety issues, workplace culture problems and even negatively impact recruitment and retention. A strong ATS will pre-screen and rank candidates using criteria tailored to your company’s needs. Better candidates will filter to the top, leading to quicker hiring, more fluid onboarding, a better work atmosphere and ultimately a more productive workplace.
An applicant tracking system (ATS) is the first tool HR teams often consider upgrading. An ATS can automate nearly the entire hiring process, saving both time and money
Onboarding Software
The cost to hire an employee is already high, but if that new employee quits within the first couple of weeks or even days, that money is not only lost but more must be used for a replacement. Turnover can be a huge drain on company finances. Simply put, a bad hire costs you. Calculate the cost for yourself using the formula below:
(Recruiting Costs + Onboarding Costs + Training Costs + Unfilled Time) x (Number of Employees) x (Annual Turnover Percentage) = Annual Cost of Turnover
How an Onboarding System Proves its ROI
One of the best statistics out there that prove effective onboarding is worth it comes from a Brandon Hall Group study for Glassdoor:
- Organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%.
While retention is one goal, reducing organizational risk is often another. When all required paperwork for new employees is automated, errors are reduced. Plus, a good HR software system will update forms automatically within the system, reducing the time it takes HR to pull paperwork and ensure accuracy.
Spending money on hiring a great candidate is one thing, wasting that money on a bad hire is another.
Performance Management System
A performance management system aids HR departments to create and manage all types of on-demand reviews like project based, skills assessment, discipline action form, employee recognition form and so on. Managers can also track all of this information from one dashboard. You can review employee performance on a project-to-project basis and provide managers with feedback from a project lead’s perspective by an individual, group or both. This type of feedback is not only productive for HR, but more and more employees are demanding it.
A Gallup report shows only 19% of millennials strongly agree they receive routine feedback at work. And, only 17% report receiving meaningful feedback, the kind that matters because it helps individuals learn, grow and do their jobs better.
Offering valuable feedback to employees keeps them engaged and focused on long-term goals with your company.
How Performance Management Proves its ROI
Performance management empowers team members to direct their own career development toward mutually agreed upon goals and competencies, which directly translates to engagement. And the more engaged your employees are, the more productive they’ll be. And, as engagement is directly tied to turnover, keeping it high is essential to maintain your workforce.
- Organizations with a turnover rate of 20% prior to the pandemic could expect that number to jump to 24% in 2022 and in years to come. (Gartner.com)
- A company with a workforce of 500 would need to hire 120 new workers each year.
But performance management also benefits your company. When employee efficiency is maximized, companies have an edge when it comes to achieving organizational business objectives. Basically, managers are able to better understand the strengths and weaknesses of the overall team and keep them focused on achieving their goals. By benchmarking, tracking and evaluating employee performance over time, HR teams gain all the insight needed to make informed personnel decisions.
The more engaged your employees are, the more productive they'll be.
Learning Management System (LMS)
Training shouldn’t end with onboarding. Ongoing training keeps workers safe, helping to mitigate high injury costs. According to OSHA, American companies pay nearly $1 billion per week for direct workers’ compensation claims to cover medical and disability expenses.
Incorporating a learning and development program via an LMS also helps to futureproof your business. Upskilling employees not only helps them feel more engaged but will fill any skill gaps left behind by workers who leave the job. In fact, offering development opportunities may help retain your workers.
- According to an upskilling study, 74% of Millennial and Gen Z employees are likely to quit in 2023 due to a lack of skills development opportunities.
How an LMS Proves its ROI
Staying up to date on safety trainings like OSHA and other professional development requirements ensures safer worksites. It also helps your employees become more skilled over time. Plus, indirect costs, personnel turnover or lost equipment can add up to a lot of money, and under-qualified workers amplify the risk.
Benefits Management
Benefits management is a core HR function. If it isn’t handled efficiently, your HR team can get lost in paperwork, translating to lost productivity. Not to mention that employees themselves are impacted by inefficient processes, i.e., employees don’t generally notice when benefits are managed well, but they WILL notice and become demotivated when they’re managed badly.
Automating the benefit management process clearly has benefits. Employees receive:
- Timely and quality communication.
- 24/7 access to information.
- They demand a digital process.
How a Benefits Management System Proves it ROI
A good HR software benefits module is a great tool to help companies offer a positive benefits experience while complying with regulations like the Affordable Care Act. Having your software do the heavy lifting on annual enrollment and maintaining the data for legal requirements makes perfect sense. Ensuring compliance is always a great investment because the alternatives are fines and lawsuits.
But by automating your benefits process, your HR team and employees can also save considerable time, which translates to improved productivity. And don’t forget the direct savings from reduced paper and postage to distribute benefits guides and other information. According to Forbes,
- US businesses waste $8 billion on managing paper each year.
Employees don’t generally notice when benefits are managed well, but they WILL notice and become demotivated when they’re managed badly.
Core HR
Core HR, otherwise known as an HRIS, HRMS or simply an Employee Portal, is the central hub for storing, managing and accessing employee data. Core HR helps HR teams and employees complete central functions like:
- Changing vital employee information
- Viewing pay stubs
- Automating workflows
- Storing and viewing company policy documentation
- Plus, Core HR stores all the data, keeping it secure, accurate and quickly accessible when teams need it.
How Core HR Proves its ROI
Using this type of HR automation can drastically reduce the time it takes teams to complete these tasks, freeing them up to focus on strategy or other big picture items.
- The time employees waste on completing HR-related tasks adds up to 40 million hours each month and about $8.15 billion in lost productivity, according to HR Executive.
And that increased productivity can not only save money but help increase company growth.
The time employees waste on completing HR-related tasks adds up to 40 million hours each month and about $8.15 billion in lost productivity, according to HR Executive.
Essential Integrations
Any piece of HR software is only good if it works with the systems that already exist, otherwise it could create more work. Integrations between software systems quickly and easily share data, saving time and ensuring accuracy. Arcoro’s Core HR integrates with top software systems like Sage 100 Contractor, Sage 300, CMiC and Acumatica.
Simply click a button and data is automatically shared through a set of cloud services, allowing you to update data bi-directionally. The integration partnership has advantages:
- Single source for the data necessary to process payroll for your employees, such as employee tax, demographic data, direct deposit and benefits elections
- Fewer data entry points reduce data errors and saves time
- Enhanced accuracy means better compliance for data-driven requirements like EEOC
- All data is secure and protected
- Minimal set-up required; integration protocols are established, tested and turnkey
How Integrations Prove their ROI
Having a single source for necessary data gives HR teams the ability to better handle necessary employee processes, such as employee tax, demographic data, direct deposit and benefits elections.
- Fewer data entry points reduce data errors and saves time
- Enhanced accuracy means better compliance for data-driven requirements like EEOC
- All data is secure and protected
- Minimal set-up required; integration protocols are established, tested and turnkey
When integrations simply work, all your HR software does what it was meant to do: save you time and money.
HR software is a big purchase and decision makers will have an easier time getting on board if they understand the cost benefits. HR software not only addresses workforce management challenges, but automating processes saves money both directly and indirectly via reduced workload and increased productivity which translates to cost savings every time.
Having a single source for necessary data gives HR teams the ability to better handle necessary employee processes, such as employee tax, demographic data, direct deposit and benefits elections.
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