Measuring the return on investment (ROI) of the administrative tasks that human resources departments do is already a difficult task. Throw in the recent trend of moving to the cloud and you have further muddled the water.
It’s vital for companies to consider the ROI of all aspects of its operations, but especially when paying for a subscription-based technology. A 2017 report by Information Service Group found that over 75% of companies expect to have migrated at least one HR system to the cloud by 2020. So how do you measure the ROI of these technologies when you might not even know where to start? The key is to measure the quantifiable items, but also to take the non-quantifiable benefits into consideration.
Use the below items to help you measure the ROI of your HCM software.
Cost and Time Saved Through Automation
We have all heard that automation saves time and money. But how exactly? Automating various human resources tasks via an HR technology targets two main time- and money-consuming aspects. First is eliminating errors. Removing manual processes ensures fewer clerical errors and time saved going back and forth. For example, inevitably requests pour in at the end of a pay cycle for missing or overtime hours and a software can reduce errors by verifying the hours worked. It can also consolidate data entry to prevent mistakes when entering data into multiple systems. But the second benefit is saving time. An automated HCM software can save significant time in generating reports, sending alerts and notifications, and allowing employees to obtain specific benefits, policies and more information without consulting HR.
An HRIS solution can integrate the following essential HR functions with your payroll processing to save time and money.
- Online attendance and leave management to manage vacation and absenteeism
- Online benefits
- Over time and under time calculations
- Tardiness calculation
Boosted Employee Productivity, Satisfaction and Retention
It can be difficult to pinpoint the cause of high employee turnover or poor employee satisfaction. From recruiting and hiring candidates to engaging and evaluating employees, leveraging an integrated HCM helps you improve your workplace environment. Planning and tracking talent strategies can help you hire new talent and retain existing employees. Efficient time and attendance saves resources while boosting productivity among employees. Further, establishing a consistent and transparent performance review process improves the speed and accuracy of employee evaluations. All these factors contribute to productivity – productive employees rake in an average 2x more revenue than average employees – improved workplace satisfaction and eventually, reduced attrition.
Improved National and International Compliance
In multi-national companies, human resources managers have their work cut out for them. The varying compliance regulations from country to country, as well as those within local states or provinces, can be overwhelming. However, most cloud-based HR technologies come with GDPR compliance features built in. Moving to a cloud-based solution not only reduces the hours spent drudging away on these regulations – that can and do change often – but saves from future risk that human error can contribute to a situation.
Human resources departments often face a loss due to human error, delays in manual processing, or non-compliance. They can issue salary over payments due to incorrect overtime benefits and under-time calculations or have poor resource allocation and scheduling due to a lack of documentation. Considering the quantifiable and non-quantifiable, an effective HRIS might be the solution for you.