6 Ways HCM Software Trims the Fat from HR
Does HR software save you money?
It’s not always an easy question to answer. But it’s a vital one if you want to make a case for new technology. The tricky part about answering this question is that HR isn’t directly involved in generating sales or products, and therefore it’s not as easy to demonstrate how it contributes to your bottom line.
Still, there’s a strong case to made for HR as a value contributor:
1. HR is indirectly involved with all value contributors in your organization.
2. Efficient HR practices save money by reducing work hours.
The more efficient your HR department is, the more money you save across the board. And that's where your HCM software comes into play.
HR As a Value Contributor
Employee engagement, recruiting practices, onboarding experiences, performance management—all of these things intersect with every employee who walks through your doors, and they strongly influence the productivity and contributions of those employees.
Consider these statistics:
These outcomes fall directly into the scope of HR, and they form the basis for value contribution. Happy, productive employees generate more profit, and effective HR practices form the basis for employee satisfaction.
If that’s the case, then software that increases the productivity and satisfaction of employees also contributes to higher profitability.
But there’s another way new software benefits your company: cost savings.
Higher HCM Software Efficiency = Lower HR Costs
How much time does it take your HR staff to process payroll every week? Sort through candidate resumes? Manage employee scheduling and PTO?
What if you cut the amount of time needed for those things in half? Or even reduced it by 25%?
The right software can help you do that. HCM software cuts costs by automating tasks, managing document storage and retrieval, streamlining data analytics and reporting, and generally reducing the number of hours needed for the labor-intensive tasks of HR.
For example, one global financial company was able to cut costs by 40% after implementing a new HR management system and consolidating operations.
We’ve already talked about how HCM software can improve your bottom line by increasing value to employees. Now let’s look at five additional ways it can help you cut costs:
- Manage Data and Analytics
If you’re still storing information in filing cabinets, bringing all of that data online will literally change your life. 80% of companies have reporting challenges, and many point to technical debt as a key hindrance. Better software helps you track, sort, store, and analyze your data faster and more accurately, and it also gives you the building blocks you need for robust analytics and reporting. With fewer errors and smaller time investments, you’ll enjoy a reduction in the cost of labor for these critical processes.
- Automate Processes
What if you didn’t have to run reports manually in Excel? What if you could automate payroll? What if you had a scheduling calendar online where employees could see when others would be off and coordinate time-off requests accordingly? The more you can automate your processes, the fewer hours your HR staff will spend on repetitive tasks and the fewer errors you will have.
- Give Employees Access to Information
Employee self-service portals empower employees to access and manage their own data including benefits, pay stubs, personal information, and time-off requests. That increased transparency offers the twin benefits of less frustration for employees and fewer hours handling information requests for HR staff.
- Streamline Recruiting
Recruiting involves a lot of labor-intensive investment: sorting through resumes, matching job descriptions, managing candidates, and developing an effective onboarding process. With the right software, many of these tasks can be automated, freeing your HR staff to focus on critical interviews and decision-making. And because candidate experience is so important to your employer brand, technology that supports a more candidate-friendly process can also help you hire and retain more of the best people. Over time, you’ll see a reduction in recruiting costs as well as the number of work hours required to fill your open positions.
- Improve Retention
We know what you’re thinking. It's the strategy that improves the retention, not the software. But stick with us. Research shows that key retention contributors include positive candidate experiences, flexible work conditions, effective communication, and regular feedback. And while managers and workplace culture ultimately determine how these strategies play out, software serves as the underlying support structure. Your software gives you the tools to implement better review policies, more frequent communication, stronger employer branding, and employee-friendly scheduling. With the right tools in place, you can build a culture that attracts and keeps top performers—and consequently, cuts your recruiting costs.
Bottom Line: HCM software helps you get more done in less time. It’s a time-tested way to reduce the costs associated with any department. As more organizations recognize the value of HR for employee satisfaction, engagement, and retention, HR leaders can build a stronger case for technology investment based on added value.
Ready to find your perfect HCM software? Our HRIS Comparison Tool creates a software shortlist based on your business requirements!
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