Is A New HRIS Worth the Investment?

HR software can do some incredible things these days. We now have technology that can carry on a conversation with you (chatbots), tell you what your employees are really thinking (sentiment analysis), and screen that long list of candidates (AI). But if you had to quantify those benefits and present a report to your boss demonstrating financial value to your organization, could you do it? 

Many of the advancements we’re seeing in HR technology aren’t easy to measure in terms of dollars and cents. And that’s tricky, because if you want to make a case for investing in new software, you’ve got to demonstrate a reasonable return on that investment.

In other words, how is it going to make the company more profitable, productive, or competitive?
 

The Value of HR Software

In a nutshell, return on investment weighs costs against gains. (BambooHR has a great discussion of this process over on their blog.) While gains in HR might not always be as straightforward as they are for the sales or marketing department, you can still demonstrate profits and cost savings by presenting HR as a value creator.

Let’s take a look at 3 ways upgrading your HRIS can deliver a positive return on investment:

1. It improves employee engagement.
   Employee engagement is a key component of improved retention rates and reduced turnover. Engaged employees work more effectively with their colleagues, stay with the company longer, and get more work done than their non-engaged or actively disengaged peers. That means the company will spend less on recruiting and they’ll see higher profits as employees get more work done faster. And technology has a lot to do with those results.
   
   Experts suggest that one hindrance to engagement on the job is that employees use much more sophisticated tech at home than they do at work. That means they need more training and get frustrated more easily because their work software is clunky, slow, or requires too many steps to get the job done. Newer, faster, more intuitive technology is a great way to help employees engage more effectively with their work. That’s true in the HR department as much as it is in the sales department.
   
   HR technology in particular can improve engagement in other ways as well. For example, peer-to-peer feedback, learning and development software, mobile access, recognition incentives, and performance review tools all boost engagement on the job and build a culture based on value and collaboration.

2. It supports HR as a value contributor.
   Decision-makers tend to think of HR software as a cost center rather than a value contributor, and for that reason they often don’t consider it to be a worthwhile investment. But the true value of HR technology lies in making people more successful in their work so that they can in turn produce more for the company. 
   
   HR software gives people the tools they need to manage teams effectively, work together collaboratively, use their time efficiently, and hire more qualified candidates. And it does all those things faster and at lower cost than your HR team could do them manually or using outdated tools.
   
   For example, HR data serves as the foundation for predictive analysis that can identify potential flight risks, predict retention rates, and support better hiring decisions.

3. It builds a strong foundation for innovation.
   The most important reason to invest in a new HCMS or HRIS, however, might be the potential it holds for the future. We’re in the middle of a digital revolution, and companies that don’t prepare for innovation now will fall behind as their competitors use technology to find and hire top talent, create engaging workplace cultures, and position themselves as desirable employers.
   
   But successful innovation requires a strong technology foundation. You can’t integrate machine learning into your recruiting process if you don’t have the technology in place to support it. You need clean, accessible data, streamlined processes, and integrated tools before you can capitalize on the powerful new technology that is hitting the market. Upgrading your HRIS is an essential first step toward achieving your greatest potential in the HR department.
   
   

When Is It Time to Invest?

So is a new HRIS worth the investment? In many cases, yes. To answer that question for your company, however, you’ll need to take a look at the technology you have now, your goals for the future, and the steps you need to take to achieve those goals.

Developing a comprehensive requirements list is a great place to start, and our HRIS matching tool will walk you through the process. Click below to get started!

 

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