Building the HRIS business case with ROI
You have long wanted to implement a HRIS, and your company has just chosen you to present a business case outlining the return on investment (ROI) of implementing such a system. You are well aware of the benefits of implementing a HR system but need to present these benefits in a quantifiable way. As a HR manager you understand the importance of managing staff and potential staff effectively. Implementing a HRIS can assist you in managing your staff faster, better and more efficiently. It is also important to convey the unquantifiable benefits of a HRIS, in some cases the benefits that you can’t measure outweigh the quantifiable benefits especially when planning HR from a strategic perspective.
Quantifying ROI by Measuring HRIS Benefits
Let’s begin with outlining the quantifiable benefits associated with implementing a HR system. Implementing a HRIS means eliminating manual processes which include automating:
• Leave requests
• Performance reviews
• Searching for employee files
• Managing applicants
Leads to a saving on HR Manager’s and Manager’s time spent on processing these transactions. Let’s look at a leave request for example, to manually process a leave request could take anywhere between 45 minutes to an hour with the back and forth handling of paperwork. Using a HR system with Employee and Manager Self-Service, this process could be reduced to roughly 10 minutes. This is an example of the savings automating leave management can bring to an organisation of roughly 250 employees.
Leave Management Processing with and without HR automation
|Number of requests||100||100||–||–|
|Processing Time||100 hours||16.6 hours||83.4 hours saved||125 working days|
|Cost||$9,000 per month*||$1997 per month**||$6256 saved||$84,036|
*Based on an average processing salary of $45 per hour and accounting for productivity loss. **Includes cost of software for 250 employees.
Emailing payslips can be a very time consuming task, one that is eliminated completely when using a HRIS. Employees will be able to log into their Employee Portal and be able to view all their pay history.
Performance management is essential in an organisation, effective performance management can be the core of increasing productivity and monitoring employees. Automating this process saves you time and money in eliminating the back and forth of paperwork associated with performance reviews. Converting performance reviews from a manual process to an online process not only saves the organisation time in money but also with the amount of paper and ink used to print the reviews in the first place. The ROI is paramount.
Even something simple as searching for employee information and an employee file can be reduced to seconds, where as when having to sift through paper work or excel spreadsheets can significantly increase the time spent searching for a file to then carry out the task you were meant to do. A HR system will increase productivity drastically.
Managing applicants within a HRIS also leads to savings on a deeper level. Reducing hiring delays and the time it takes to fill vacancies will save money and increase productivity as it frees up HR managers time to undertake other more strategic tasks.
Other Intangible HRIS Benefits
Using a HR System to assist you with recruitment will allow you to be more strategic in your decisions and allow you to compare applicants more effectively. Using a HR System for recruitment means that you can also build your own talent pool so that you can keep track of your bench strength. Building a high quality talent pool will lead to a solid stream of candidates which you can ensure are the right fit for the organisation. This will then save costs in having to find new applicants if the individual you initially hired isn’t the right fit.
The ability to identify high to low performers is very useful within an organisation. Using a HR System and setting up user defined criteria and employee goals as a HR manager you can easily track the performance of employees and use this data to make strategic decisions to either motivate, challenge, develop or promote an employee. These strategic decisions benefit the organisation by ensuring your employees are always on the right track which leads to a higher quality workforce.
Linked to performance management an e-Learning module within a HR System can ensure you are constantly developing your employees’ skill set. With the ability to create training plans, and role out courses to employees you can focus on increasing the productivity of your employees. Being able to keep track of employee training history will allow you to easily identify gaps and therefor fill those knowledge gaps in your workforce. This will then lead to a higher skilled and knowledgeable workforce. Another benefit will be retaining qualified and loyal staff as employees will feel valued when time is taken out to develop their personal skillset and employee moral will be significantly more positive.
Work Health & Safety
The benefits of an online health and safety system are obvious; you are ensuring that any foreseeable workplace hazards are avoided keeping your employees away from harm. With a streamlined system for reporting hazards any incidents a HR System can ensure that all hazards are taken care of as soon as possible and any incident recorded and dealt with instantly and via a proper procedure.
There are also security concerns involved with using spreadsheets, most data breaches in organisations are through HR. This is a result of spreadsheets, because even if they are locked down securely, they are not a safe place to store confidential information. In previous roles, colleagues have been mistakenly sent emails of organisational data. This can be a major issue and breach of confidentiality. Eliminating the use of spreadsheets to manage HR not only will eliminate menial administration tasks, but on a more serious note implementing HR software will provide a higher level of protection to business and employee data than a risky spreadsheet can offer. Data stored securely in an integrated human resources system with different security settings for certain employees and managers is a sophisticated way to address security and privacy around confidential documents, which are essential to an organisations’ privacy.
Utilising a HR System to it’s full potential will allow you to influence the culture of the organisation. Developing and cultivating and engaging environment where employees want to turn up to work is very important. A well developed company culture creates positive change across an organisation, and a HRIS is at the core of fostering a positive environment to work in. With company culture becoming more important than ever, it is really important to ensure that your companies values are aligned with employee goals. A HR system leads to employees being more engaged within the organisation. When a complete end to end HRIS is utilized correctly all the way from recruitment through to performance tracking and training, employees will feel a sense of purpose with increased moral within the organisation. Aligning company goals with employee goals will provide clarity to employees about what is important and you as a HR manager will also be able to see when company culture needs to be reevaluated if employees are underperforming and seem disengaged.
Overall a HRIS provides a huge ROI with clarity in processes, which allow you to streamline your processes saving time and money. Clarity in process also leads to happier employees and an improvement in company culture leading to a better delivery of services. A HR System is the change you need to improve your organisation, the ROI’s outlined above should give you a clear idea about how to convince your boss It’s Time.