Your work force is your most important asset, after all your employees are the ones coming up with ideas, putting plans into motion, and helping your company make money; but they are costing you money at the same time. In fact, the average cost of HR services is about $1900 per employee each year. Let’s put that into perspective- if you have 100 employees, you are averaging $190,000 each year in HR services. But you can’t just get rid of employee benefits and cut down salaries if you want to recruit and keep top talent on your team, so what can you do?
They key to success is balancing and containing these costs to keep overhead low, yet business growth and employee retention high. Your Human Resources Department can help you do this, but they need what we all need- more time. That’s where human resource software comes in.
Building a Case for Human Resource Software
Your HR department handles a myriad of tasks and is responsible for tracking any and all information, documents, and regulations pertaining to your employees; including hiring and firing, payroll, training, employee benefit management, reporting, and much more. Further, the amount of paperwork HR Departments need to manage is astounding! For example, a company who has 200 employees that offers 4 versions of 10 different benefit plans, the HR department must generate, distribute, track, and follow up on 8,000 documents- that’s before anyone even enrolls! The number only gets larger from there.
On top of the mountain of time consuming paperwork, over 50% of a human resources department’s time is spent simply processing employee information and answering questions, According to research by the Center of Effective Organizations. A similar study by the Society for HR Management found that 60% – 80% of an HR staffer’s time is tied to repetitive administrative tasks, answering questions, and gathering information for reports.
When HR is stuck doing all of that important yet redundant paperwork, putting reports together, answering questions, and taking care of other daily activities, they simply don’t have the time to focus on more strategic activities. For example, managing compliance regulations- an extremely important task fraught with opportunities to make costly mistakes.
When it comes to the management of employee compliance regulations, such as COBRA, ERISA, Worker’s Compensation, OSHA, FMLA, and the many other laws around employment, even the smallest misstep, missing document, or other non-compliance issue can cost you. For example, the OSHA violation can cost upwards of $70,000 or more- not to mention the legal fees and other expenses associated with working through the process. Which is why 60% of HR leaders say compliance and risk are their top concerns according to ADP.com.
So, back to the ever-present issue of time… When HR Employees are left to manage all of this manually with spreadsheets and/or the limited capabilities provided in their ERP system, the end result is stressed out HR employees, paperwork or payroll mistakes, disgruntled employees, and high risks for compliance penalties and liabilities due to the complexity of today’s business and government mandates.
Human Capital Management software (HCM) can help HR Departments get out from under the mountains of paperwork and daily administrative tasks through process automation, giving HR employees back the time they need to reduce the risk of liability, decrease HR overhead, and maximize the ROI of each and every employee.