3 Ways Software Can Drive Down Human Resources Costs

by:
on June 28, 2019

If the experts are right, we’re facing a major economic downturn in the very near future. During economic decline, businesses often opt to downsize their workforce and cutback on operational costs—decisions that are made non-strategically, and in haste.

Recession-proofing shouldn’t be reactionary, and cost-cutting for the sake of it will harm your business. Constant cost reductions aren’t sustainable and don’t adequately prepare your business for future financial challenges. This is even more true for HR departments.

Businesses that want to drive down human resources costs need to turn to their HR leaders, HR analytics, and HR software to help them identify potential cost reductions driven by data.

In this article, we’ll discuss three areas where HR software can help reduce human resources costs: workforce decisions, automation of repetitive tasks, and future-proofing the business.

Workforce decisions: Stay ahead of employee turnover

Your employee leaves unexpectedly, leaving you with a gap in your workforce and the time-consuming and costly task of sourcing, recruiting, and training a new employee.

But what if you could predict which employees are at risk of leaving the company, along with their expected exit cost and reasons for their possible resignation? HR analytics can anticipate all of these things and more, with the aim of aiding strategic workforce planning.

For example, Visier collates data such as market compensation ratio, time since last promotion, tenure and more to assign an “at-risk score” to each employee.

Visier predictive analytics

Visier’s predictive analytics feature displays which employees are most “at risk” of resigning based on a real-time analysis of all employee attributes (Source)

 
How does this feature reduce human resources costs?

Employee turnover costs companies in time and money. Research shows that it costs employers 33% of an employee’s annual salary to hire their replacement, and that 75% of the causes of turnover are preventable.

Accurate workforce planning will help you make better talent decisions. Though turnover is inevitable, being in a position where you can either prevent the potential loss of an employee or at least financially forecast for a replacement will prevent massive budget overruns. HR analytics can also help you determine how much money should be allocated to retention exercises or further career development.

Automation of repetitive tasks: Streamline HR processes

Though a large number of HR tasks can be automated, recent research found that the most common automated HR tasks through software are payroll management, benefits management, and time and attendance.

For modern HR departments, paper-based records and Excel sheets just don’t cut it anymore. No matter how small your business is, if you’re using manual methods instead of HR automation, your business is almost definitely losing money to either administrative human errors or loss of productivity.

HR system Zenefits centralizes all payroll information in a single system, and then automates the whole process. Payrolls are run at the click of a button, and processes such as clocking in/out, vacation requests, and benefits changes are automatically applied to payroll.

Zenefit‘s payroll feature automates the full payroll process (Source)
 

How does this feature reduce human resources costs?

Manual and repetitive processes are costing managers one full working day per week. Automating manual HR tasks frees up time to allow HR employees to focus on strategic business initiatives, and because there’s less need for extra staff to carry out manual tasks, businesses can keep the size of their HR departments small.

Future-proofing the business: Planning fosters business agility

Forecasting has long been a key HR responsibility—projecting staffing needs, budgets, succession planning, and the resources needed for such activities is a core HR objective. But accurate scrutinization of the labor market, economy, and an aging working population and their effects on a unique business is no easy feat—at least, without the help of analytics software.

While you may currently have a strong workforce, do you know how to plan for unexpected attrition? Do you know how to conduct accurate trend analysis in terms of necessary skills or supply and demand? Perhaps you do, but you also know that this is a highly time-consuming task.

HR analytics tools can help businesses plan for navigating an uncertain future, by analyzing internal factors (budgets, organizational structures, etc.) and external factors (competition, economic climate, evolution of technology, etc.). For example, UltiPro’s business intelligence feature predicts employee tenure and top performers to help future proof the business.

UltiPro‘s predictive analytics tool provides several data-based workforce metrics (Source)
 

How does this feature reduce human resources costs?

This one’s easy—having a more comprehensive view of the future allows you to budget accurately now. If you can more accurately predict what and who you’ll need in the future, or plan better for a possible economic downturn, you can make well-informed financial decisions sooner rather than later, avoiding overrunning your budget.

Now’s the time to start reducing human resources costs

Alongside minimizing business expenses and risks and developing strategic plans, HR departments have developed to become an integral part of helping keep business costs down. Without data-driven and automated processes, many HR tasks are time-consuming and arduous.

Far from reporting on empty metrics, HR analytics software goes beyond numbers and data to focusing on driving substantive business improvements by helping to reduce human resources costs. With a recession looming, the time is now to begin your HR analytics journey. Data-driven HR planning will help you evaluate business threats, opportunities, and cost cutting exercises.

If you’re still unsure about which HR software can help you reduce your HR costs, give us a call on (844) 675-2849. Our expert software advisors offer a free 15-minute phone consultation to give you a full assessment and product recommendations for your unique business needs.

Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.

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