Often based in the cloud, HR software is a digital solution that automates processes such as payroll, onboarding, and employee training. Its purpose is to provide low-cost systems for people management that will enable you to focus your attention on more rewarding and lucrative aspects of your role.
Let’s take a look at 10 ways you can use HR software to save money across your organization.
1. Streamline HR Tasks
When you use software to automate certain time-consuming aspects of HR, it stands to reason that you won’t need to hire (and pay) as many people to run the department. If you’re a small business owner, this could even mean that you don’t need a dedicated HR department at all.
Likewise, implementing HR software could enable the people who do work within your HR department to dedicate more of their time to the more meaningful aspects of employee relations such as staff well-being, professional development, and the creation of a diverse and inclusive workforce.
2. Hire More Efficiently
With the expense of advertising new openings, performing background checks, and interviewing candidates, recruiting new staff isn’t cheap. In fact, a survey from the Society for Human Resources Management found that the average cost to hire a new employee is $4,129.
Luckily, HR software can help reduce these costs and also improve your chances of finding the right candidate. Once you have created a job posting within your HR software, many platforms will automatically post it to a range of job boards and social media sites, and then keep track of all your applicants. As well as reducing the number of staff hours spent on recruitment, this automated approach can help ensure that a wider pool of potential candidates sees the job posting—with much less costly oversight by your team.
Many pieces of specialist hiring software even offer capability assessment tools such as cognitive and personality tests that can provide an initial review of your candidates and help you draw up a shortlist of the most promising applicants.
3. Reduce Onboarding Costs
While welcoming new employees is vital to creating a sense of belonging across your business, the onboarding process can be an onerous—and expensive—one.
As soon as you’ve decided to hire someone new, many pieces of HR software will allow you to create a personalized offer letter via a pre-approved template. Once this has been sent out, you can use the software to check whether the candidate has received and signed the letter.
Once your new employee has started in their role, they can use this software’s self-service function to enter personal details such as their address and Social Security Number. This can drastically reduce the amount of time your HR staff needs to spend chasing these details.
4. Run More Cost-Effective Trainings
By replacing expensive in-person training sessions with online courses that your employees can complete at a time and pace that suits them, HR software can provide an affordable solution for staff learning and development.
Although all businesses have different training requirements, some common modules offered by many HR solutions include:
- Health and safety
- Anti-harassment policies
- Financial compliance
- Mental health awareness
- Data security
As a line manager or business owner, you can track which employees have completed their training via your software’s dashboard.
Remember, you will need to review your training material regularly to ensure it remains current and update it in the event of a change in protocol within your business. However, this is a small cost compared to running such trainings yourself.
5. Avoid Costly Human Error
No matter how conscientious your HR professionals are, nobody is immune from making a mistake. If you employ human staff to input data and make complex calculations, errors are inevitable. These mistakes take time and cost money to correct.
By automating such functions, you can massively decrease the risk of error. This is particularly important when it comes to payroll. As well as potentially putting a member of staff at risk of financial hardship, payroll errors can erode the sense of trust between a business and its employees. Once an employee becomes disengaged, they could be less productive or engaged, which will ultimately cost your business money.
With this in mind, many HR software solutions can automate certain payroll functions and even search for discrepancies within your payroll data and notify you of any inconsistencies or potential mistakes.
6. Improve Data Security
Since computerized systems have a far higher level of accuracy than human beings, the automation of HR tasks greatly reduces the risk of inadvertent data loss as well as payroll errors. From a financial perspective, this decrease in risk presents a huge potential saving, as the mishandling of employee data could result in costly legal action being brought against your business.
If you are migrating to a cloud-based HR solution for the first time, you might also be pleased to learn that many pieces of software will allow you to upload your past data from Google Sheets or Excel, which should ensure that no data is lost during the transition.
7. Make Taxes Easier
If you’re a small business owner, you probably devote dozens of hours each year (if not more) to ensuring your taxes are in order and all your documents are ready for filing. Whether you do this yourself or outsource some of the work to an accountant, there will be a cost involved, either in fees or in your own time.
The most effective pieces of HR software will store all tax data relevant to payroll systems, as well as implement deductions and make updates linked to new tax regulations. Some will also file your taxes with relevant government agencies every time you run payroll.
If you’re concerned about missing deadlines, you could consider a solution that allows you to set reminders for crucial deadlines or provides you with compliance alerts over any change to federal or state tax laws. Having these checks in place can mean that you are far less likely to face expensive IRS penalties.
8. Spot Patterns in Staff Absences
While it goes without saying that a responsible business owner has a duty of care to staff who are genuinely unwell or need to take time off for a legitimate reason, unforeseen staff absences can also be hugely expensive for an employer.
HR software can use algorithms to spot any patterns in unexpected staff absences. You may, for example, notice that an employee is frequently absent on a particular day of the week or at a certain time of the year. Having this information can provide you with the opportunity to raise the issue with the relevant staff member if it’s appropriate to do so. Depending on the circumstances, you can then offer support or consider disciplinary proceedings.
From the employee perspective, this type of software can also allow members of staff to book holidays and input requests for time off, ensuring they are making full use of their holiday allocations without hassle.
9. Access Brokered Employee Benefits
Depending on the provider you choose, HR software can provide you with access to brokers who can manage your employee benefits program. This can dramatically reduce the amount of your valuable time you spend overseeing these functions and may provide you with access to more affordable benefit options.
Although all providers are different, some companies will allow you to sync benefits such as 401(k) plans, dental, vision, and medical insurance with your payroll function. Others will provide you with access to more specialist benefits such as health savings accounts, disability insurance, and dependent care flexible saving accounts (which offer significant tax benefits).
10. Receive Actionable Insights
When it comes to running a cost-effective business, knowledge is power. Many HR solutions can provide you with key insights that could help identify unnecessary spending across your company and boost long-term profitability.
Through customizable reports and trend analysis, HR software can provide you with details such as the number of employee hours spent on a particular project and the cost to you in staff wages. Armed with this information, you can eliminate any areas of waste and protect your bottom line.
Some platforms also allow you to conduct anonymous staff surveys, which could enable you to identify cost-cutting opportunities through feedback from your employees on the ground.
Conclusion
As an entrepreneur, even if your top priority is the products and services you’re passionate about, you may find your focus is divided if you’re devoting hours to performing HR tasks every day.
By automating core HR functions with HR software, you can reduce the amount of time spent on tedious administration and staffing tasks, cutting labor costs and reducing the likelihood of expensive mistakes. Plus, this means you’ll have more time developing new products, networking with clients, and honing your business’s strategy—all of which could significantly boost your profits.
All HR software providers offer different features, which means it’s crucial that you compare a wide range of companies before making a purchase so you can find the best fit for your needs. Then you’ll be well on your way to saving time and money with HR software.
