Why technology is important to save HR costs and affect the bottom line

When working in fast growing Companies, where growth depends highly on the quantity and quality of new hires needed, it is paramount that HR processes are automated. Without these technology solutions Human Resources will be contributing to increased opex costs instead of working with a highest efficiency to targeted goal of growth.

It has been proved that Organizations that have introduced technology solutions for key HR areas like the ones shown below will improve the bottom line.

• Talent Management
  
• Staffing
  
• Compensation
  
• Performance Management
  
  

Solutions like Self Service, HR-oriented help desk solutions, HR data warehousing and other will definitely help achieve better results.HR Managers will bring more value to their Organizations by conducting business cases and cost justifications for the introduction of these technologies.
There are a few approaches that HR managers use to determine the value of HR technologies:

1. Process savings
   
2. Headcount changes
   
3. Metrics
   
4. Other
   

All these approaches are well documented on HR literature. I will try to focus on metrics

There are very important metrics available for the HR function that any HR Manager should follow in order to properly align HR goals with the overall business goals. As I stated at the beginning of this post for fast growing companies HR Managers should understand what the right mix of personnel and automated processes is required to:
Deliver the right amount of talent, with the right quality in the right time.

Some of these Metrics are:

1. 
   
   Cost metrics
   1. HR Cost per employee
      
   2. HR admin labor cost per employee
      
2. 
   
   Headcount metrics*
   1. HR Admin ration
      
   2. Payroll admin ratio
      
   3. Staffing headcount ratio
      
   4. Other HR functions ratio per total employee count
      
3. 
   
   Cycle Time
   1. Time to hire (in days)
      
   2. Time to complete transfer or solution
      
   3. Time to complete salary action
      

These metrics are not difficult to collect and should be part of the HR department business dashboard, only them HR should be able to proactively determine whether it's positioned to achieve the company's business goals.

I will follow up this post with other very important HR metrics like

• Recruitment Effectiveness Index
  
• Skills Inventory Index
  
• Employee Training Index
  
• HR Total Cost matrix
  

Stay tuned.