It’s fair to say that the world of business has been in chaos over the past few weeks. The recent ‘mini budget’ and subsequent U-turns by the Government have led to disarray in the financial markets, and growing concerns about the long-term health of the British economy.
Business leaders will undoubtedly be asking themselves how they can weather the current economic storm. Reducing company expenditure and making their businesses as profitable as possible are the priority, and this is where HR’s role will likely come into sharp focus.
HR is often the first department impacted by cost cutting. Hiring gets put on hold, training budgets are slashed and, in a worst-case scenarios, downsizing and redundancies have to be planned for. Another casualty can be the software you use. Unless they see the value of it, company leaders may decide not to invest in an HR software solution, or even cancel their current service altogether to reduce company expenditure.
Whilst these courses of action may seem logical to the budget-conscious business owner, they could be incredibly costly mistakes to make. Here’s why…
Reducing company expenditure: why doing without HR software isn’t the answer
No company wants to be spending more than they have to when money is tight. While cutting down on an HR software service – or indeed putting the implementation of an HR software solution on hold – may leave more cash in the bank at the end of the month, the results could have hugely negative impacts on the wider business.
That’s because great HR software systems support businesses and their HR teams into making better decisions, lifting employee productivity and improving those all-important operational efficiencies. In addition, a good HR software solution can result in significant savings – both in time and money – that more than make up for the system’s financial outlay. For example…
1. HR software can help prevent costly HR errors
When we consider how vital the support of a good HR department can be to a business, it’s essential that company leaders recognise HR is an area of the business fraught with complexity. Having to handle large volumes of data, deal with time-critical requests and manage difficult conversations is all in a day’s work for HR professionals, but mistakes can happen.
Although human errors in HR can never be totally eradicated, HR software can help reduce them by automating and streamlining many of the laborious or complicated manual tasks HR teams must undertake, such as:
- Managing paid leave allowances
HR software solutions that include absence management software – such as Cezanne HR – can automatically calculate how much paid time off employees are due, and also help manage any kind of absences that might be required; including TOIL or parental leave. When you have an absence management system that can handle even the trickiest annual leave calculations, the human factor which can lead to calculation errors is dramatically reduced.
- Time tracking
If your business relies on paper-based timesheets to bill clients or pay staff, there can be a heck of a lot of admin for HR to contend with; including overtime approvals, resource management and – of course – keeping track of hours worked. HR platforms that include intuitive time tracking software can automate many of these manual processes; ensuring improved accuracy where correctness is crucial, and mistakes can be expensive!
- Storing and securing sensitive employee data
HR professionals are legally obligated to keep their employee’s data safe and secure. However, this can be incredibly difficult if a business is reliant on paper-based or disconnected filing systems. HR software platforms – especially those certified to ISO27001 – can offer a highly secure and centralised location for all your sensitive employee records. Better still, they can be accessed anytime, from anywhere, and remain protected against disasters that could otherwise destroy paper-based records, such as a fire or flood. Remember: the legal ramifications for a company failing to have sufficient safeguards in place to keep personal data safe can include massive financial fines and irrevocable reputational damage.
2. HR software can reduce hidden expenditure
One of the more tangible benefits of digital HR software is the fact it can help a company go paperless – meaning a cost-conscious business can reduce what it would normally spend on things like paper, printing and stationery.
It’s worth remembering little stationery expenses will all add up over the course of a year. According to business energy comparison website Bionic, a department with 1-4 employees can spend on average £870 per year on stationery, and this will only increase with the more people you have!
So, whilst having an ongoing HR software service or implementing one in the first place may be an expense, it can lead to significant cost savings when it comes to office supplies in the long-term, since much of your data – and associated administration – will be transferred online.
3. You will improve your time-to-hire efforts…
The business of recruitment can be hugely time consuming: especially if your company is undergoing rapid growth. From the sorting and managing of applicants, to placing job adverts and communicating with candidates. Luckily, HR software that includes applicant tracking systems can automate many of the admin-heavy tasks associated with sorting, communicating, managing and shortlisting candidates – streamlining your company’s time-to-hire processes.
Good applicant tracking systems – such as Cezanne HR’s Recruitment module – will centralise job applications, candidate CVs and shortlisted applicants. This means HR and recruiting managers can access these critical documents at a click – rather than having to sift through disorganised files and documents.
Despite the economic downturn, the jobs market remains fierce. Those time-saving features we’ve mentioned can help prevent your business from losing any great candidates that might get missed beneath mountains of paperwork – reducing your company’s expenditure by decreasing your time to hire and getting the right people in at the right time.
4. … And save on recruitment costs
Along with improving your time-to-hire efforts, HR platforms with dedicated recruitment software can also help you to cost-effectively fill job vacancies and avoid unnecessary company expenditure.
Recruitment software can help you streamline the filling each vacancy. For instance, the Cezanne HR Recruitment module allows users to screen CVs more efficiently and communicate with candidates without having to leave the platform. In addition, since every online job application goes directly into a dedicated database, you can easily track key metrics such as time to hire or time to fill. You can also review which recruitment sources are working best for you and, as a result, keep an eye on your company’s overall recruitment costs.
5. Address absence costs
Unplanned absences can be hugely damaging to a company’s bottom line. If employees begin to rack up excessive absences, decreased productivity and morale – as well as an impact on a business’s finances – will often follow.
Of course, it’s important that any business strikes the right balance with managing absences. Genuine unplanned absences can’t always be avoided, and staff who are ill should be encouraged to rest up rather than ‘soldier on’. But, the downside to this is that it can be easy for a culture to develop where it’s considered “OK” to throw sickies and feign illness to enjoy a day away from work.
Absence management software can help you keep track of unplanned absences accurately, meaning you can investigate the true cost of them to your business. For example, with the in-depth reporting and Insights analytics functions available with Cezanne HR, you’ll have all the HR metrics you need to identify whether you have a problem that’s leading to excess company expenditure, and investigate if needed.
6. Improve productivity and performance
When money is tight, you’ll want all your employees pulling in the right direction and performing at their best. But, if your employees and their managers don’t have consistent performance management processes, track any agreed goals or progress against them, your company’s performance management initiatives may not be fit for purpose.
Performance management software – such as Cezanne HR’s Performance Management module – can help businesses to keep an eye on the productivity and performance of a workforce. They can also give line managers the tools they need to help employees who may be under pressure, set objectives, schedule appraisals, plan career development and monitor progress – all in one central, online hub.
Better still, they can also provide an overview of the skills and abilities available within a business, making it much easier for managers and HR to spot development gaps and plan for succession. This means that a company can potentially reduce their recruitment costs by ‘growing their own’ employees and showing them a path for progression – something employees value more than ever.
That isn’t just great from a company cost-perspective: but, it’s also great for creating more meaningful and cost-effective engagement with employees.