Transforming the HR Department into a Strategic Profit Generator by Leveraging Technology

HR’s biggest challenge today is maximizing return on investment (ROI) on Human Capital. Not only is HR tasked with attracting top talent; it must also transform the HR Department into a Strategic Profit Center by leveraging technology to manage people, process and strategy

HR Technology provides powerful tools for saving money and deploying resources better such as controlling the high costs of benefit enrollment and utilization and reducing errors in time and attendance reporting. The greatest opportunity is reducing the waste and increasing the benefit of the money the organization pays people.

The numbers should be obvious: salary and benefit dollars are about 25 – 50 times the amount spent on all HR, and about 200 – 500 times the amount spent on HR technology. Only about 15% of HR spending is on technology. If you can make HR 10% more efficient you might be able to justify HR Technology increases of 50%. If you can use technology to increase the return on people by only 1% you can easily pay for tripling the HR technology budget.

Smart technology use can reduce waste by at least 1% of salary in most companies and can increase benefit much more. Some ways to reduce waste of dollars:

• Fix poor reporting and errors in payroll
• Track and enforce eligibility for health care in real time
• Use on boarding to reduce the provisioning cost for new and transferred employees
• Assure prompt termination of expenses (including overlooked items like phones, subscriptions, and blackberries) through proper off boarding.
• Integrate accounting for all employee expenses.

Use technology to cut payroll costs or unemployment and increase perceived benefit:

• Facilitate payroll tax-exempt benefits like transit checks and employee health savings
• Provide for voluntary time off without pay for periods where low demand may lead to layoffs or unprofitable work.
• Support strategic management of temporary, project staffing, and outsourcing providers

Profit from technology by ensuring you get the time you pay for.

• Use on-boarding tools to get people up and running from day one.
• Manage overtime through time and attendance systems
• Enforce absence management policies and unpaid leave
• Support return to work to eliminate disability costs.

Profit from technology by deploying people for more production

• Ensure hourly workforce availability for manufacturing, service and financial businesses
• Link project management tools to staffing to fill critical gaps and anticipate readiness for new assignments
• Create contingency workforce capabilities for seasonal and unexpected demand
• Provide disaster recovery and emergency response staffing flexibility

Profit from technology by increasing the value of human capital

• Provide and ensure learning
• Streamline performance
• Build a pipeline of talent inside through career and succession planning
• and outside the company through recruiting and talent

Cumulatively the provable opportunities are typically in the two to three percent range of labor spend and the soft dollars can be much more. A public company that can reduce its labor costs by 2% per unit of revenue can expect share holder value to increase by at least 10%.

HR Technology can customize the software and analytic tools currently available in the market to make these opportunities a reality.