Published On February 27, 2019Many business leaders will require a strong business case for HR automation before committing to it. Here’s how to make that case.
Human resources (HR) professionals have recently been focusing more on the strategic aspect of their job to become better strategic partners. In some cases, however, this shift in focus has allowed the administrative aspect to fall by the wayside. Hence, many organizations are entrusting these administrative duties to HR automation.
A Business Case for HR Automation
Nevertheless, some organizations are skeptical of automation, believing it would demand additional resources. Many business leaders will require a strong business case for HR automation before committing to it. A sound business case should discuss:
- Cost savings — For example, say the out-of-pocket expense for a new hire is $5,000. With automation, it could be $4,000, generating a cost savings of $1,000, or 20%.
- Productivity increase — Say each new hire generates $10,000 per week during full productivity, but only $6,000 per week during 10 weeks of training. Automation would enable new hires to become fully productive in six weeks, adding $4,000 per week, a net gain of $16,000 worth of productivity.
- Return on Investment (ROI) — In our example, there was a $1,000 cost saving per new hire, a $16,000 gain in productivity, and an HR automation investment of $500 per new hire, netting an ROI of $16,500 per new hire.
Implementing the Tools
Once your organization has decided to adopt HR automation, start off on the right foot by:
- Evaluating HR practices using a flowchart to determine which are most suited to automation
- Training the HR professionals in your organization to use the automated tools
- Strategically planning technology purchases to save even more money in the future
As your organization gets accustomed to the automated tools, discover ways to use them to develop and deliver meaningful analytics that will serve you going forward.