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Is Your Potential ROI Worth the Investment in HR Automation?

  • HCM
  • Article
  • 6 min. Read
  • Last Updated: 05/29/2015

potential roi in hr automation
HR automation calculators can help you estimate your potential savings. Here's a closer look at how these tools can help business leaders make the right decisions for their businesses and understand their prospective ROI for HR automation.

Table of Contents

Could HR automation offer your business significant cost savings? Most companies understand on a general level that automation can minimize their spending while increasing efficiency. But deciding to make the investment of time and human talent needed to automate your HR processes typically requires a more precise understanding of the potential return on investment. It’s important to take the time to understand the prospective financial impact of automating your HR services, benefits administration, time and labor, payroll and taxes, travel and expense management, and recruiting/applicant tracking. Here’s a closer look at how understanding your potential ROI can give you the insights needed to decide if HR automation is right for you.

Benefits Administration

Benefits administration takes a significant amount of work, from interfacing with employees to managing communications with your vendors. Determining your potential ROI from automating benefits administration requires taking several factors into consideration. For example, how many new hires do you have each year? How many benefits carriers do you have and how much communication do they require? How many employees are eligible for benefits? What is your average annual number of terminations? Finally, what’s your average hourly compensation for the individuals who handle benefits administration? This data can be calculated to determine how much your company could save overall by automating this important process.

Time and Labor

Time and labor systems are essential for a wide range of internal processes, from managing schedules to processing payroll to reporting for compliance issues. Managing these processes manually is incredibly time consuming and opens you up to the potential risk of errors. By looking at a number of elements, including your company’s number of hourly employees, the average compensation of hourly employees, and pay periods per year, you can begin to understand how automation could save you both time and money. Additional factors to consider include average minutes lost per employee, calculation errors each pay period, and how much time is spent per pay period managing time cards. Together, this information can be used to help you project your potential savings.

Human Resources Automation

Answering employee questions and handling the administration that goes with the human resources function is a key part of running your company. Most HR departments today have fewer staff and more responsibilities than ever before. Automation can not only save you money, but allow your employees to focus on higher-value, higher-ROI tasks. When determining how much HR automation can save your business, it is important to look at your number of employees, how many new hires you have annually, the number of HR/payroll/benefits administrators working for you, how many managers and staff have access to self-service, and average employee hourly compensation.

Calculate your potential savings with HR automation here.



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* This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.

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