Return on Investment on HRIS system

In the year 2021, there is hardly any area of life which is not affected by Technology. Influence of technology is so much that decisions are being made based on Artificial Intelligence (AI) data driven approach. Smallest of the items are purchased online and their payment is closed through digital mode. One often checks reviews before they make a decision to buy a product or join a company.

This era can be called as AI era. Therefore using technology in day to day work life is inevitable for 2 reasons:

  1. We don’t want to fall behind our competitors &
  2. We definitely want to leverage the potential opportunities we can gain by reaching out for businesses through globalization.

Most organizations have already moved towards cloud based digitization & if they already have their software in place, they are thinking about upgrading to latest Software Versions.

However any organization will be willing to invest in any asset or business only after knowing the return of investment – ROI. Return on Investment, is the value we get back over a period of time when we invest.

It is difficult to calculate ROI on HRIS system but not impossible, as we can always calculate the costs saved by using a HRIS system.

According to one study, a good HRIS can save time spent on administrative and repetitive activities up to 60%, which is saving good number of man hours spent on these activities which can be utilized for more value added & strategic work.

Let us see how a good HRIS system can benefit organization.

 

Administrative cost & time saved

No. Of Man hours spent on completing administrative activity will be reduced, saving time and also cost of the resource. Same resource can spend time on strategic and more value added activities.

Examples of activities where we can see the difference,

  • Reduce resume short listing time, ATS helps churn through thousands of resumes in a single day.
  • Faster employee query resolution, apps like chat boats help employee from any part of country to connect with HR representative live and get response within no time.
  • Knowledge Management Systems, enable employees to go back to re-refer the data or processes, enhancing learning experience.
  • With the help of software , Manual errors will reduce and cost of repetitive works will be saved.

Employee Reluctance

Some employees may be reluctant to get back to work immediately. For example, employee’s kids are young who can’t be left with care givers or do not have necessary support to take care of them. Some may be concerned about health of themselves or their family members. Undoubtedly there may be many who are eager to get back to office full time or part time.

Wellness & Mental Health

Do you agree, Change is the only Constant thing now?! With so much changing and blended working options, juggling between work and family responsibilities, everyone is going through stress. Even if employees are coming back to office, there is some amount of unavoidable stress, anxiety which may lead to long term ailments. This needs to be addressed with proper support & stress relieving exercises or workshops.

Let’s see a simple way to calculate cost saved

Total Cost of resource working on administrative activity
___________________________________________________________ = Cost per hour work.
Total no. Of hours of work

Total no. Of hours spent on administrative activities * Cost per hour work = Cost saved for the company.

For example, let’s say salary for this role is Rs.20000/- per month (a minimum amount). And this resource work hours are 160hrs per month and out of which 60hrs are spent on administrative and repetitive work (time spent on these activities will be more though).

20000
_________ = Rs.125/- per hour work
160

125*60 = 7500/-

For 12 months amount is Rs.90000/-

This is just one example of cost saved to Organization. When compared to cost invested on Software vs. Cost saved, organization will definitely be in better return on investment

Alchemus, helps you better manage and deploy staff in order to maximize returns from your recruiting efforts and back office operations, while maintaining an edge over your competitors.

We are happy that our clients had a good experience using Alchemu ☺, some of our clients could realize the return on investments upto 400% times within first 1 year of use.

https://harver.com/blog/hris-roi/

https://online.hbs.edu/blog/post/data-driven-decision-making