Self Service HR Automation gives your organization much more than surprisingly quick Return On Investment (ROI)

Traditionally automation of HR and Payroll are seen by organizations as a necessarily evil, an investment that has to be done from a statutory compliance perspective, or to ensure that payroll occurs on time. This was true, primarily because HR & Payroll applications were used only by HR and Payroll personnel as a back office operation. This situation changes drastically when HR Automation is made self service. Employees directly accessing HR self service systems gives organizations oodles of benefits and with it surprisingly quick ROI. A back of the envelope calculation here shows ROI in two months!

Of all the benefits the most important one is time saved by employees. Detailed below are many functions that are present in good self service HR products like ours (KServeHRMS) which employees can access without having to meet the HR function, saving them considerable time

• Leave request, cancellation, modification
• View Payslips
• Update address and personal details
• View bulletins
• Make claims
• Request for infrastructure or other support
• Update performance appraisals
• Make a complaint
• Submit a HR request (any other HR form)
• Make declarations on Income Tax
• Check your tax liabilities to optimize tax

 It is not just the time for making the request, but also the time taken to meet supervisors, wait for appointments, and go back and forth to verify balances before the approval is obtained. Now, for each of the above, consider also of the time saved by the supervisor in approving, rejecting or clarifying these requests. In addition, include the time saved by HR, Admin and Payroll personnel is automatically getting reports for all these automated processes.

Let us make the following assumptions to calculate ROI for an Indian context.

               

• These ‘click of a mouse function’ saves  a conservative 5 minutes of time for every employee in a day which is about 1% of an employees time (it will be much more for employees on the move)
• Let us assume the cost of every employee to the company (salaries plus overheads) is on average Rs. 50,000/-
• The savings per employee therefore is around 500 Rs per month (1%) or Rs 6000 per year.
• For 500 employees the savings is 2.5 lakhs per month or 30 lakhs per year

If this company spends 500,000/- on employee self service software for its 500 employees, the ROI will be obtained in 2 months after the system is operational. In advanced countries where salaries are higher, ROI is even better, but this is offset by higher software costs. The time for ROI can still be the same in any country.

Consider also the intangible benefits to the company due to employee satisfaction and brand building.

• Transparency in obtaining standard services
• Not having to stand in a queue to meet supervisors for approvals
• Immediate access to information like payslips, leave balances, IT dues enabling better decision making

The next argument is in terms of risk of success. The risk of success can easily be mitigated by verifying the past track record of the provider,  and if required choosing a SaaS model where the investment can be paid installments. There should be no reason for any organization with more than 200 employees not to use self service HR systems, especially if your employees are highly paid.

It is good to see many organizations realizing this and investing in a system.

 

At Kallos Solutions and KServeHRMS (www.KServeHRMS.com) it is our honor, and pleasure to have made these benefits accrue to many organizations so far.