A recent PwC survey found that 42% of executives are currently prioritising cost-cutting. With the cost-of-living crisis and the after-effects of the pandemic, that’s no wonder. But reducing costs doesn’t have to mean job cuts and stalled hiring.

Increasing efficiency and improving productivity are the name of the game. And one of the most effective ways to achieve these goals is with an HR solution. Let’s take a closer look at why an HRIS, better known as HR software, is a must-have for your business.

How HR software reduces business cost?

Streamline HR processes

One of the biggest benefits of HR software is that it allows you to streamline many HR processes. This helps save time and resources – not to mention money. Here’s how:

Automate administrative tasks

Automating tasks like payroll processing, leave management and benefits administration can help you cut down on both time and mistakes. Payroll processing, for example, is not only time consuming but also error prone. That’s partly down to manual data entry but also different pay structures, benefits and tax implications – in short, it’s complicated. Payroll automation, however, flips this on its head, which means fewer costly mix-ups to keep your business running like clockwork.

Reduce HR staff intervention

You can take some of the strain off your HR department by allowing employees to manage their own HR-related tasks, such as updating personal information, requesting leave and viewing payslips – all thanks to HR software. This not only frees up HR staff to focus on other tasks but also boosts efficiency and productivity across your company. What’s more, centralised data makes information easier to manage and retrieve, which avoids HR staff having to search through multiple systems.

Time-tracking and attendance

Keeping track of how much time your employees spend working is naturally vital. However, recording hours manually means a lot of hassle and potentially a lot of mistakes. But that’s where HR software comes in. By having one system to manage time and attendance you can make sure that employees get paid the right amount for the time they work, creating a fair and transparent work environment. Plus, an HR solution can keep track of when employees are not at work – recording holidays, sick leave, and other time-off requests. This makes it easy to ensure you always have enough staff available.

Improve decision-making

HR software brings all your HR data together in one place. This allows you to gain valuable insights from key metrics, spot trends on dashboards or draw conclusions from detailed reports. Let’s look at three concrete examples:

Real-time data

Data-driven decisions are key to success. And access to real-time data allows you to make quick, informed decisions about workforce planning, talent management and employee engagement. This helps you react faster to important changes whilst also improving your operational efficiency, e.g. by identifying bottlenecks. A data-driven approach ultimately leads to better decisions, which in turn lead to better results – giving you a competitive advantage and saving your business money.

Strategic workforce planning

HR software provides insights into workforce metrics like employee turnover rates, performance metrics and skills gap analysis. This is exactly what you need to develop workforce plans to help your business reach its goals. For example, if you notice that a certain department is turning over more staff than others, HR can implement targeted retention strategies to avoid employee turnover and the associated costs.

Talent management

Centralised data makes it easy to identify patterns in employee turnover and track key metrics like time to hire. But you can also find out which recruitment sources are working best. This can help you focus resources on the right areas to attract and retain the best talent. On top of that, HR software also allows you to track the performance of your employees, helping you identify your top performers and address any performance gaps.

Compliance made easy

If you’re still using a paper-based filing system or you’re not quite as organised as you’d like, compliance can be a real headache. Nonetheless, it’s your job to keep your employees’ data safe. The legal consequences of failing to secure personal data are potentially enormous – from fines and penalties to costly lawsuits and reputational damage. Fortunately, an HR solution can help you stay compliant and mitigate these costs. Here’s how:

Automated compliance processes

Staying up to date with labour laws and regulations is an absolute must in HR management. Automated systems can reduce the risk of non-compliance by tracking changes in regulations and automatically updating your compliance processes. Not only does Smart Compliance protect your business but it also saves both time and resources by doing away with many repetitive and time-consuming tasks like data collection and reporting. It’s a win-win.

Accurate record-keeping

Keeping accurate records of employee working hours, leave days and overtime is vital to both comply with labour laws and avoid penalties for non-compliance. Fortunately, HR software can automate your record-keeping to avoid costly human errors and ensure that nothing falls through the cracks. Plus, standardised records ensure consistency across departments helping everything run smoothly – not to mention scale easily.

Storing sensitive data securely

HR software provides comprehensive data security in three main ways:

  1. Encryption ensures that only authorised personnel can access specific information.
  2. Backup systems prevent data loss from system failures and accidental deletion.
  3. Audit trail features ensure everything is recorded to help prevent data breaches.

ISO27001-certified platforms store all employee data in a secure, central repository. You can then access this information at any time and from anywhere whilst still being protected against disasters that could destroy paper-based records, such as fires or floods. This makes HR software indispensable when it comes to secure data storage and management.

Enhance employee engagement

If you’re looking to reduce business costs, employee engagement should be high on your list. After all, engaged employees are more productive, less likely to leave your company and more likely to have a positive impact on your company’s profit. Here are three concrete examples of how HR software can enhance employee engagement:

Personalised employee experiences

Allowing employees to access and update their own information, such as payslips and leave balances – at any time and from any location – makes life easier for everyone and can enhance the employee experience, helping improve engagement. An employee self-service portal also frees up HR staff to focus on higher-value tasks, increasing both efficiency and productivity.

Streamlined communication

Messaging systems and employee directories make it easier for your teams and departments to communicate and collaborate – the heartbeat of your business. This also creates a sense of unity within your company, helping drive productivity. In addition, you can use an HR solution to conduct employee surveys and collect feedback. This helps you better understand how your employees feel and where you can improve. Plus, an open line of communication between employees and HR can boost employee morale, helping reduce turnover rates.

Training and development

HR software often includes a Learning Management System (LMS), which allows you to provide a range of online courses and training programmes for staff. Employees can use these resources to improve their skills and expertise – saving you money on hiring costs. This also promotes a culture of ongoing learning and development, which can lead to happier, more engaged workers. What’s more, your HR team can track employee progress and acknowledge or reward important achievements.

The power of HR software

Switching to an HR solution is a lot like going from manual to automatic. More specifically, from manual to automated processes and from disorganised to centralised data. We’ve already shown how it can improve both efficiency and productivity but here’s a quick recap of the main benefits. HR software can help you:

  • Bring your HR data together in a central repository
  • Make informed decisions based on real-time data
  • Keep track of legal requirements in one place
  • Draw useful insights from a range of data
  • Automate repetitive, time-consuming and error-prone tasks
  • Onboard new employees quickly and effectively
  • Free HR staff to focus on high-priority tasks
  • Visualise data to spot important patterns and trends
  • Enable employees to update their own information

And although a majority of businesses are using HR software, most are not taking full advantage. For example, the CIPD found that only 38.8% are using reward and recognition software whilst just 37.1% are using HR software for workforce planning.

Although the initial cost of HR software might seem high, it more than pays for itself in the long run by helping you streamline processes, improve productivity and ultimately save money. So, if your business is aiming to cut costs and work more efficiently, investing in an HR solution could be exactly what you need.