The top five hidden costs in
human resources, and how
to avoid them
In your HR department, you may fall victim to some of these costly—and common—
practices. The good news? They are all pretty easily solved or eliminated with
the right processes and applications in place. So take a few minutes, and ask
yourself if these top five money drainers are taking over your office.
1. Do you spend most of your time on recruiting and onboarding new employees?
While recruiting and onboarding are top priorities for HR departments, often a lot of time is
spent on inefficient, document-intensive processes to support these initiatives. By replacing
manual processes with automated, electronic processes, you can focus your efforts on employee
engagement and productivity to help retain those individuals you’ve spent time and money
bringing to the team. According to the Center for American Progress, the average cost of
replacing an employee amounts to 20% of the person’s annual salary. By implementing new
technology, your HR department will move past processing paper to become a more strategic
partner in the organization.
2. Do you find yourself jumping from one system, to another, and then another?
Recruiting, benefits, onboarding, employee management—all of the tasks associated
with these common HR processes are likely happening in different software solutions or
systems, which could be draining resources. According to Price Waterhouse Cooper, one of
the improvement opportunities for HR departments to have sustainable cost reductions is to
deploy technology to maximize consistency, efficiency and functionality. An integrated enterprise
content management (ECM) platform allows you to create electronic employee files and access
them from your HRIS, recruiting system, performance review solution—any software you use. The
platform effectively bridges the gaps between these systems so you can access documents and
information in one place, which ultimately creates a smooth transition from process to process.
And, by being able to track and log documents between systems more easily, you can simplify
HR audits and collection of documents for litigation.
3. Are you overloaded with paperwork?
Shuffling paper, doing data entry, searching for files and documents—these are all time-consuming
tasks that might be draining unnecessary resources. To be as productive as possible, you could
replace some of your daily processes with efficient, automated solutions. According to Oasis
Solutions Group, switching to online benefits enrollment can shorten the enrollment cycle up to
50%. Other solutions, such as content management, intelligent data capture or enterprise search,
can streamline a specific task or process step to help free up time and resources to be spent
on more impactful HR actions.
Top 5 Hidden Costs in HR
4. How effective do you feel your data protection and security
measures are?
In our modern society, “HR” is synonymous with “sensitive.” There is personal
information and sensitive material that needs to remain confidential, yet available
to appropriate personnel. In an independent study of 46 organizations by the
Ponemon Institute LLC, on average, the non-compliance cost is 2.65 times the cost
of compliance. With a records and information management technology solution
in place, you can securely manage the entire lifecycle of information, ensure
compliance with industry and government standards, reduce the risk of litigation,
and effectively manage the disposition of sensitive data—all while saving a serious
amount of cash. Plus, a system with rigorous user authentication and authorization
technology gives you control over who can access what, when.
5. Do you own the access to employee files?
At many organizations, the HR administrator is the only person with access to
an employee file. This means a lot of time spent answering inquiries. Forrester
Research found that, on average, more than 50% of an HR department’s time is
spent processing employee information and answering questions. By implementing
electronic employee files and an online portal, you can empower your employees
by giving them access to their own benefits and information—which drives efficiency,
saves time and money, and enables HR staff to devote their time to more impactful
activities, such as recruitment, employee engagement and retention.
By examining your daily HR processes and tasks, you are bound to find some
specific areas that could use some fine-tuning. Often—once you can find them—it’s
these hidden costs that are the easiest to fix. There are many technology solutions
available for HR departments, and selecting a scalable system that integrates easily
with your existing applications and is adaptable to your unique processes is key. But
once you’ve got effective solutions in place, your team will have more time to think
and act as a strategic partner in the organization.
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