Investing in HR technology is something that is typically taken with great consideration. After all, the investment is high and thus produces downtime and needs perfect system training. Additionally, investments can be a difficult sell for those outside of your department as others may not see why technology is important or useful. If you’re thinking to get a new technology or pitching the idea to the management, it can be tough to put a number to the difference it will gain, or confirm your purchase by showing its return on investment. There’s no transfer of funds in your department, no sales numbers and no revenue or losses (in the conventional sense), so how do you calculate the ROI it will provide?
First, you’ll want to examine your current position in relation to the operations that the new technology will touch and examine what the technology would do for each area. Below are the three factors to consider and how to determine ROI from them:
Time
Time is one of the reliable ways to demonstrate the difference that technology will perform as it is simple to put a financial value on time. Consider which activities will be automated, estimate the amount of time each of your employees delivers doing those things now and use your average employee salary to manage the cost savings. Also, consider how much time will be preserved by those outside of your department through easier approval methods and less paperwork.
Employee satisfaction
What would it imply to your employees to be satisfied by having less paperwork load or even have a copy that they didn’t want to kick on a regular basis? Don’t underestimate the fact that your HR team understands what else is out there may get fed up with operating for an organization that obviously doesn’t place enough value on the department to invest in something that would make their jobs easier. Also, the evidence that you are cutting edge is a primary selling point for recruiting.
Hiring success and turnover rate
Hiring success and turnover are challenging to predict or measure, but this is one area that will be conclusive sometime after you adopt the new technology. Recruiting tools, spending in more advanced and intuitive job boards, adding analytics and improving your HR software all have an effect on the types of workers you recruit, how long the hiring method takes and how well you put up with the employees once they are hired. This can be a primary cause of the new technology or a decision of having more time to sharpen candidates due to time-saving technologies.
Get ROI Help from Your HR Technology Partner
Measuring HR technology ROI isn’t always easy, so don’t be shy about asking for assistance. Whether you are just beginning to explore video interviewing software, build a trusted partner already or are looking to upgrade, your vendor should be capable to help you calculate the ROI of their technology. Measuring the market value of this modern Talent Acquisition strategy will encourage your continued efforts to make quicker, better decisions across the organization.