HR automation can take care of administrative tasks, reduce human errors, streamline compliance reporting, and more.
As an HR manager, you know your team is already spread thin, especially if you’re a small or medium-sized business. HR teams are responsible for everything — from the traditional HR tasks to managing your employer brand and remaining up to date with the ever-evolving compliance landscape. You know a human resources information (HRIS) system would go a long way in automating and streamlining your function’s tasks, freeing up hours to focus on more impactful initiatives. Now you just need approval. Consider these factors as you go about building a business case and consider ways to measure the ROI of HR automation.
1. Automate tedious HR tasks
According to G&A Partners, HR teams without HR automation spend up to 73% of its time on tedious administrative tasks such as:
- Managing employee PTO requests
- Handling proper compliance reporting
- Calculating payroll taxes
- Managing onboarding and offboarding
These aren’t cognitively challenging tasks per se, but they can be complicated and time consuming when handled manually. By automating administrative tasks through an HRIS, HR managers can devote their time to higher-level business strategy and HR initiatives that require a uniquely human touch, like:
- Employee engagement
- Talent acquisition
- Employer branding
- Learning and development programming
By automating administrative tasks through an HRIS, HR managers can devote their time to higher-level business strategy and HR initiatives that require a uniquely human touch.
All of the above are key to building a content, productive, and engaged workforce. While there will always be some administrative tasks that must be handled manually, HR automation frees up valuable time in the day to focus on HR strategies that contribute directly to the company’s bottom line.
2. Enable employee self-service
Employee self service (ESS) is a common component of HR automation. An ESS portal allows employees to:
- Make changes to contact and banking information
- Submit time-off requests
- Handle benefits enrollment autonomously
- Access scheduling
- View company documents and policies
While employees may still need HR’s help completing some of these tasks, enabling employees to self-serve further decreases the burden on overworked HR teams, thus increasing the potential return of HR automation.
Consider the example of departing employees. Employee termination comes with a lot of paperwork, most of which could be automated through an HRIS. Once an employee submits their notice through the ESS portal and a date has been agreed upon, the HRIS can trigger a series of system workflows that will inform the correct persons and teams. Finance will receive notice in advance to request and organize final expense reports, while IT will receive notice close to the departing employee’s final day in order to set timelines for email and systems access deactivation.
3. Reduce data errors
The likelihood of human error while working with data in spreadsheets is between 18-40%.
Without HR automation in the form of an HRIS, your HR team is likely relying on a patchwork of manual processes and disparate systems to manage the function’s broad range of responsibilities. But humans can make errors, especially when it comes to data. A 2008 paper published by University of Hawaii Professor Raymond Panko found the likelihood of human error while working with data in spreadsheets is between 18-40%.
An HR department that lacks automation relies on a lot of manual data transfer, like translating employee time sheet data from the company workforce management system to the payroll system, for example. This is a process which leaves the margin for human error very high. Data errors are often time-consuming to remedy, and can get expensive, fast. A 2018 data entry error by a Georgia Charter School related to teacher healthcare coverage cost the school $2.3 million, prompting a request to state lawmakers for aid.
Automation reduces error, providing more consistent and accurate incomes. That means HR spends less time fixing mistakes, and more time focusing on what matters: people.
4. Ensure proper pay and withholding
Consider the cost of incorrect pay and withholding to employers when calculating the ROI of HR automation.
Employees rely on their employer to provide proper payment for the work they’ve completed, as well as to withhold the correct amount for state and federal taxes. But unfortunately this doesn’t always happen, negatively affecting both the employer and the employee.
Forty percent of SMBs incur an IRS penalty averaging $845 for mismanaged payroll every year, and according to a 2019 Deloitte’s survey, “35 percent of [payroll] respondents indicate the accuracy of withholding calculations for regular or supplemental pay is their greatest challenge.”
And issues with employee pay denigrate the trust between employers and their workers. “Pay defines the employer/employee relationship,” wrote Mollie Lombardi, cofounder of Aptitude Research, in The New Demands of Payroll. “Exchanging something of value for the time and labor of another human is the most essential component of what work is.”
With the right HRIS, payroll syncs to HR, so there’s no disconnect between tracking hours or changes to salary and benefits, and no need to manually transfer data between systems or functions. Employees are paid on time and correctly, every time.
5. Gain confidence about compliance
Always changing, and with regulations and requirements on the local, state, and federal levels, compliance can become a black hole of HR’s time and energy. And the stakes are high: the fines for a lack of compliance can be potentially ruinous, especially to SMBs.
When you’re building a business case for HR automation, compliance can be a key component because “[Data shows] The greater the potential of a project to reduce risk, the greater the potential return,” as wrote Rebecca Wettenmann, vice president of research firm Nucleus Research, in an HR Executive article.
HR automation can help HR teams and managers streamline compliance requirements and reporting. HR can use the HRIS to collect tax forms during onboarding, store all the required employee documentation in one place, and e-file the required IRS forms, among other compliance-related tasks. Most HRISs update regularly to reflect legislative changes and ensure documents are submitted in the correct format.
Reap automation benefits
Life at a small business is busy, especially if you’re a small HR department or one-person team. Automating HR through an HRIS frees up time to focus on more important organizational initiatives, reduces the potential for human error, and helps employees get paid correctly, and on time. Compliance becomes a non-issue when the system streamlines reporting and makes it easy to share the proper notices. When building a business case for HR automation, dig into these areas to calculate ROI.