Building A Business Case For Investing In HR And Payroll Software

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Introducing payroll and HR software into a business is likely to deliver many benefits such as improved service, greater efficiency, increased productivity and a reduced risk of non-compliance and errors. But in the short term it will involve cost, both the investment in the software and also the time and effort needed to get it up and running.

That’s why it’s important to build a business case about why introducing HR or payroll software (or both) is the right choice for your business. You’ll need to start off by analysing the way things are done currently and that will involve gathering together some key information.

How much time is spent updating, reconciling and maintaining HR/ payroll data?

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To establish how many hours could be saved, you need to know how much time is being spent currently on all HR or payroll data compilation and management activities: for example, chasing up and completing timesheets, inputting employee record data, payroll processing and creating reports. Examine how much time is lost on duplicating data across HR, payroll and any other departments. How about time spent requesting authorisations or compiling reports that are required too?

Choose a period of time to note down the time spent. It could be a real eye opener into how much time is disappearing on certain activities. These kinds of KPI measurements will make it easier to pinpoint the repetitive, labour-intensive payroll and HR administration and transactional activities that could be made more efficient.

Factor in current costs as well: from employee costs and maintaining and updating legacy systems to the cost of printers and paper. It all adds up.

What’s the risk of non-compliance and errors?

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What kinds of risks are inherent in the current way your payroll is run? What about non-compliance with the raft of payroll legislation – are your current processes and people set up to effectively keep on top of changes? How much time is it taking?

In HR terms, what compliance issues could arise? What are current capabilities like when it comes to processes such as tracking mandatory refresher training and ensuring all necessary right to work checks have been completed?

How many errors creep in to HR or payroll processes? See if you can quantify them and note the time needed to sort them out. It’s harder to quantify the impact on employees but it needs to be considered for a complete picture. At a practical level, missed payments can threaten an employee’s financial security. Errors in payroll and HR can ultimately affect engagement, productivity and even retention – that’s something that might show up in exit interview conversations for instance.

What do you want from your future HR or payroll software?

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Once you’ve carried out this analysis, you’ll have a clearer idea of where your HR and/or payroll processes are today. The next question is where do you want them to be in the future? Investing in software doesn’t simply mean ‘automating’ old processes. It’s a chance to look at what can be done differently and better.

Should you opt for integrated HR and payroll software?

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Could this be the right time to introduce an integrated HR and payroll software solution? Many companies do not always consider them at the same time yet given the level of overlap between the two functions, it can result in a far better information flow and even greater reduction of inputs and error risks. It’s always possible to integrate further down the line but at additional cost and with more disruption than if done together.

Improved allocation of time and resources

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Many companies need to do more with less and streamline their processes. Software, with the associated reduced levels of manual processes and data entry, will help reduce hard costs.

But also consider the benefits of freeing employees up to get more involved in strategic work and projects. What kind of value could be added by reducing the transactional and spending more time on transformational activities?

Better informed decision making

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HR and payroll software reports will be based on data that won’t have been input multiple times. Information will be considerably more up to date, facilitating rapid and real-time analysis rather than needing all the information to be gathered in before report production starts. That ensures greater accuracy and will elevate your company’s decision-making capabilities.

In many instances, the software can be made accessible to other authorised people too, removing the need to request reports in the first place and enabling them to interrogate the system as needed. It’s not just for managers either: employee mobile self-service can be a route to greater employee engagement and empowerment.

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Finally, include in your business case the fact that a good software provider will ensure the software is kept up to date as the legislation changes and should take care of all aspects of compliance. It should also offer flexibility, and the ability to scale up in the event of your company expanding.

It can be useful to include vendor proposals when making your business case so if you’d like some more advice from us or guidance in terms of how our HR software or payroll software systems can help you then please do get in touch with us.