ROI on HR Technology, what works and how to measure it
After chasing a senior candidate for three months, the HR head of an IT company closed the position with multiple negotiations and several follow-ups. She was looking forward to getting positive feedback from her boss. But the CEO asked you have closed a senior resource, but what ROI will he bring to the organization?
She replied, “Investing in our people is the most significant decision the company can take. If we hire the right people for the team, chances are high that our business will flourish.”
Over the years, HR managers have adapted technology to rationalize operations, support data-driven decision-making, and ensure compliance, while software vendors have increased the pace of innovation and also the complexity of their solutions.
The ROI challenge before HR managers is to meet the increasing demand of the company and to get it done with the limited resources.
There is no doubt that technology is a boon, and that applies to all the other segments in the organization as well. Tech plays a vital role in the day to day operations of human resource function-from managing the attendance to up-skilling the workforce. With tech coming in play, it makes the entire human management system more robust.
Technology does not give you direct ROI when introduced in the system, but it gives you an upper hand to generate good ROI at the end of the financial year. When technology is introduced, it automates HR tasks, freeing up different teams to concentrate on the more critical things which can add more value to the company.
HR professionals go through various mundane tasks- from onboarding of the new candidate to looking after the attendance after every month and also to booking last-minute tickets. These administrative and operational tasks take the maximum chunk of their working hours.
The appropriate measurement
Measuring ROI in HR is still debatable because mostly, it is considered intangible, and most of the HR tech initiatives are subjective. But, it can be understood that there are various steps which can help the organization understand their ROI for HR Tech.
Save manual hours- If invested rightly in different HR processes, it saves their time and effort of the people with simple automation in HR.
Traditional hiring – With simple introduction of AI and chatbots, organizations are saving thousands of hours and dollars in their hiring process. The HR manager can come to the picture at the last stage and finalize the candidate.
Employees’ feedback- Companies are investing smartly in tech- using a Chabot for rewards, recognition, and feedback is the latest trend. One saves time and gets honest feedback from the employees because they have to share it with the machine and not human.
The elements mentioned above may not impact the ROI directly, but they definitely enable the organization to measure ROI as correctly as possible.