In a tumultuous economic climate, it’s not hard to understand why many HRIS (human resources information system) and other people tech projects get put on hold. It’s, unfortunately, one of the most common outcomes for plans to make your HR more digitally advanced.
After all, it can be easy to see cost cutting, or moving budgets toward other projects, as the best solution when global finances take a turn. Surely your HR system isn’t in urgent need, especially when other parts of the business are looking for funds too – right? Undoubtedly, some of you have already heard these arguments.
But doing nothing comes with costs of its own.
The truth is that there are hidden costs and hidden risks to HR and payroll technology not being given its dues. Here are some of the ways that doing nothing can cost way more in the long term:
The main reason that your last people tech project faded into the ether is likely to be reactive decision making. That means not making a decision until you absolutely have to, which is an unhelpful position for any choice you make. There are two ways reactive thinking can impact the decisions made around HR tech: projects getting dropped and projects getting mishandled.
First, despite the widespread benefits that a well-implemented HR tech project can have, they are often sidelined during times of stress. And, unfortunately, the last several years have been rife with stress for businesses in every sector. The most recent economic downturn has pushed a lot of HR projects out of the priority spotlight. The good news here is that there is a solid opportunity for companies to embrace their HR advancement and become more competitive workplaces through tech.
When you are working with the pressure of reactivity, it also becomes easier to make mistakes, forget important information or miss key outcomes. And when that happens with HR tech, everyone in the company is impacted. Taking a proactive approach can make a huge difference in the success of any people tech implementation. Doing nothing, on the other hand, can force you into a reactive situation, resulting in messier, less effective decision making.
Read more: Making the case for change – Tips for creating an HR tech business case
Another stress point that can keep people tech projects from moving forward is money. But this, too, is shortsighted. While there will always be some costs associated with change, it can be hard to visualise the costs associated with letting change pass you by.
It’s tempting to think that leaving things as they are means you can’t lose money. After all, you’re not adding to your costs by doing nothing – right? Well, that depends on the way you think about costs. For example, many teams think that moving from an on-premise system to a SaaS (software as a service) system will be more costly and complex. But that isn’t necessarily true. In fact, these days, SaaS solutions are usually more cost effective, more scalable and adaptable, and more accessible.
And that’s not the only way you’ll lose money by sticking with a system that isn’t fit for purpose. Even a delay of a year or two can dramatically increase the costs of an implementation. Both because the prices for software tend to rise and because your legacy systems will still need maintenance. Not to mention the non-monetary costs of staying put.
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The costs of doing nothing risk more than direct spending. Your outdated systems, spreadsheets and comms channels put your business at risk of cyberattacks, non-compliance problems, difficulty for your employees and people hours lost.
Outdated systems, spreadsheets, and insecure communication channels put your data at risk. And when data is worth more than virtually any other commodity, that’s a dangerous situation to be in. And, when it comes to your HRIS, a breach there can put huge amounts of data at risk. Not only can it impact your employees and cause huge amounts of upset internally, but it can also spread into company and, potentially, customer data.
Neglecting digital security in any area of your business can cause reputational harm and risks longer term damage. And it’s no different for your HR tech. These issues can cause problems of non-compliance with regulatory bodies and can prevent some organisations or customers from feeling confident working with your company.
Beyond the risks to finances and data, not having an effective HRIS or payroll platform can really slow your team down. Even if you just consider the time that your HR team have to spend on managing daily tasks, you’re talking about an average of 6 hours per week on processes that could be automated or sped up. Over the year, that is 312 working hours. We don’t need to tell you what additional work you could get done if your team weren’t bogged down in admin!
On top of the time wasted, using outdated and manual processes can have a surprising impact on your team’s morale. Clunky processes and poor user experiences can lead to frustration and dissatisfaction with the company. And not having a way to easily view and understand your people data can lead to missing those all important signs of dissatisfaction. Meanwhile, having a single source of truth can improve decision-making and give your people team the insights they need to keep your workforce not just functioning, but thriving.
Moving toward a SaaS solution for your HR tech is particularly advantageous. And, truthfully, on-premise solutions are becoming a thing of the past. Instead, you’ll likely have a cloud-based piece of software that gives you a lot more flexibility. These types of solutions are also better for changing business needs. As your company scales and grows or the business’ needs shift, you’ll want something that can easily adapt and grow with your company.
Of course, even if you’re already on a cloud-based system, you likely have seen that all platforms are not created equal. Which makes finding the one (or ones) that best suits your business needs critical. Instead of changing the overall type of system, you’ll want to focus on specific requirements.
When changing your people tech, it’s also important to consider the benefits you’ll get from the project. And, once you’ve identified them, start thinking about how they impact the bottom line. Your new software could result in streamlined processes, saving money by enabling your team to spend more time on meaningful work.
Similarly, you could be empowering your employees with self-serve tools, freeing up even more time and giving them a sense of control over their own time, development or resources. These changes can help keep employees happy and loyal, again saving on the cost of high turnover. For every benefit of the new system, think about the financial gains you make through implementing it.
The cost of doing nothing is substantial and can jeopardise the success and sustainability of a business over time. But by prioritising these digital HR and payroll projects, your organisation can remain competitive, mitigate risks and, ultimately, become stronger.