HR Technology – Is It Worth The Investment?
In my role as CFO at Exude, each day I must help make decisions on how to allocate the financial resources of the firm to ensure its success. When it comes to decisions regarding employee related expenses, (for our firm, like most organizations, this is our largest expense) I always ask the question, “How will this support the recruitment, retention and engagement of our employees to achieve organizational performance?” This leads to a review of our HR function/processes as well as the metrics we need to use to ensure we are leveraging our dollars to most effectively meet the HR needs of the firm.
One investment that we know is important to leverage our dollars is in HR Technology. In talking with other firms, I have discovered that allocating a budget to upgrade or implement HRIS Technology can be low on the prioritization list. HR functions should no longer be viewed as administrative overhead but strategic partners in optimizing the talent strategy of an organization. However, often HR does not have the appropriate technology platform to efficiently manage the life cycle of an employee. Think about the resources required to recruit, on-board, develop, and engage employees if an integrated technology platform does not exist today in your organization. Couple this with the way people live and work today in the digital environment, where the norm is having everything accessible within seconds on their smartphones. Technology is transforming the HR function as HR leaders are focused on reducing the cost of transactional activities to focus on the strategic initiatives required to driving organizational performance. As HR leaders evaluate the need for technology, below are a few questions to consider from a CFO’s perspective:
- Why invest now? What will the technology investment do that the HR function can’t currently perform?
- How are the goals of an HR technology investment aligned with the strategies of the organization?
- Does the investment clearly have a timely impact on the bottom line? Is the benefit of the investment to increase efficiencies, improve quality or drive growth?
- Can the success of the technology implementation be measured for effectiveness (i.e. retention of key talent), efficiency (i.e. cost-per-hire) or impact (i.e. productivity, performance)?
Ultimately, “If you can’t measure it, you can’t improve it.” – Peter Drucker. Identifying key metrics is essential to identifying how a technology investment can improve HR delivery and to articulating the cost benefit proposal for a HRIS investment.