How to measure the ROI on HR tech

When it comes to investments, HR has had to learn how to talk numbers. As HR leaders move into a more strategic role, we need to start thinking about measurable ROIs on people initiatives – and new technology.

Paul Burrin, VP product & marketing at Sage People – and speaker at HR Tech Summit Toronto, talks HRD through big numbers.

“Investing in your people is one of the most important business decisions an organization can make,” he explained. “Get it right and your business will thrive. Yet we all know HR and people teams are in fierce competition for that all-important slice of budget.

“Vendors will often set out the ROI of their technology or system based on existing customers. For example, a commissioned study conducted by Forrester uses a robust Total Economic Impact™ methodology to set out the costs and ROI of deploying and using Sage People. The study found:

• Total benefits of $2.0m
• ROI of 62%
• Payback of investment in 12.5 months
• The biggest saving comes from automating HR and People analytics

“Don’t forget, though, to assess ROI in the context of your organization’s needs. Set out your goals, or the impact the technology is having, for your company. As well as savings made from consolidating systems, include time savings – and the impact of the ability to free up time to work on more strategic projects too.

“The highest ROI will come from systems which automate HR tasks, freeing up your team’s time to concentrate on the more important things, like building great workforce experiences for your people.”

When you’re taking new investment ideas to the C-Suite, it’s important to remember to sell, sell, sell. As Burrin pointed out, the HR department is just one of many fighting for some much-needed budget – so try and point out the ways in which this new piece of tech will revolutionize your company, rather than just complicate processes.

One method is by looking at change management.

“The world of work is shifting and changing at a phenomenal pace,” added Burrin. “The make-up of a company’s workforce and how, when, and where it works has fundamentally changed – and today’s workforce is more diverse, mobile and technologically-enabled than ever.

“For the first time, the workforce is comprised of five different generations, all working side-by-side, and all coming with varying expectations and standards. Workstyles continue to evolve. The contingent workforce is growing and becoming more diverse to include agencies, freelancers, gig workers and job bidders, presenting challenges to the way leaders manage their teams and track performance.

“With these rapidly shifting dynamics, businesses find themselves at a crossroad. Employers need to embrace new technology to get ahead in this new world of work and put people at the heart of their strategy. Yet, the reality is that most HCM solutions are struggling to keep up with the rapid pace at which technology and digital ways of working are evolving, becoming outdated and no longer fit for purpose.

“Leaders therefore must think carefully about the changes they want to make and look to a solution that will not only solve their immediate problems but withstand the test of time.

“If we think about the characteristics of a ‘People Company’, then technology is pivotal, and they invest in technology that will growth with them and help solve these challenges: creating meaningful, positive workforce experiences; using the power of your employer brand; making decisions based on analytics and People Science; swapping annual appraisals for continuous conversations; embracing flexible and remote working [see fig. ‘How HR is changing to People’ below].

“At the centre of that is automation. Truly progressive People Companies are getting ahead by automating transactional processes, freeing up lost time on admin and leaving their leaders free to focus on what really matters: their people, and building great workforce experiences for them.”

To hear more from Paul Burrin, and other industry leaders, book your ticket to HR Tech Summit Toronto here.