At the CIPD conference 2002, Jennifer Denson of Microsoft Business Solutions gave a presentation giving ‘a practical insight into choosing the right HR and payroll application for a positive impact on the bottom line.’

Whether implementing a new system, or putting one in place for the first time, Denson highlighted the fact that many HR professionals involved in such a project are asked to put together a business case before Finance Departments and Senior Managers will give the system the go-ahead.

According to her, there are two main factors which will impact on this:

The speaker went on to look at three key areas where cost savings could be made by implementing an HR or payroll system, highlighting where these savings could be identified and quantified:

Employee turnover

Costs of turnover can be quantified by costs of recruitment, management interviewing, new joiner training and potential lost opportunity costs (i.e. the cost of having a new person in the job).

An HR system could help by analysing and reporting on turnover and allowing access for managers to personal development tools – identifying training needs, succession planning etc. It can also provide a useful way of analysing compensation and benefits, another reason why staff choose to leave, and systems can be used to implement flexible benefits across organisations.

Manager efficiency

Although this is less easy to quantify, managers can spend a lot of time looking for information on which to base decisions on resourcing. An HR application can allow access to real-time information which is accurate and up-to-date, and easy to get hold of and in particular, allow access to information about individual team development, salary reviews and appraisal records. It can also free up HR time, which is often spent tracking down this information for managers – returning to the question about whether HR is seen as strategic can provide a clue to whether a system is likely to be seen as important by decision-makers in an organisation, according to Denson.

Cost of absence

Managing absence can be measured in terms of lost productivity and replacement staff costs, but there are also issues surrounding employee motivation and cultural absence – is there a culture of taking a ‘sickness entitlement’, for example. An HR system can help to look at these by establishing firstly whether there is an issue with absence, tracking and reporting, understanding patterns and help to put in place targets and incentives to reduce these.

Would you like to find out more about E-HR? We’ll be adding more on this topic in the coming months, do e-mail the editor if you’d like to find out more.