The high (and often hidden) cost of not investing in HCM technology

“Our people are our most valuable asset.” Every business leader says this about their people, but what does this mean, exactly? How does this translate to the day-to-day work of your human resources (HR) team, who are responsible for managing your people? 

If people are the most important asset in a company, it follows that the people in charge of the people must have the right tools and technology to get the best results. While nearly half of HR leaders cited that HR technology is their priority,¹ translating the business case for HR technology projects into a language that senior executives and decision-makers can understand and effectively evaluate is still a challenge. 

For example, investing in an enterprise resource planning (ERP) system, design tools, or hard assets such as plants and machinery can give an accurate cost estimate in terms of increased productivity and/or cost savings. In terms of people, however, it’s harder to see the return on technology investment because the result of HR investments, such as “improved morale” or “greater employee satisfaction,” do not always have an equivalent tangible result or quantifiable financial data. 

We say “not always” because, while it’s not easy to put a number to the benefits of HR technology investment, we could look at it from another angle: the quantifiable cost of not doing anything.  

Consider the cost of hiring the wrong people, having disengaged employees, or the time spent on rework — each of these can translate into a financial value. How about looking at the cost of hiring more frequently to replace burnt-out or dissatisfied employees who leave the company prematurely?  

Hiring the best people, managing them, and developing their skills is crucial to your business' success. Here are three key areas where technology can add real business value to counteract the high, often hidden, cost of doing nothing. 

Hiring: Making a good impression before day one 

Employee satisfaction, or lack thereof, starts before an employee joins your company.  

Today’s labour market is highly competitive. Companies often lose candidates before they even schedule an interview. The average time to hire has reached an all-time high of 44 days, and this doesn’t include highly specialised roles and upper management positions that could take up to nine weeks (67 days) before it gets filled.²

It’s not just the stiff talent competition that’s influencing this, but an overall decreasing global worker supply. According to our 2023 Executive Survey, 66% of leaders surveyed have experienced a labour shortage in the past 12 months, and 88% said that it’s likely that the shortage will continue. With all these factors influencing the hiring process, companies without a system to organise a candidate’s recruitment experience are already lacking even before the employee starts their first day. 

Manual, paper-based processes don’t cut it today. A lack of responsiveness can make all the difference when it comes to securing and engaging the right talent for your business. A more effective recruitment process run by your HR team supported by technology can help you avoid costly agency fees, while ensuring the process is well managed for all applicants.  

Managing: Engaging employees with less admin 

HR professionals walk a fine line — they need to be there when employees seek support, but they also must get out of the way and let people do their jobs with minimal admin burdens. With manual processes and outdated systems, friction is often created and engaging with HR can become challenging for current employees and job candidates. 

Getting a job offer signed is just the beginning. The first three to six months of an employee’s tenure in the company is a critical time, since up to 20% of turnover happens in the first 45 days,³ and 17% of new hires leave the company within the first three months.⁴ Employee dissatisfaction and turnover can happen for a variety of reasons, from a mismatch in hiring expectations to a tedious recruitment and onboarding process to a lack of communication. 

Using HR technology helps streamline onboarding, time and attendance, payroll, and performance to make it easier for employees to interact with HR as required. Onboarding can become more than just another administrative task involving filling out required forms or hosting a one-day orientation. Instead, you can create a memorable employee experience as soon as the candidate is hired. 

Time and attendance can be a tool to empower employees to manage their own time by having instant access to their leaves and shift schedules, and this feeds instantly into payroll, so their pay is always accurate and compliant with local regulations. Additionally, ensuring all these processes are connected turns performance management into a living and breathing process, so employees are able to hit their performance goals and know they will be appropriately recognised for achieving them.  

Unified employee management technology tools also blow-up silos so your business has a holistic view of your employee data to make smarter, data-driven decisions. HR and management teams will be on the front foot, and you can avoid dissatisfaction with missed review dates or unclear goals. Employees who know they are recognised and appreciated will be more engaged and contribute to the success of your company. 

Growing: Developing your people to grow the company 

Do you know what your employees aspire to achieve? Are their career goals aligned with your business goals? Does your training program match the right people to the right learning and development program? 

While it is important to manage your employees effectively, HR's job doesn’t end there. Being aware of your team's personal and career aspirations is essential to helping them grow. In fact, 84% of employee respondents in our 2023 Pulse of Talent report said that having a career path would make them more loyal to their employers, yet less than half said their employers understand their career aspirations. 

So, there is definitely room for improvement in how HR can help develop employees to grow the company, and it starts with knowing more about the employees. HR technology allows you to capture the information you need about where your employees want to go and the skills they want to develop. With this information, the system can help create personalised learning plans according to their aspirations, along with providing access to formal, social, and online training. Understanding your employees’ aspirations, talent profiles, and flight/retention risks ensure you always stay on top of your workforce. 

A singular view of employees helps you focus your resources on those who are aligned with your business and goals. Together with various workforce planning modules, this becomes a powerful tool for employee development and succession planning. Your employees will appreciate recognition of their personal goals and your investment in their development. Lack of investment can almost guarantee good employees will leave, while investment in training and development will help ensure they stay and thrive. 

The time to act is now 

It’s easy to let inertia or other priorities prevent you from investing in technology to empower your HR teams and help them manage your people effectively. Taking action can be difficult, and implementing new technology and systems can be challenging.  

But the status quo can also be very costly. Outdated manual and cumbersome processes and systems create friction and lead to high costs. Poor hiring choices, lack of employee engagement, and high staff turnover will cost your business now and in the future.  

If people are truly your most valuable asset, you need the right technology to hire, manage, and grow them effectively. 
 

Discover how Dayforce can help you hire, manage, and grow your people with world-class HR, payroll, talent, workforce management, and more all in one platform.

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[1] Mary Baker & Teresa Zuech, “Gartner Identifies Top Four HR Investment Trends for 2023,” Gartner, March 2023.  
[2] Dexter Tilo, “Time to hire hits all-time high,” HRD Asia, June 2023. 
[3] Arlene S. Hirsch, “Reducing New Employee Turnover Among Emerging Adults,” SHRM, June 2016. 
[4] Roy Maurer, “Onboarding Key to Retaining, Engaging Talent,” SHRM, April 2015.