How an HR Software Helped an SMB Save $175,000 in One Year

The consultant had just taken up a position as Director of Human Resources in a manufacturing company of approximately 100 employees. She immediately noticed that she and her manager were not on the same page.

Indeed, the HR department was not managed the same way as other departments. The manager quantified his objectives and measured their achievement using indicators through different management tools (CRM, accounting and payroll solutions…). However, for HR management, no effective system was in place. Indeed, before the consultant’s arrival, there was no human resources manager and employee records were stored in multiple Excel files, making it challenging to measure HR indicators. Therefore, there was a need to optimize the company’s HR management through the use of comprehensive technological tools.

After discussing this issue with her manager, the consultant looked at the various HR software options that could provide the indicators she needed to measure HR data effectively. She selected a comprehensive and affordable HRIS (Human Resources Information System) for SMBs that could fully meet the organization’s current and future needs: Folks HR.

Using Folks HR, these key indicators were measured:

1. Turnover rate: 15%
2. Absenteeism rate: 8%
3. Workplace satisfaction rate: 80%

In short, the process was as follows:

1. Implementing the Human Resource Software Folks HR
2. Measurement of key indicators: turnover rate, absenteeism rate, job satisfaction rate, time management (absences, vacations, disability, work-related injuries), employee performance reviews, etc.
3. Targeted interventions by the human resources consultant based on the indicators measured initially.

Want to know more about key HR metrics for the manufacturing industry? Feel free to read our article on the topic!

1. Decreased the turnover rate from 15% to 5%, saving over $100,000.
2. Decreased absenteeism rate from 8% to 3%, saving more than $10,000.
3. Increased workplace satisfaction from 80% to 95%, leading to an increase in productivity of 4,000 hours per year for a savings of $65,000.
4. Total savings of more than $175,000 in the first year.

Since a single departure costs on average between 0.5 and 2 times the departing employee’s salary, a reduction in turnover can save a company several thousand dollars.

The same goes for the absenteeism rate, which, more often than not, is closely linked to a poor work climate and costs the employer an average of 5% of its payroll. Thanks to the satisfaction survey included in the new software platform, the consultant was able to assess the workplace environment. She then targeted strategic plans that increased employee engagement and subsequently decreased absenteeism.

All these factors contributed to time optimization and improvement of the organization’s overall productivity.

Indeed, a decrease in the turnover rate means less time spent on the recruitment process and more time to optimize employee performance management and business processes! 

More concretely, the consultant calculated time-savings of 4,000 hours in one year by comparing timesheets from two consecutive years. Production was the same from one year to the next and the product did not change. However, in the second year, employees worked a total of 4,000 fewer hours than in the previous year.

Therefore, Folks HR has clearly become an essential tool to help the consultant achieve her objectives, particularly in:

• Providing her with indicators to guide her strategies;
• Allowing her to measure the impact of her actions on the overall health of the organization by comparing different indicators over time;
• Simplifying HR management by centralizing all employee data in one place;
• Adding value to the HR of the organization.

In addition to the significant savings in time and money, Folks HR’s many features brought many benefits for the company in terms of employee data management. This would not have been possible without our affordable and efficient human resource management system!