We often hear about HR technologies and the value they bring to the organizations that use them, but what about the facts? This case study, conducted by an external human resources consultant, highlights the various positive impacts that implementing an HR software has had on an SME, including $175,000 in savings in just one year.
How an HR Software Helped an SMB Save $175,000 in One Year
Having just taken up a position as Director of Human Resources in a manufacturing company of approximately 100 employees, the consultant immediately noticed that, in the organization’s current circumstances, she and her manager did not speak the same language: HR department was not managed the same way as other departments. The manager had the habit of quantifying his objectives and measuring their achievement using indicators and, to do so, used different management tools (CRM, accounting system, etc.). However, on the human resources side, a similar exercise would have been tedious and, above all, ineffective given that no system was in place. Indeed, before the consultant’s arrival, there was no human resources manager and employee data was stored in numerous Excel files, making it difficult to measure HR indicators. It was clear to her that there was enormous potential for optimizing the company’s HR management.
After discussing this issue with her manager, the consultant looked at the various HR software options that could provide her with 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 in terms of HR management: Folks HR.
Using Folks HR, these key indicators were measured:
- Turnover rate: 15%
- Absenteeism rate: 8%
- Workplace satisfaction rate: 80%
- Implementing the Human Resources Information System Folks HR
- Measurement of key indicators: turnover rate, absenteeism rate, job satisfaction rate, time management (absences, vacations, disability, work-related injuries), performance appraisals, etc.
- Targeted interventions by the human resources consultant based on the indicators measured initially.
- Decreased the turnover rate from 15% to 5%, saving over $100,000.
- Decreased absenteeism rate from 8% to 3%, saving more than $10,000.
- 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.
- 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 HRIS, the consultant was able to take the pulse of the organization and the workplace environment to target interventions that increased employee satisfaction and decreased absenteeism subsequently.
All these factors contributed to improving the organization’s overall productivity. In fact, a decrease in the turnover rate means fewer departures to manage and new employees to train, thus saving time. In addition, it has been proven that happy employees are more productive. Therefore, it can be concluded that an increase in employee satisfaction and a decrease in absenteeism have led to an increase in the company’s overall productivity. The consultant calculated the savings of 4,000 hours in one year by comparing timesheets from two consecutive years. In terms of quantity, 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.
Folks HR has become an indispensable tool to help the consultant achieve her objectives, particularly in :
- Providing her with indicators to guide her interventions
- Allowing her to measure the impact of her actions on the overall health of the organization by comparing the values of the different indicators over time
- Simplifying HR management by centralizing all employee data in one place
- Adding value to the HR of the organization
Interested in discovering how a human resources management platform like Folks HR could contribute to your organization's success?
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