HRMS Can Be More Than An HR Department Productivity Tool
The effectiveness of human resource management software is usually judged by how much more efficient the HR worker becomes and how the software helps the HR department accomplish daily tasks. In this post, we take a look at another measure of HR system effectiveness – the return on employee investment. We will show how an effective HR system can help you find and retain talented employees and ensure that employees achieve their maximum potential.
Investing In Employees
A company is only as good as its employees. An organization does not generate ideas or give service, it is the people within the organization who make those things happen. Organizations can pay competitive wages and offer good benefits to attract talented workers. However, too often little attention is paid to assisting the individual to perform to his or her potential. A significant portion of the value of your Sage Abra software lies in how it helps your organization find and retain talented employees. From recruiting to training and orientation, from motivating and developing talent to supporting managers in creating an engaged workforceóthe effectiveness of employee management has a direct impact on your business results. You can consider the cost of a human resource management system, such as Sage Abra HRMS, as an investment in your valuable employee resource.
Engaging Your Employees
Disengaged employees are estimated to cost the U.S. economy as much as $350 billion per year in lost productivity, accidents, theft, and turnover. Engaged employees have a high level of commitment and involvement in the organization and its values. Organizations that can establish trust between the workforce and management, and among coworkers, create an engaged workforce and the benefits that go along with it. Investing in employee engagement increases workforce retention and thus decreases employee turnover costs.
Employee Replacement Costs
Employee turnover is a very large and often underestimated cost for employers. There have been a number of studies that estimate the cost of replacing an employee. These studies show that the average cost of replacing an employee is between 30 and 50 percent of the annual salary of entry-level employees, 159 percent of mid-level employees, and up to 400 percent for specialized, high-level employees.
Increasing Employee Retention
While some turnover is unavoidable and sometimes even desirable, reducing turnover among your top performers is worth the investment. Studies show that the most common reasons for leaving include: lack of respect, poor communication, pay that is below market, lack of training and recognition, excessive workload, lack of tools and resources, and lack of teamwork. Employees will be motivated to stay at a company when they feel comfortable, respected, fairly compensated, and where they see possibilities for growth and personal development. Here are some areas an employer can invest in to reduce employee turnover rate.
HR or employee analytics can help management decide where to invest, identify the top performers, determine what employees need to best perform, and what they value. Analytics also provide a consistent way to monitor the results of any measure taken.
Poor communication causes frustration and misdirected energy. HR departments can greatly enhance company communication by publishing company values, vision mission, and important announcements. Sage Abra self-service portals can be used to distribute information to employees to help them feel valued and in the know.
Employee recognition programs can motivate workers and increase their level of engagement. Sage Abra can help managers know when goals have been met that merit recognition. And self-service technology can help the HR team communicate employees’ successes to coworkers.
Good training programs can help employees acquire the skills needed for new projects and challenges, or even a promotion opportunity within the company. Management training also can increase employee retention. Train great managers and your company can enjoy better employee engagement and lower turnover. Sage Abra can help the HR team plan employee training goals and programs, as well as track critical certifications and skill sets.
Compensation and Benefits
Without an adequate and competitive package of compensation and benefits, it is difficult for any company to hire or retain top talent. Here we list a range of benefits for you to consider:
- Holidays, vacation, and sick leave compensation
- Flexible working hours
- Retirement plans
- Life insurance
- Medical and dental insurance
- Tuition reimbursement
- Discounted insurance, savings clubs, employee loan programs
Sage Abra can help you determine the most popular benefits programs by tracking what is most selected by employees during open enrollment. It also can generate reports about the cost trends of your benefits programs based on current and historical data.
Reducing Sick Leave
Sick leave is a popular benefit for all employees. However, missed work time and increased insurance costs are expensive for an organization. Whether higher than average use of sick leave is health-related or due to a pattern of abuse, a company can actively reduce absenteeism. Sage Abra provides information about absences to managers, making it easier to identify and address possible patterns of abuse. Company-sponsored employee wellness programs can promote better health.
Talent management refers to the process of developing and retaining current workers and attracting highly skilled new workers to a company. Skilled workers only become top performers when their goals are aligned with business objectives and their energy is directed at the right targets. Talent management starts with a performance appraisal tool or process such as is available for Sage Abra HRMS. Businesses that use performance appraisal and management software show a reduction of low performers, while the percentage of high performers in the company increases.
The Whole Picture
Investing in employees reduces employee turnover, sick leave, and healthcare costs. Investments in training, talent management, communication, wellness programs, and technology all have a positive effect on workforce performance and productivity.
Through employee self-service, training, development, and compensation and benefits management, systems like Sage Abra HRMS and integrated tools can help keep employees engaged and satisfied. These systems also deliver the analytics needed to help managers and executives examine trends, support business decisions, and plan for future organizational changes. Please call us with your questions.