HR management is comprised of thousands of little tasks – each task requiring a certain amount of time to complete. Employers handle the completion of these tasks in a variety of ways; by handling it themselves, having an assistant or office manager help out, or by hiring one or more trained HR employees to run an in-house HR department.
A costly mistake that many employers make is not focusing on the improvement of efficiency in their HR department. HR tasks can include: completing onboarding forms, electronically submitting I-9 forms, entering direct deposit information, helping navigate benefits enrollment and more. Having a person or persons assisting employees with each of these tasks can be extremely costly for employers.
Another HR mistake employers make is to cut critical HR tasks and services in an attempt to save money within their organization. However, the cost of doing so may be even more surprising. Tackling critical HR functions without proper knowledge and education can lead to compliance issues that bring lawsuits, fines and even jail time.
In order to get the most out of your organization’s approach to HR, it’s important to understand which tasks are most costly and find ways to simplify or automate these tasks without creating compliance issues. Below are five of the most commonly performed HR tasks that cost employers money, as well as some ways to improve efficiency.
Onboarding is the process of integrating a new employee into an organization, and it is typically performed by an HR manager or other supervisory employee. The onboarding process encompasses a variety of tasks including: recording and entering I-9 information into the database, recording and inputting contact information and other personal data, recording and inputting W-4 and other tax information, setting up direct deposit accounts, enrolling in benefits and signing and inputting employee agreements. Each one of these separate tasks can cost an employer, on average, from $8.00 up to nearly $11.00, according to the Ernst & Young report. Multiply that by each new employee, and the traditional onboarding process becomes very costly.
Onboarding is one HR task that can easily be automated through Human Resources Information System (HRIS). New employees can essentially onboard themselves through a guided tutorial, while also familiarizing themselves with the same program they will be using for employee self-service and reporting.
2. Payroll and Time Management
Simply getting an accurate paycheck to each employee incurs a significant amount of labor and non labor costs each week. From an employee completing and submitting their timesheets; to the employer collecting timesheets, following up on missing or incomplete entries and then organizing the timesheets; plus the verification of accuracy and then the submittal of all time information to the payroll department – all of this can cost an employer upwards of $50 per employee per pay period. On top of that, the time and effort surrounding the execution of PTO and family leave requests as well as expense reimbursement and mileage reimbursement requests and verification can more than triple this cost.
As mentioned above, an HRIS system is a great option for employee self-service. With integrated payroll processing and time & attendance management, HRIS allows for easy employee reporting and verification and saves employers time and money each and every pay period.
3. Employee Training and Education
Organizations spent $1,296 per employee on learning in 2017 – up from $1,252 in 2016 – according to the Association for Talent Development’s 2018 State of the Industry Report. The type of training directly effects to cost for employers, with classroom-style training being one of the more costly options. Employers who integrate technology-based training programs into their workplace find that they can save money on employee training and education while still giving employees a great learning experience.
4. Performance Management and Reviews
Performance management requires a significant amount of documentation and follow-up in order to avoid employment claims later on down the road. Employers are spending between $12.00 and $15.00, on average, every time they have to document some form of performance management. Annual performance reviews can also become very costly when you calculate the amount of time spent on writing and coordinating reviews and then facilitating review meetings with employees. Some employers have found that a continuous feedback approach can help lessen the time and effort spent on performance management, saving them money and allowing them to focus on the business rather than micromanaging employees.
5. Separation and Termination
Because of the high instance of wrongful termination claims and other employment claims, employers have to be especially careful when initiating an employee termination. The process involves a number of tasks, including: properly documenting reason(s) for separation; preparing, completing and documenting employee exit interviews or surveys; processing COBRA, retirement and other benefit issues; calculating a final payout; ensuring that the employee no longer can access any systems or facilities; and then beginning the search for a replacement employee. It is well known that the cost of turnover is fairly high, but employers can lessen the expense through HR outsourcing and automation.
Not putting enough focus on your HR needs can create costly mistakes, compliance issues, lawsuits and more issues for employers. HR departments are an expense that most business owners would probably like to do without, but proper HR management can actually help businesses save money.
Emplicity understands that HR Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.
NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients. Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients.