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$4.78: Ernst & Young Reveals the Climbing Cost of Manual HR Processes

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    Manual HR processes cost businesses efficiency and chip away at the bottom line. According to Ernst & Young, the average cost of a single HR data entry task has climbed to $4.78. Read the implications this rising figure has on operations — and what employers can do to stop this unnecessary profit leak.

    Regardless of industry or size, controlling costs is a must for any business. To keep expenses in line, the first step is identifying them. Some costs are easy to recognize; raw materials for a product or overhead expenses like rent or utilities, for example.

    But some expenses may silently creep into a business and slowly consume resources without being noticed. For instance, take the cost of HR pros manually entering and managing data. According to the latest findings from Ernst & Young (EY), organizations that don’t use self-service HR software face a constantly rising price.

    What was EY’s estimated cost for manual HR data entry?

    In its 2023 research, EY found performing a single manual entry made by an HR pro of data without self-service technology carries an average estimated cost of $4.78. The figure includes the labor and non-labor costs required for all the steps in the process, including:

    • producing the forms (plus related costs for printing, copying and postage)
    • double-checking the accuracy of the data
    • transferring the information into an HR system

    While these manual activities may seem minor, the costs they incur can have a serious impact. On top of the frustration they create by saddling employees with tedious tasks, they consume time, energy and financial resources your HR staff could otherwise be directing at high-level activities like professional development, recruiting or retention.

    Not only do these costs add up, but — thanks to inflation and technological advances — they appear to be on the rise. Here’s how the estimate has climbed since the study’s first iteration in 2018:

    EY’s Average Cost of a Single Manual Entry of HR Data
    Year Cost
    2018 $4.39
    2019 $4.51
    2021 $4.70
    2023 $4.78

    With a clear upward trend, you owe it to your operation to find a remedy sooner rather than later. Every day you don’t act unnecessarily drains your bottom line.

    EY’s findings about the big-picture cost of manual HR processes further drive this point home. Overall, it found that the average cost per HR task, which included common functions like benefits enrollment and time management, has continued to increase across every category of HR data and, in some cases, is as high as $21.18 per data entry.

    How do businesses reduce the cost of manual HR data entry?

    The most direct approach is to consider the usage of HR tech — specifically, empowering your employees with self-service HR software and automated processes is the best defense against those quiet, hidden costs.

    Employees know their HR data best, and they want their information to be correct, so if they’re charged with entering it into the HR software, less time will be spent down the road fixing mistakes.

    How to calculate and measure the ROI of HR software

    If we’re able to quantify how much money you’re wasting, then we should be able to tell how much you could be saving, right? That’s where Paycom’s Direct Data Exchange® comes into play. A full-bodied HR information system allows employees to self-manage their HR data, from time worked, benefits and expenses to contact information and even payroll.

    Housing all these tools under one digital roof provides a valuable opportunity to track real-time employee usage of the system. Direct Data Exchange proves HR tech’s worth by monitoring that employee usage and providing easy-to-digest statistics on a dashboard, offering leadership a clear view of the ROI being delivered by their HR tech.

    Even in a world of rising costs, it’s good to know the expense of manual HR processes can be identified and even controlled. With the right tools, you’ll be able to drive dollars to the bottom line, one data entry at a time.

    Curious to learn more about the possible costs you expose your organization to when you don’t take advantage of HR tech? Read our guide to learn the other hidden ways your business loses profits to the wrong tech.

    DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.