Technology

The Cost of Not Using HR Tech? $4.51 Per Data Entry

By

Jennifer Kraszewski

| Jan 7, 2020

This blog post was originally published on Nov. 19, 2018, and updated on Jan. 7, 2020.

We often hear HR technology providers tout the time self-service software can save. It makes sense, given that it automates and streamlines laborious manual processes.

A 2016 nationwide study by HR.com found that to be absolutely true. The large companies surveyed reported that allowing their employees to complete HR tasks through software saves their HR department an average of seven hours every week. In fact, in roughly half of those organizations, the weekly total rose to 10 hours saved!

Related: Every Second Counts … and Costs: Why Everyone Should Use HR Tech

Therefore, we know that when businesses stick with manual instead of going digital, they lose time. But one question remained: How much money do they lose, too?

The real costs

In late 2018, Ernst & Young (EY), one of the world’s leading professional services organization, conducted extensive research into the costs associated with common HR-related tasks. Their study concluded that, on average, a single entry of data performed without the aid of self-service HR technology costs $4.39 to complete, including labor and other costs (e.g., printing, copying and postage).

As if that number weren’t alarming enough, it has increased since the original study. In EY’s updated report, this average cost is now $4.51.

Think about it: Across the entire employee life cycle, every time a person at your organization manually enters data as part of an HR task, it costs the company around $4.51.

Add it up

Note that EY’s average is just that: an average, meaning some tasks carry an even higher price tag! For example, without self-service tech, the cost for each instance of these HR activities is:

  • $19.52 for communicating information to help employees compare plans during benefits enrollment
  • $8.54 to complete a Form I-9 (including printing)

The I-9 figure is particularly troubling, since the form is required for each new hire. For an organization onboarding 200 employees a year, that’s nearly $2,000 wasted annually.

Mind you, that cost doesn’t include the potential risks or fines associated with noncompliance. With 49 pieces of data entry on the I-9, that little form possesses a lot of room for errors when data is manually re-entered or forms are stored physically, posing an even greater risk to your organization.

3 key areas

Among 41 tasks EY examined across all HR operations, the research data indicated three areas with the most potential for cost savings – all areas in which employees can perform with a full-service, single-database software, independent of other personnel:

Even in areas where employees cannot perform tasks completely on their own – such as performance reviews, expense management or time management – substantial time and money are saved when HR tech with self-service functionality is employed.

This tech bypasses the need to re-enter data from paper forms, thereby also bypassing errors that are rife in re-keying.

Empowering employee usage

When employees have the ability to conveniently enter and update their own HR information, the entire company sees the benefit. For example, here’s how Robin Boudreau, New England Patriots’ vice president of human resources, described the effect:

“Executing an employee usage strategy has enabled us to realize an even stronger return on our investment in Paycom, which is realized by our employees self-managing their data, thereby allowing us more time to drive our business objectives forward.”

The bottom line

Based on EY’s findings, two types of organizations have reason to worry:

  • businesses that have yet to purchase self-service software
  • businesses that have purchased it, yet are not fully utilizing it

In either case, a failure to embrace the digital transformation adds needless and hefty labor costs on time-consuming manual tasks – and associated errors – that could be reduced or eliminated with the right HR technology.

About the Author

Jennifer Kraszewski

Jennifer Kraszewski, Paycom’s Vice President of Human Resources, has more than 20 years of HR leadership experience, driving transformative, business-focused human capital strategies in high-growth industries to achieve efficiencies, compliance and employee engagement. Kraszewski holds a bachelor’s degree from Baylor University and an MBA from Oklahoma City University, and is SPHR- and SHRM-SCP-certified.

See more posts by Jennifer Kraszewski