Welcome to the very "furst" edition of The Furst Look: Conversations with Revolutionary Leaders. My…
HR professionals everywhere are hoping for (and hopefully planning for) a healthier budget in the coming year. Just think of what more funding could do. You could update the company hiring site, develop more brand-building strategies, and maybe offer a more attractive benefits package. That's just the beginning.
You could also invest in new HR technology. Its positive ripples could be felt throughout the department and all the way up the executive chain, and that's key. The more you can demonstrate the benefits of directing a little more funding your way, the more it may seem like an investment instead of just another cost.
Programmatic technology makes your job easier. Now it's time to show them how it benefits the company's bottom line.
Free Up HR Time for Innovation and Strategy
Company executives may not be entirely sure how the human resources department spends its time. So it's not easy for them to understand how an investment in better technology could equal more innovation or why innovation in HR matters at all.
Technology doesn't just make the usual processes, such as sourcing and screening, more efficient, it frees up time for the HR department to work on other things. For generations, the central role of human resources was finding people, interviewing and hiring them, managing benefits and the usual, expected tasks. Innovation can bring sweeping, positive changes to the organization.
Head Off the Costs of Attrition Before They Begin
Think about all of the pain points that HR handles every day and how they branch out to affect the company's bottom line. Turnover is a good example of that domino effect.
When one person leaves, that creates a new position to fill, which brings more hiring-related costs and a lack of efficiency in the missing worker's department.
A temp worker may be necessary, so there are those costs to consider. Or others in the department may pick up the slack until the position is filled, leading to less efficiency with their own workload, stressed out workers, low morale, and possibly even more turnover.
A recent CAP study showed the average employer incurs these costs whenever an employee leaves for good:
- As much as 16 percent of a low-earning worker's salary
- As much as 20 percent of a higher-earning worker's salary
- A stunning 213 percent of an executive's salary
If an executive leaves the company, the cost to replace them could run into hundreds of thousands of dollars. If lower-earning workers have high turnover, the few thousand it costs to replace one worker could add up to a similar amount.
Every domino in that row can affect the company's bottom line in a positive or negative way. The ability to intervene early puts the company in better control over costs instead of putting out fires when they start and spending much more than necessary on the whole process of sourcing and hiring.
If HR has access to new technology, talent management could be more proactive. Data and predictive analytics helps HR forecast with better precision, which opens new doors to innovation and strategy. Strategy is proactive.
Use Available Data for Better Projections and Processes
Those who can mine data and process it can use it to their advantage. Technology keeps improving, giving HR more ways to understand what's really going on under the surface. The more you know, the more you can step in before another fire starts. Intervention is one of the most powerful tools you have in preventing unnecessary costs.
On the surface, data reveals patterns that could help you spot more issues that need attention. You might know that a certain percentage of new hires don't make it to their three-month anniversary. Data could give you clues as to why, which gives you more opportunities to change turnover stats for your company and prevent unnecessary hiring costs.
Here are just a few of the patterns you might discover:
- New hires that come from a certain source often don't work out
- New hires brought in through referrals tend to fit the company and stay on board longer
- When a manager leaves, you experience turnover throughout the department
- New grads leave after one or two years with the company
The list of possibilities isn't what's important at this stage. What matters is spotting a trend and being empowered to do something about it. Doing something might mean shifting your sourcing strategy. Using data-driven recruitment and job matching technology, you could cut sourcing costs by minimizing ads that go nowhere and focusing on channels that historically give you better talent. Better talent equals better profits. Or doing something could mean implementing employee engagement strategies that head off attrition before it starts.
Suddenly, company executives see that HR isn't just a hiring department, but a solutions department. Technology helps you save money on unnecessary turnover, but it also makes money by building better teams that stay on board longer.
Get Ready to Show Your Work
Without the data to back them up, all of the talking points about technology, innovation, and strategy are just that: talking points. A strong advocate for HR technology shows how those points translate to dollars and cents, direct and indirect costs.
Direct costs are a lot simpler to enumerate. A new ATS had a price tag, as does revamping the hiring site because of what the data about candidate behavior shows. Indirect costs are harder to quantify, but they have the potential to really drive home your point.
Let's say technology gives you data that shows you're lacking in top talent applicants. Data also shows hiring site traffic falls off before users have a chance to become leads or applicants.
Berkshire Associates talks about hiring site optimization. An outdated hiring site won't get the search rankings you need and it can turn off visitors before they turn into leads or applicants. How much talent is lost because the website isn't user-friendly?
Further, what does the website do for (or to) the employer brand reputation? According to a new Career Builder survey, over 70 percent of American job candidates won't apply with a company that doesn't have a great reputation. If your company is struggling to find top talent, and who isn't right now, losing 70 percent of potential applicants to a poor brand image is a painful and costly cut.
Technology is a given, but just because HR has technology doesn't mean it's the best that they can do. Better technology offers more data and better tools to use it. Your case for investing in technology doesn't have to be a stretch. It's real. And while some of your points aren't easy to quantify, the effort to do so pays off.
Technology helps you source and hire better. It gives you insights into candidate behavior and trends within the company as well as throughout the industry. Technology equals information, and that puts HR in a position of power to affect the company's bottom line in a positive way.