Employee Management, Small Business

3 Ways You Can Reduce HR Costs

  • Lawrence Ward
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  • December 19, 2017
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Human Resources is seen as a necessary administrative overhead that can easily become bloated. It too often becomes an inward focused organization that fails to consider the value it brings to the organization and its literal cost. Here are three ways you can reduce human resources costs. Some of these solutions are readily implemented anywhere while others require careful evaluation of your existing infrastructure.

Ask Your Employees

Are you trying to fill a position in the company? Before you set up a job requisition or contact a recruiter, ask your employees what improvements they’d like to make to Human Resources. Are there rules and regulations they think could be eliminated, reducing HR’s workload and simplifying their lives? For example, could management sign off on training below a certain cost instead of requiring it to go through HR?

One company found that rules mandating they track their labour in fifteen minute increments interfered with productivity, whereas entering timecard information at the end of the day was sufficient. Many organizations have found that adding labour charging information to work assignment systems or shop floor data management tools allows workers to automatically log time worked correctly except for the time they aren’t logged into the system, checking out work to do. This significantly reduces the errors and time spent tracking labour charged while reducing the burden on HR and payroll to determine what people are doing and managing work schedules.

Adopt Internal Social Media

You can’t post company proprietary information on the general internet. You can set up an intranet and use that for company communications. You could post company newsletters or HR forms on the internal intranet while employees can access it on their schedule. Don’t forget to post critical information online where everyone can view it like instructions on how to fill out common forms or tax form information.

Automate Onboarding

Onboarding is the process of turning a new hire into a functional employee. The onboarding process starts with adding them to the payroll system, creating a badge to get them in the door and assigning a workspace. It continues with company mandated training, legally required training and anything else someone needs to know. Automation tools can standardize this process by providing automatic checklists for each employee based on their job title, sending orders to other departments like requisitioning a laptop or requisitioning a uniform.

Where possible the HR system should include applicant tracking that flows into the onboarding system, all while connected to your financial software. If you adopt a new software tool or interface, build existing checklists and procedures into the new system to minimize training time. Automated tools that cannot share data become a burden on HR, such as when you’re manually entering data into the HR system from the applicant tracking system.

While HR can easily become expensive, there are many ways you can diminish the administrative bloat. Keep the above advice in mind and consider investing in software to streamline everything.

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