How do you measure the ROI of HR software for small business?

HR software is also a tool with which the company engages with employees. It is a touchpoint in the employee experience and the delivery of service excellence.

To achieve scalability, efficiency, effectiveness, and compliance, technology is crucial despite some reluctance from leadership to invest in new tools. Relying on manual HR processes requires additional staff to manage them, leading to indirect costs such as management spending time on HR tasks. While investing in technology may seem costly initially, it can ultimately be more cost-effective. Moreover, manual processes can result in miscommunication, lack of standardisation, errors, and mismanagement, which can negatively impact the employee experience. Therefore, implementing HR technology can not only save time and costs but also improve the employee experience by streamlining processes and reducing errors.

As a small business owner, your time is your most valuable asset. If HR software for a cost centre frees up your time to focus on revenue-generating activities, it's worth it in my eyes.

It’s important to know where the business is going and how quickly it’s growing. A lot of HR software prices by employee count or candidate count so your cost may go up unexpectedly if the growth isn’t taken into account. The needs of HR software for a 50 person company is different from a 500 person company. Know what’s the most critical problem to solve and start there. Instead of focusing only on what’s painful for HR, be sure to ask the business leaders what’s impacting their top or bottom line in terms of talent. Find a software to solve those problems.

When selecting an HR tool, prioritise those with strong integration capabilities and flexibility to suit your processes. It should also be compatible with your existing systems architecture, including other HR tools like payroll and performance management, as well as service delivery and project or task management tools such as Jira. This is important as HR processes involve multiple teams (think onboarding, for example). Also, consider the cost of the tool and its ability to adapt to changes in your business. If your company is still growing and evolving, opt for tools that allow for monthly commitment rather than multi-year agreements with a minimum base price. This will ensure you have the flexibility to adjust as your business changes.