HR Strategy

Your Company Uses Too Many HR Systems (and That Costs You Big)

By

Rod Lott

| Feb 18, 2019

When companies use multiple systems to track and complete HR tasks, three things rise (productivity not among them):

  • data errors
  • wasted time
  • noncompliance risk

It would be nice if employers could calculate the associated cost. And now they can, thanks to two things:

Late last year, Ernst & Young released findings of a comprehensive research study it conducted to determine to-the-penny costs of manually performing more than 40 HR tasks without fully automated, self-service software. In summary, the average data entry cost was found to be $4.39; most of which is pure labor.

More systems, more problems

Entering data isn’t cheap, especially when the data requires re-keying into another system or two. Or even 15, which is how many systems of record today’s average large corporation has, according to a 2018 Deloitte report.

Think about that. Instead of enjoying the seamlessness of one HR technology application, organizations are dealing with 15 separate systems! That means instead of entering a new hire’s personal and work eligibility information once, it may have to be done more than a dozen times. If it’s entered incorrectly, those errors are multiplied as well.

Ernst & Young discovered one of the most common HR tasks that carries a double-digit error rate is the completion of the Form I-9. Form I-9 mistakes take an average of 17 minutes to fix; multiply that time by the average hourly wage of those who correct those errors ($24) and the labor cost of corrections adds 77 cents to the cost of labor for I-9 input, for a total of $7.85 per form.

Areas of savings

Although onboarding plays a big part in making data re-entry among multiple systems uncomfortable, it’s hardly the only area. Paycom’s calculator also takes into account benefits enrollment, expense management, time management, performance management, training and even off boarding. (And believe it or not, off boarding tasks generally cost more than onboarding ones, per the research.)

Enter just six numbers and our multiple systems calculator instantly tallies how much money you’re wasting. A PDF showing the full cost breakdown can be downloaded as well, to help make the case for transitioning to a single application.

About the Author

Rod Lott

As Paycom’s Editorial Manager, Rod Lott brings more than 25 years of experience in marketing, advertising, branding and journalism. A published author and a graduate of the University of Oklahoma, he has worked with such brands as Blue Cross Blue Shield, Sonic Drive-In and OU.

See more posts by Rod Lott