The Real Cost of Using Manual Processes

Kevin Nguyen
October 15, 2021

HR departments are responsible for overseeing many different aspects of an organization’s workforce spanning the entire employee lifecycle from employee onboarding to eventual employee separation from the company.

Some employers may decide to make an investment in a full-service Human Capital Management (HCM) software solution.  However, despite the existence of self-service HCM software, many organizations still manage common HR functions through manual processes and/or require the time and effort of individuals within the organization other than the employee. 

To better understand the total costs (both labor and non-labor) associated with completing HR tasks, Ernest and Young surveyed 504 individuals in a supervisory role who work at companies based in the US with employees between 250-4,999 that handles HR tasks such as:

A few things stand out from these results 

  • Labor costs constitute nearly all of the total costs related to all of these tasks – this suggests that an ability to reduce or eliminate the time associated with performing these tasks could result in significant cost savings
  • The area with the most potential cost savings is benefits enrollment, particularly around tasks related to providing plan information to employees, whether to inform them about plan changes or providing data to facilitate comparisons between plans.
  • Interestingly, onboarding tasks are generally less expensive than tasks related to employee separation.

In the report, the average cost of a data entry for common HR tasks was $4.39 – and some HR tasks require several data entries! The average costs of some crucial HR tasks were much higher than that:

  • $15.76 to track (FMLA) or other leave time
  • $14.75 to collect/organize employee timesheets
  • $18.69 to calculate PTO balances and update an employee

Interested in learning more?

Download the FULL WHITEPAPER here.