For many businesses, payroll is a significant operating expense. That's why it’s important to assess your payroll software, HRIS, or HR payroll system's return on investment (ROI) and compare it with marketplace alternatives—in a way that makes sense to finance, accounting, and HR professionals, such as CFOs, so leaders can make the right business decisions, especially ones that ensure time and cost savings to hit the bottom line in a small business or a big enterprise.
This results in better HR management, HR initiatives, and decision-making in human resources and beyond. Payroll management matters, and so does its ROI.
An ROI Calculator can also help measure direct and indirect costs. These costs may include automating workflows and administrative tasks, onboarding, benefits administration, etc. But it's easier when it's in an all-in-one HR platform like Rise! This will have a knock-on positive effect on employee engagement, employee satisfaction, employee retention, and employee experience.
When building the ROI business case for payroll, you must consider many different things, including assessing your HR payroll system and comparing solutions. Here are 6 questions to ask yourself to help you make the best choice. Let’s make things easier for HR teams and payroll teams.
1. How Productive is Your Current Payroll System?
Running payroll involves many steps and touches many parts of your organization, so it’s important to examine your entire process end-to-end to understand your level of productivity. Start by looking at how much time and effort you spend collecting gross data for running payroll, including timesheets for hourly employees.
Next, try to determine how long it takes to perform a pay run and how quickly and easily you can identify and resolve payroll errors, which are usually human errors due to manual data entry or outsourcing. Can your payroll software streamline this?
Have you considered how much effort is required to run payroll reports? An all-in-one solution that combines payroll with HR, time tracking, and group benefits can improve productivity by reducing the amount of time spent on duplicating data.
2. How Accurate is Your Payroll System When Calculating Your ROI?
Although the true cost of errors may be more difficult to measure, a strong ROI depends heavily on the accuracy of your timesheets, tax withholdings, holiday and overtime pay, deductions, and more. This determines your overall profitability, too.
When assessing your ROI, consider the accuracy of your current system against a payroll system integrated within an HR platform. This integrated sharing means a seamless sync between data, helping to reduce administrative work and ensuring the most up-to-date information is always used when running payroll.
3. Are You Duplicating Your Efforts or Spending Too Much Time on Payroll?
Take a closer look at your current payroll system. Does it provide a single source of truth that collects accurate employee time with little or no effort? Can you easily create and distribute pay statements and effortlessly post them to your payroll GL?
Next, consider all of the HR data that feeds into your payroll system. Does your current payroll system require you to manually update employee information that is kept in another HR platform? Are you manually importing timesheets? How much time do you spend entering and reconciling group benefits every time you have a pay run? Add up the number of hours you spend on any of these tasks per pay run to help calculate your ROI.
These may not seem like useful metrics, but they are! Trust us.
4. Are You Overlooking the Power of Your Payroll Reporting System When Calculating ROI?
How extensive are your payroll reporting capabilities, and how much time and effort is involved in generating the reports you actually need? Some payroll systems provide custom reporting—but at a price. Can you create your own reports? Or are you forced to wait for your payroll provider to generate them for you while you wait?
Often, payroll providers limit the number of custom reports that you can generate, charging fees for their reporting services and for running the volume of reports that you need. All of these extra costs are important to consider when assessing your payroll system.
5. What is the Overall Cost of Your Current Payroll Process?
How well do you really know the true cost of your current payroll process? All costs include software and hardware to printing and payroll services fees. Consider every cost involved when evaluating your own HR payroll system against other systems, including cloud-based ones that often follow different pricing schemes.
Some HR systems offer more transparent and simplified pricing than traditional payroll systems, such as pricing on a per-employee and per-pay-run basis. This makes it easier to understand what you are spending and helps you forecast your ROI for the future based on real-time employee data.
6. Is Your Current Payroll System or Process Putting You at Risk of Compliance?
Non-compliance may incur a soft cost when calculating your ROI. The possibility of non-compliance means there’s a potential risk of incurring fees or penalties from the CRA due to incorrect tax withholdings. Also, if your time tracking system is not seamlessly integrated with your payroll system, mistakes and misclassifications can wreak havoc on your organization and quickly cost you a bundle when you least expect it.
Keeping your employee data safe should also be a priority. Data security is important. Performing a complete ROI analysis will help you understand if your current HR payroll system is truly meeting your needs and will help guide you toward making the right decision for your future.
Benefits of a High ROI Payroll System
Here are some benefits you should see when your HR or payroll software has a high ROI:
1. Reduced Processing Time
An HR department that functions on manual data entry would take longer to update employee information and solutions. Automation within HRIS and other payroll solutions reduces the efforts of manual processing. It improves focus and productivity significantly among HR teams.
2. Reduced Manual Errors
Payroll errors can lead to time wastage, loss of revenue, and decreased productivity. The right technology helps in automating manual tasks, planning, and reporting. It helps you make better decisions about your employees and organization.
3. Increased HR Productivity
Investing in modern solutions and automation for HR professionals is necessary. It helps them complete tasks in less time with more efficiency.
Adopting an HR or payroll solution is crucial. It improves the performance of everyone in the department. It can directly impact employee productivity and employee performance.
Increase Your Payroll System’s ROI with Rise
Are you unhappy with your current payroll system or simply want to do more? Our all-in-one integrated online payroll program provides a powerful, stress-free, and accurate solution for Canadian businesses with 100% Canadian support. Beyond just payroll, Rise provides a full suite of HR features:
- Employee onboarding
- Employee self-service portal
- Time tracking and scheduling
- Benefits administration
- Performance management
Book a free demo today to discover how Rise can help you.
