The ROI of HR Technology

Investing in HR technology is something that is typically done with great consideration. After all, it’s expensive, creates downtime and requires system training. Additionally, investments can be a hard sell for those outside of your department as others may not see why the technology is necessary or beneficial. While frustrating, it’s understandable when others don’t understand why HR technology is a vital part of how you do your jobs. If you’re considering new technology or pitching the idea, it can be difficult to put a number to the difference it will make, or validate your purchase by showing its return on investment. There’s no exchange of funds in your department, no sales numbers and no revenue or losses (in the traditional sense), so how do you calculate the ROI it will provide?

First, you’ll want to consider your current situation in relation to the areas that the new technology will touch and explore what the technology would do for each area. Below are three factors to consider and how to determine ROI from them:


Time is one of the best ways to illustrate the difference that technology will make as it is simple to put a monetary value on time. Consider which actions will be automated, estimate the amount of time each of your employees spends doing those things now and use your average employee salary to determine the cost savings. Also consider how much time will be saved by those outside of your department through easier approval processes and less paperwork.

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Employee satisfaction

What would it mean to your employees to be less frustrated, have a lighter paperwork load or even have a copier that they didn’t want to kick on a daily basis? Don’t underestimate the fact that your HR team knows what else is out there are may get fed up with working for a company that seemingly doesn’t place enough value on the department to invest in something that would make their jobs easier. Also, the fact that you are cutting edge is a major selling point for recruiting.

Hiring success and turnover rate

Hiring success and turnover are difficult to predict or estimate, but this is one area that will be provable some time after you adopt the new technology. Recruiting tools, investing in more advanced and intuitive job boards, adding analytics and upgrading your HR system all have an effect on the types of employees you recruit, how long the hiring process takes and how well you keep up with employees after they’re hired. This can be a direct cause of the new technology or a result of having more time to focus candidates due to time-saving technologies.

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Have you been tasked with proving your HR technology’s ROI? Tell us what methods you used in the comments section below.

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