Glossary of HR Terms

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HR Technology ROI

Calculating the ROI of HR Technology

What Is HR Technology ROI?

You’ll never see a successful business leader throwing resources behind an initiative “just because.” Every financial decision made in business has a clear purpose backed by a well-researched expected return on investment (ROI). And that’s especially true of investments as financially intense and operationally disruptive as new HR tech. To gain buy-in from leaders, you need to calculate and demonstrate a compelling HR technology ROI.

Discover what HR technology ROI is, how to calculate it, and ways to increase your return during an HR tech implementation.

Defining HR Technology ROI

Human resource technology ROI is the financial return on investment achieved from implementing HR tech. It weighs the costs associated with purchasing, deploying, and maintaining the technology, as well as any training and support, against the potential benefits of adding the tech to support your processes.

You’ll see the immediate value of an HR tech addition in easily quantifiable metrics, such as efficiency, cost savings, and compliance. HR technology provides an ROI at the strategic level, too, though you may not see the results as quickly. You may use workforce planning software to identify potential talent gaps within an organization, for example, or to engage employees more successfully and more often.

How to Calculate the ROI of HR Technology

Start by running a cost-benefit analysis to generate an estimate of your ROI. A cost-benefit analysis is a process businesses use to determine whether a proposed project or course of action is worth pursuing. The analysis involves weighing the costs of an action against the benefits you expect it to produce.

The first step is to identify all the potential costs and benefits of implementing the new software. Costs might include the price of the software (one-time or annual costs), time spent implementing new tech, and potential lost productivity during that disruption. Benefits may include higher-quality output, greater participation in HR programs, and better communication.

Next, estimate the monetary value of each cost and benefit and compare the total estimated costs to the total estimated benefits to determine whether the new HR tech is worth pursuing.

An ROI for HR tech typically is measured as a percentage of what the technology costs. For example, if the cost of adding new tech was $100,000 and the return on investment was 10%, the company would save $10,000 annually.

Taking the results of your cost-benefit analysis to leadership helps you illustrate the benefits of new HR tech to key stakeholders in the process, which can encourage their buy-in.

6 Processes Where HR Tech Saves You Time and Money

Adding HR tech to key points in your processes improves efficiency and outcomes, saving you time and money. Check out some of the places where you’ll reap the highest HR technology ROI.

Recruiting and Hiring

One of the most common places to deploy HR tech is in your recruiting and hiring function. HR tech can help with automating and streamlining the recruiting process.

Applicant tracking systems and other recruiting and hiring tech can help you post job openings to multiple job boards with one click, for instance, or automatically administer assessments and rank candidates based on job-related skills and abilities. It can help with scheduling interviews by sending automatic reminders to both the candidate and the interviewer.

By providing each of these benefits (and many more), HR tech cuts back on the transactional tasks associated with recruiting and hiring so your talent acquisition team can devote its time to higher-level imperatives, like building relationships with top candidates.


HR software’s ROI in onboarding processes can’t be overstated. Effective onboarding is one of the most meaningful points in the employee lifecycle and one that technology adoption can improve.

One way in which HR tech can save you time and money during the onboarding process is by automating repetitive or time-consuming tasks. For example, if you use a tool to manage your new-hire paperwork, the system can automatically generate and send offer letters, collect employee signatures, and keep track of any required documents.

Another way HR tech supports a better onboarding experience is by providing a central repository for all the information your new hires need. This could include an employee handbook, contact lists, or links to internal resources. Having this information readily available can help reduce the amount of time your managers spend orienting new employees. Automating a drip campaign to deliver critical resources automatically guarantees that new hires can access the information they need without it overwhelming them.

HR tech also can create a more personalized onboarding experience for each new hire. For example, you can use data from the hiring process to match new employees with mentors or colleagues who have similar interests or backgrounds. You can use tracking features to monitor each employee’s progress and ensure that they receive the support they need.

A lot goes into an effective onboarding process, and HR tech enables you to make that experience the best it can be for new hires, their managers and colleagues, and your HR team.

Time-Tracking and Benefits Administration

HR technology also can streamline the process of tracking employee time and managing their benefits. Time-tracking software can automate the process of collecting employee hours, and benefits administration software can help manage eligibility and enrollment. HR technology also can help ensure compliance with time-tracking and benefits regulations.

Offering employee self-service capabilities lets people find answers to their questions about compensation, benefits, leave, or PTO in real time rather than having to navigate through several levels of the HR team to find the right person.

By using HR technology to streamline these processes, businesses can save time and money that they might otherwise spend on transactional, low-value activities.

Performance Management

More employers look for performance management solutions today, and with good reason. Technology can automate performance management processes, making it easier for managers to give employees timely feedback.

Many performance management systems offer tools for goal-setting and tracking progress toward those goals. Set automated nudges reminding managers to check in with employees or follow up during a complex task to keep everyone on track and motivated. Integrating performance management in the flow of work improves performance outcomes, which increases your ROI.

HR technology also can help identify patterns of behavior and issues that may affect employee performance. Pulling aggregated performance data into a single dashboard gives you increased visibility into what makes your workforce tick so you can make more informed management decisions.

Employee Engagement

Employee engagement and retention are huge priorities for HR professionals. Disengaged employees cause a drop in productivity, which lowers your overall performance, and often leave the company altogether. That drives up the costs of recruiting, hiring, and training.

Employee engagement software lets you collect and use data to improve the employee experience. Surveys give people the chance to voice their concerns or leave positive feedback you can use to improve HR programs.

Employee experience software also can provide key points of connection so team members always feel like they’re part of something bigger than themselves — which keeps them invested in their work and drives up your HR technology ROI.

Learning and Development

Another important HR process more employers automate through tech is learning and development. This process can be time-consuming and costly if not done correctly. By using HR technology, you can save time and money while still providing employees with the training they need.

HR technology can be used to create and deliver training content, track employee progress, and measure the effectiveness of the training. By using HR technology for learning and development, you can ensure that your employees receive the best possible training while still saving time and money.

5 Ways to Make the Most of Your HR Technology Investment

Adding HR tech to your organization is a big commitment, and one that can become very costly if you aren’t careful. Take these steps to drive the highest possible HR technology ROI.

Define Your Goals

Before investing in any HR technology, it’s important to first define your organization’s goals. What problem are you trying to solve? What processes do you want to automate? Are you looking to improve your recruiting process, for example, or to streamline your onboarding process?

This is the stage where you need to not only identify the benefits you want to drive but also put realistic numbers behind them so you can run an accurate cost-benefit analysis. Run a cost-benefit analysis to set a baseline for the benefits you expect to gain from your tech investment. As you define your HR tech goals, be sure to get input from all stakeholders, including HR, IT, and business leaders.

Once you’ve identified which HR processes to optimize through technology, dig deeper into ways to improve them.

Research Your Options

Once you have a good understanding of your goals, you can start researching different vendors and technologies that can help you achieve those goals. Consider the pricing models of each tech option. Some may charge a flat rate, while others base their fees on the number of employees using the technology, which can affect how you allocate the rest of your HR budget throughout the year. Consult with other departments to ensure that the new HR technology will integrate well with pre-existing software.

To find the right HR tech vendor, survey your employees to get a pulse on their specific needs. Then, create a shortlist of vendors that offer the features and functionality you need.

Once you’ve narrowed down your options, request demos from each vendor to see the HR technology in action. Finally, be sure to check references for each vendor to get first-hand accounts of its customer service and support.

Implement Your New Tech

Implementing new HR technology in your organization can seem like a daunting task, but with careful planning, it can be a smooth process.

The first step is to map out how your organization will use the technology and which features are most important to train users on first. You need a clear plan for achieving the benefits you identified during the cost-benefit analysis. If you can’t, you won’t achieve your HR technology ROI.

Next, work with the IT department to establish data security protocols for the new HR technology.

Develop a training plan for employees who will use the new HR technology. Create a system for tracking and reporting data the new HR technology generates. By taking the time to correctly plan and implement the new technology, you can ensure that it will help your organization meet its goals.

Onboard New Users

First, you need to train your new HR tech users on how to use the technology. Develop a content campaign explaining the purpose of the new technology and the benefits it’ll bring to users.

Next, provide users with support so they can get help when they need it. Host interactive workshops where users can practice using the technology with the support of a change management project lead.

Lastly, you need to track usage and performance to ensure they use the technology correctly. Survey employees during the HR tech implementation to find out where they’re struggling to adapt and where you can offer additional support.

Track Your ROI

Tracking the value of your investment over time is just as important as anticipating its value before implementation. To track your HR technology ROI, you’ll need to gather data on how the technology is being used, and track metrics such as time savings, efficiency gains, and cost savings.

Once you have this data, you can calculate your ROI by comparing the costs of implementing the new tech to the monetary benefits it drives within the business. You also can use ROI to compare different HR technologies and make informed decisions about future investments.

Drive Your HR Tech Strategy: Measure HR Technology ROI

There’s much more to measuring HR technology ROI than crunching the numbers ahead of a big purchase. Measuring your ROI offers a clear window into how effective the technology is in achieving your desired outcomes. That lets you make adjustments to your HR technology strategy to ensure that, as far as HR tech is concerned, you get the most bang for your buck.