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Pegasus Blog

Finding new talent to drive growth by keeping HR costs down

DATE

May 20, 2014

When it comes to business growth, HR is about finding new talent to drive the business forward and reducing employee costs. There are a number of things that HR Directors can capitalise on to cut HR costs and free up resources, giving them more time to focus on recruitment.

According to Price Waterhouse Coopers (PwC), on average HR costs account for around 28% of overall operating expenses, with an estimated 15-25% of these costs representing opportunities for savings.

Reducing HR costs

Through reviewing practices, processes and technology, HR can deliver savings to the organisation which in turn free up resources to focus on identifying new talent and opportunities to drive business growth.

In the last 12 months we have seen our customers embrace a number of new tools within the HR space in order to cut costs and add value. Many have implemented Payroll Self Service, which essentially empowers employees by giving them access to view and manage their payslips, P60s, holiday entitlement and personal data anytime and on a number of devices. By introducing this one, relatively small change, around £7,000 can be saved through a reduction in administration, postage and stationery costs (based on a company with 500 employees over 3 years).

In addition to the cost savings, another valuable saving is time. If you work in HR, you’ll know how much of your time is spent handling employee requests to update personal details and re-print payslips. By allowing employees access to view and manage this, HR time can be better spent recruiting talent, assessing employee skills and identifying areas for growth.

Another key area where our customers are containing costs is through the auto enrolment of pensions capabilities within our payroll solution. Potentially one of the most complex initiatives to hit payroll managers for some time, auto enrolment states that employees must be categorised, and for those who meet criteria, enrolled into a pension scheme. To undertake this process manually is unrealistic as it would involve recruiting an additional team of people to crunch the reams of data involved. However many software packages designed to support the initiative come with hefty price tags, resulting in an additional burden on payroll administration.

Our view is that auto enrolment is one of many initiatives which have become part of the payroll function and payroll software should incorporate these capabilities as standard. As a result, our customers are able to adhere to the new rules without incurring additional costs.

For more information on how the right HR & Payroll solution can help deliver cost savings to your organisation, visit Opera 3 Payroll and HR.