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The Real Cost of Manual HR Tasks

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One of the benefits of switching to digital, single-source payroll software is the elimination of manual and/or dual-entry tasks. But often, it’s hard to put a real number on this process. Thankfully, Ernst & Young studied the costs associated with not using an online employee self service platform. In their 2019 study they found that, averaged over dozens of key HR tasks, the cost of manual HR data entry comes in at $4.51 per task!

So how does this cost impact businesses? Let’s take a look at how these costs add up over time.

Small costs add up over time

At a passing glance, $4.51 doesn’t seem like much. I used to work with folks that, every workday, would spend around six bucks on a sandwich. That’s $30 every week, times four weeks a month, comes to $120 a month on just sandwiches. Call me frugal, but I can come up with some better ideas on how to spend that money. The same analogy can be applied to manual HR tasks. Remember, we’re talking about $4.51 per data entry!

Solutions exist to minimize manual costs

There are still a number of organizations tied to the old-school practice of paper processes and manual data entry. And while the leaders of these organizations may think they’re saving money by not investing in an HRIS software, we’ve demonstrated there are real costs associated with sticking to old ways. Of course, every payroll and HR software comes with a price, but over time, it ends up paying for itself due to the savings on manual and paper processes, not to mention tax compliance. 

Thankfully, there are technological solutions to minimize manual labor costs. 

For example, giving employees control over their own data frees up HR to focus on more important tasks, which in turn boosts efficiency and productivity across the company. The biggest benefit to utilizing Employee Self Service (ESS) for a business owner is that it can save a significant amount of money once it is utilized. ESS allows HR to spend more time working on bigger tasks as opposed to spending valuable time updating individual employee records (remember that $4.51?) or looking up how much vacation time an employee has left. ESS gives employees the answers they need without having to go to HR. This kind of solution increases productivity across the board, meaning your employees are optimizing their time in the most efficient manner. ESS essentially eliminates the middleman and provides a direct source for payroll and human resources answers.

The benefits of outsourcing payroll and HR tasks

Outsourcing payroll to a software company specializing in payroll and HR management can be incredibly beneficial for your company. Price-minded individuals will see that outsourcing payroll will generally be the more expensive option. However, most organizations agree that the benefits far outweigh the cost of service, especially if you keep that $4.51 amount top of mind. Here are some of the perks of using a payroll software:

  • Accurate and timely pay stubs: Payroll software companies are experts in processing tax codes, staying up-to-date on the latest laws, and can handle all manners of deductions, pay frequencies, and any other specialized request.

  • Saves an enormous amount of time: Businesses of all sizes benefit by delegating payroll processes. Outsourcing payroll allows you to stay focused on managing your employees and achieving company goals.

  • Long-term savings and peace of mind: While an outsourced payroll solution may seem expensive upfront, it’s more affordable in the long-term. Paying for a single-source payroll solution eliminates tax errors and the need for an accountant solely focused on payroll processes.

If you’re curious about the costs and advantages of single-source payroll software, reach out to us to review your needs and determine the best solution for your business.

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