Maximizing ROI with an HRIS: A Real Case Study of a UK Technology Company

As companies grow, so does the complexity of their HR processes. For a UK-based technology company with 100 employees and a small HR team, implementing an HR Information System (HRIS) proved transformative. The company achieved significant cost savings, improved productivity, and a stronger company culture—all within a few months of implementing the HRIS. But how can you know if an HRIS is a worthwhile investment for your business?

Get your free HRIS ROI Calculator today here.

Why an HRIS is Essential for Growing Companies

An HRIS helps streamline processes, increase efficiency, and cut down on costly manual tasks. From automating payroll and managing employee records to simplifying recruitment and compliance tracking, an HRIS can greatly enhance HR operations. Let’s look at a real-world example of the ROI potential for a UK tech company.

An HRIS ROI Calculator (HR Information System Return on Investment Calculator) helps organizations assess the financial impact and benefits of implementing an HRIS. When designing an HRIS ROI calculator, it's important to include various elements that capture both costs and savings. Here’s a breakdown of the key elements you should consider:

1. Initial and Ongoing Costs

• Software Costs: Include the purchase price, subscription fees, and licensing costs. These can be a one-time fee or recurring costs (monthly, yearly).

• Implementation Costs: Capture costs related to system setup, data migration, and integration with existing systems.

• Training Costs: Costs for training HR staff and employees to effectively use the new system.

• Maintenance & Support Costs: Include any costs associated with system updates, support contracts, and ongoing technical support.

• Hardware Costs: If the system requires additional hardware (like servers or devices), these costs should be included.

• Consulting/Professional Services Fees: Any third-party services hired for customization or additional support.
  

2. Labor Savings

• Administrative Efficiency: Calculate savings by reducing manual HR processes (payroll, benefits administration, etc.). For instance, input time spent on these tasks before and after implementation.

• Reduction in Data Entry Errors: Estimate the time and money saved by reducing errors, which can lead to costly issues like payroll discrepancies or compliance problems.

• Time Savings in Recruitment and Onboarding: Automating recruitment and onboarding can significantly reduce the time HR staff spend on these tasks.

• Time Savings in Employee Self-Service: If employees can access and update their information, it reduces HR’s administrative burden and time spent responding to inquiries.

• Reduction in Compliance Risks: An HRIS often ensures better compliance with regulations, which can help avoid potential fines and penalties.
  

3. Improved Productivity

• Employee Productivity: Estimate the increase in employee productivity by having easy access to HR services and information (self-service portals, mobile access, etc.).

• Manager Productivity: Calculate productivity gains for managers with access to performance tracking, scheduling, and other HR tools.

• Improved Decision-Making: Include productivity gains from analytics and reporting capabilities that enable data-driven decisions.
  

4. Employee Retention and Engagement

• Reduction in Turnover: An HRIS can improve employee satisfaction and retention by streamlining HR processes, providing clear career paths, and improving workplace culture. Factor in cost savings from reduced turnover.

• Improved Employee Engagement: Calculate any gains associated with higher engagement levels, which may lead to increased productivity and reduced absenteeism.
  

5. Time Savings and Automation

• Payroll Automation: Estimate the savings from automating payroll processes, including time saved by HR and finance staff.

• Automated Benefits Administration: Factor in savings from automating benefits administration and reducing the time HR spends on it.

• Performance Management Automation: Calculate time saved on tracking, monitoring, and managing employee performance.
  

6. Reduced Paperwork and Storage Costs

• Elimination of Paper-based Processes: Factor in savings from reducing paper-based processes, including printing, filing, and storage costs.

• Data Storage & Backup: Savings from moving data to the cloud and reducing physical storage requirements.
  

7. Improved Compliance and Reduced Risk

• Mitigation of Legal Risks: Calculate potential savings from avoiding legal fees or fines due to improved compliance tracking.

• Reduction in Audit Costs: An HRIS can streamline the auditing process by providing easy access to records, reducing the time and cost associated with audits.
  

8. Benefits from Data and Analytics

• Improved Reporting Capabilities: Quantify any savings or benefits from having more accurate, timely, and insightful reports on HR metrics (e.g., turnover, absenteeism, and performance).

• Forecasting and Workforce Planning: Include benefits from more effective workforce planning based on predictive analytics, which can lead to optimized labor costs and better resource allocation.
  

9. Overall Financial Impact

• ROI Percentage: Based on the savings and costs calculated, generate an ROI percentage to reflect the financial benefit of implementing the HRIS.

• Payback Period: Calculate the time required to break even on the HRIS investment. This helps determine how quickly the system will start generating a positive return.
  

HRIS ROI Case Study: Technology Company in the UK

Get your own free HRIS ROI Calculator here!

Let's fill in the numbers for an example case:

Company Profile:

• Industry: Technology

• Location: United Kingdom

• Number of Employees: 100

• HR Staff: 3

• HRIS Costs: £8,500/year in subscription fees, with an additional £6,000 for implementation and £1,500 for training.
  

HRIS ROI Breakdown

1. Initial and Ongoing Costs

• Software Costs: £12,000/year (subscription and licensing fees).

• Implementation Costs: £8,000 (setup, data migration, and integration with existing systems).

• Training Costs: £1,500 for onboarding HR staff on the new system.

• Maintenance & Support Costs: Included in the software subscription fee.

Total Initial Investment (Year 1) = £21,500
Ongoing Costs (Year 2 and beyond) = £12,000/year

2. Labor Savings

• Administrative Efficiency:

  • Each HR staff member spends an estimated 10 hours per week on manual data entry, payroll, and benefits administration.

  • With an HRIS, this time can be reduced by 50%, saving approximately 15 hours per week across the HR team.

  • Assuming an average hourly wage for HR staff of £15, the annual savings are:
    15 hours/week×52 weeks×£15=£11,700

• Reduction in Data Entry Errors:

  • Manual data entry errors cost an estimated £500 per quarter due to payroll adjustments and error correction.

  • With the HRIS, error frequency is expected to drop by 70%, saving £1,400 per year.

• Time Savings in Recruitment and Onboarding:

  • The current recruitment process takes 20 hours per new hire for administrative tasks, multiplied by an estimated 10 hires per year.

  • With the HRIS, this time can be reduced by 30%, saving 60 hours annually.
    At £15/hour, this equates to: 60 hours×£15=£900

• Time Savings in Employee Self-Service:

  • Employees spend an estimated 1 hour per month contacting HR for simple queries and updates.

  • With self-service capabilities, these inquiries are expected to decrease by 75%.

  • Saving time for both employees (75 hours/month) and HR staff (estimated 20 hours/month) equates to:
    95 hours/month×12 months×£15≈£17,100 annually
    

3. Improved Productivity

• Employee Productivity:

  • Employee productivity is expected to improve slightly by eliminating administrative wait times and allowing self-service options.

  • Assuming a conservative productivity gain of £100 per employee annually, this results in:
    100 employees×£100=£10,000

• Manager Productivity:

  • Managers are estimated to save 5 hours per quarter on performance tracking and reporting with the HRIS.

  • With 10 managers, each earning approximately £30/hour, this provides annual savings of:
    10 managers×20 hours×£30=£6,000
    

4. Employee Retention and Engagement

• Reduction in Turnover:

  • The HRIS is projected to enhance employee satisfaction and reduce turnover by 2%.

  • Given an average cost of £3,000 per employee for turnover-related expenses, this would result in:
    2 employees×£3,000=£6,000
    

5. Time Savings and Automation

• Payroll Automation:

  • Automating payroll processing saves HR staff approximately 4 hours per payroll cycle.

  • With bi-weekly payrolls, this saves around 100 hours per year, equating to: 100 hours×£15=£1,500100 \text{ hours} \times £15 = £1,500100 hours×£15=£1,500

• Automated Benefits Administration:

  • Automation is estimated to save 2 hours per month across HR staff for benefits management, resulting in:
    24 hours/year×£15=£360
    

6. Reduced Paperwork and Storage Costs

• Elimination of Paper-based Processes:

  • With the HRIS, paper storage and printing costs are expected to decrease by £1,200 annually.
    

7. Improved Compliance and Reduced Risk

• Mitigation of Legal Risks:

  • Improved compliance tracking is expected to reduce potential legal costs by approximately £1,000 per year.
    

8. Benefits from Data and Analytics

• Improved Reporting Capabilities:

  • Access to enhanced HR reporting and analytics is estimated to reduce time spent on manual reporting by 1 hour per week for HR staff.

  • This provides an annual savings of:
    1 hour/week×52 weeks×3 HR staff×£15=£2,340
    

Total Savings Summary

1. Labor Savings: £11,700 + £1,400 + £900 + £17,100 = £31,100

2. Improved Productivity: £10,000 + £6,000 = £16,000

3. Employee Retention Savings: £6,000

4. Automation Savings: £1,500 + £360 = £1,860

5. Reduced Paperwork & Compliance Savings: £1,200 + £1,000 = £2,200

6. Data and Analytics Savings: £2,340

   Total Annual Savings = £31,100 + £16,000 + £6,000 + £1,860 + £2,200 + £2,340 = £59,500
   

ROI Calculation

• Total Costs in Year 1 = £21,500

• Total Costs Year 2 and Beyond = £12,000/year

• Annual Savings = £59,500

  Year 1 ROI = (£59,500−£21,500) / £21,500 × 100 = 176.7%
  Payback Period = £21,500/£59,500 ≈ 0.36 years or about 4 months
  

Is an HRIS Right for Your Company?

Implementing an HRIS can be a game-changer for companies looking to scale efficiently. Curious about what your company’s ROI could look like? Download our free HRIS ROI Calculator for 2025. This easy-to-use tool allows you to estimate the potential savings, payback period, and overall return on investment for your business.

With our HRIS ROI Calculator, you can:

• Calculate expected labor savings and productivity gains.

• Determine potential savings from reduced compliance risks.

• Estimate the impact on employee satisfaction and retention.

Maximize the efficiency and effectiveness of your HR team with data-driven insights into the power of an HRIS. Download your free HRIS ROI Calculator now and take the first step toward a more streamlined HR strategy!

Final Thoughts

For growing companies, an HRIS not only provides an impressive ROI but also helps build a foundation for a thriving workplace culture. By investing in a modern HR system, you empower your HR team, streamline daily operations, and foster a more productive and engaged workforce. Ready to see the ROI potential for yourself? Get your free HRIS ROI Calculator today and discover how an HRIS can help your company reach new heights!