As budgets shrank and most new spending went toward remote-work infrastructure over the past couple of years, some human resource leaders have faced a steep uphill battle to secure approval for new technology investment in employee workforce management software. For others, getting funding for HR technology upgrades or replacements became easier as the economy and jobs market rebounded.
Whatever the season a company or small business is going through, HR leaders and professionals need to use their newfound leverage learned during and after the COVID-19 pandemic to advocate for better technology. Streamlined workspaces due to fewer employees and a tight labor market may encourage organizations to invest those savings in new, user-friendly technologies to maximize employee productivity and efficiency.
But that doesn’t mean new technology will be easy to budget for in the second-half of 2022, the year 2023, and beyond. HR leaders still struggle to convince their organizations’ top decision-makers to spend on HR technology, according to Gallagher’s 2020 HR Technology Pulse Survey. Survey respondents state that company leadership doesn’t understand the importance of this type of investment — and this is the main reason for difficulties.
Winning the Decision-Makers’ Approval: What You Should Know
To pitch new investments successfully — such as a total workforce management system — it’s important to know what type of business case the C-suite prefers. HR leaders frequently make the mistake of presenting the wrong message to senior executives and management.
A total-cost-of-ownership analysis — which goes beyond per-user pricing expenses to include software configurations, user training, and ongoing technical support for upgrades — may be expected by some executives, while others prefer a more simplified cost/benefit analysis or a mix of quantitative and qualitative benefits. It really depends on the company’s cultural attitude toward human resources. You can use a better employee experience as the groundwork for getting a new technology investment approved without requiring a full financial analysis. However, executive leaders may require a complete return-on-investment analysis with both quantitative and qualitative aspects.
The Society for Human Resource Management’s “Designing and Managing a Human Resource Information System” study is a great resource for guiding companies on how to determine the use of technology to transform HR practices and market your HR brand.
However, to gain approval for technology replacements or upgrades from senior leaders (especially for the total workforce management service you need), the following strategies are important:
- Business objectives should be tied to qualitative benefits. C-level leaders place greater importance on qualitative or “soft dollar” benefits associated with technology purchases when they’re tied to business objectives. In the case of enhancing employer-employee tasks and relationships or complying with legal mandates, pitching them on a new software platform is usually easier. With these investments, you can oftentimes reduce costs and achieve key business objectives.
- Engage leaders early in targeted investments, and don’t neglect to factor-in costs. Avoid overpromising and communicate early with C-level leaders about new technology expenses. The implementation, configuration costs, support required from other business groups and information technology (IT), and training costs should be taken into account. You should include ongoing and one-time costs.
- Provide a quantitative breakdown of benefits. Introducing a proposed investment with quantitative benefits sets a favorable tone and establishes quick credibility with CFOs and CIOs. Show how a new payroll or workforce management system can help reduce payroll “leakage” — unexpected or unintended expenditures on labor — or how a new technology platform can enable companies to manage a burgeoning number of contingent labor contracts more effectively.
Additionally, a new recruiting system powered by modern technologies or artificial intelligence might be able to significantly reduce time-to-fill in volume hiring scenarios that impact revenue, or they could help eliminate fines associated with compliance.
- Financial technology investments should be linked to HR technology investments. As more HR leaders link their cloud investments with finance cloud investments, they are successful in securing approval for spending requests.
Boosting performance, reducing duplication of work, and creating a strong ally in the CFO at any company are reasons for this pairing. The combination of HR and financial cloud applications on a single platform can benefit both applications in terms of support resources, seamless integration, and data sharing. Furthermore, it can reduce software subscription costs and make upgrade management easier.
Globally, 35 percent of respondents to MIT Technology Review’s 2019 survey said they planned to create a shared finance and human resources function. A broad range of industries provided responses to the survey, including finance, HR, and IT executives.
Getting new investments internally is another key benefit of the partnership, because it’s an integrated platform play. HR leaders are often able to make friends with the CFO and even the CIO when they pitch a proposal this way. Since HR leaders aren’t going it alone, their odds of success increase.
An Innovative Approach Goes Beyond Cost Savings
What’s more is, HR leaders are increasingly able to convince their bosses to invest in new technology using a method that goes beyond cost cutting and headcount reduction. In any business case, saving money is not the only goal — but releasing value as well. It is important to recognize there will always be ways to automate and ways that reduce costs.
However, many are finding out that HR leaders gain buying power when they demonstrate how technology will make it easier to access scarce talent, raise worker capabilities, or enhance employee engagement. All of these gains have quantifiable value, although they are not as straightforward as cost reduction. This is where a smart workforce management strategy comes into play.
The 2021 Deloitte special report on Global Human Capital Trends (as well as prior survey studies) reveal the majority of respondents are frustrated by the need to enter similar data into multiple systems when they need to complete a task. When friction occurs, it creates a cascade effect that negatively impacts engagement and productivity. A greater need for digital experiences that allow employees to conduct their work faster and more efficiently has enabled HR leaders to justify technology investment.
Senior leaders place a high priority on creating a positive employee experience. Deloitte’s study also found that executives are most concerned about employee wellbeing, reflecting the challenges workers have faced during the COVID-19 pandemic.
VCS Software specializes in the total workforce management solution that more organizations and HR leaders are turning to so they can stay compliant, remain on-task, integrate wellbeing into the work and technology experience, and bring balance and connection to the work/life environment.