MyPaperLessOffice HRMS ROI
The following is a company typical cost analysis based on a 00 employees 
Staff cost at $25/hr including all benefits
Hard Cost - Investment

  • Reduce or eliminate the cost of printing and distributing pounds of paper (new hire packets, SPDs, company handbooks, open enrollment documentation, etc.)

  • Reduce time processing paperwork (keying, faxing, sending, emailing, etc.)

  • Reduce mistakes due to human error

  • Reduce the number of claims errors/issues by working with clean data and faster eligibility turnaround

  • Reduce the cost to carrier for processing paperwork

  • No hardware or software costs

  • This equates to an annual forecasted rate of 13.2%. Conservative estimates place the cost of turnover at 25% of annual salary plus benefits (Saratoga Institute and Kepner-Tregoe, Inc.)

  • Just How Valuable are Retention Efforts? One source estimated that a 10% reduction in employee turnover was worth more money than a 10% increase in productivity, or a 10% increase in sales!

HR Services Estimated Current Annual HR Admin. Cost (Source)
Cost Elements  		MPO Cost
HRMS System $5,000 Basic Hr System  $0*
Printing (handbook, spd etc)  $500 Printer $0*
Hard Cost - Service Outsource
Cobra Administration $1,500 (Benefitlinks) 1.50 cents per ee per month $180
Benefits Enrollment $2,500 (BLS) 1 hr/ee/yr $1,250
Payroll Processing $12,000 ADP $3,288.00
Paper Cost $35 / case  $420 Staples $35
File Folders  $1000 Staples $0
Soft Cost - Staff Administration

  • Increase time spent on plan design and communications

  • Consistency in new employee orientation to reduce liability

  • Consistency in training in various employment practice liability issues

  • Create immediate access to your employee benefits data

  • Enhance communication between HR and employees

  • Reduce repetitive HR administrative tasks

  • Improve employee productivity and satisfaction

  • Reduce legal and regulatory exposure - stay compliant!

  • Provide accurate information to the carrier

  • Reduce the cost of handling routine employee inquiries through self-service

Time Sheet Processing $43,333.25 104,000 punches a yr (1733 hrs a year in accounting $21,666.63
HR: Compliance Services  $ 2,500   (DOL) 2 hr/ee/yr $500
HR: Employee Relations   $21,250 (SHRM) 17 hrs/ee/yr $4,250

HR: Orient & Enroll  

 $ 2,500 (SHRM) 2 hrs/ee/yr   $1,250
Time Administration  $ 2,400 (Kronos) If manual,
$24-$48 /ee/yr  		$250
Salary evaluations /  performance review system $2,000 Abra $0*
Work Schedules System $1,800 (SHRM) $0*
Work Comp  Adm.   $1,000 (AON) $10 /ee/yr $500
Compliance: Handbook, SPD, Cobra, HIPAA,Training update and distribution $8,334 (DOL) $166.68 per employee average per year $833.00
File Clerk 15600 $15 /20 hrs / a week $2500
File Cabinets $500 Staples $125
Total Estimated Annual Costs $124,137.25   $36,627.63
Number of Employees   100   100
    Annual Service Fee  $7,000*
Total Projected Annual Savings with MPO   $43,627.63
Annual Cost Per Employee $ 1,241.37   $436.28
Annual Savings Per Employee     $805.09
Monthly Cost Per Employee $103.45   $36.36
Monthly Savings Per Employee     $67.09
According to a survey conducted by the research firm of Towers Perrin,  businesses that have utilized Web self-service and knowledge based human resource tools have shown 100% improvement in administrative timeliness, 38% improvement in accuracy and their workload was reduced by 50%. 

By definition, Human Resource Management Systems (HRMS) is an application that combines many human resources functions, including benefits administration, time and attendance, payroll, recruiting, applicant tracking, training, performance analysis and review into one integrated package.

HRMS Technology is an enabling resource that provides cost savings, greater efficiencies and increased performance.  Companies use technology with the purpose of addressing a business needs.  Technology, when used correctly, can provide efficiencies at a level that people simply cannot. (HR Department Management Report, Nov 2003).   

Savings are only achievable as a result of system implementation and process improvement.   Just one FTE reduction in clerical resources over a years time would cover the entire cost of the system.  Other areas where savings will be seen are as follows:
  • Decreased time spent on routine issues because, in some cases, it takes 4-5 minutes to deal with routine issues rather than 20 minutes. 
  • Elimination of stacks of paper files needed to house personnel files.  This space savings could be used to expand operations.  
  • Decreased turnaround time for report requests
  • A reduced number of errors in HR data
  • A lower number of grievances related to HR data errors
  • Fewer instances of lapsed certifications
  • Less clerical people needed to produce HR documents
It will, most importantly, allow for HR personnel to move away from clerical to strategic planning roles within the organization.

According to an ROI study conducted by Cedar Enterprise Solutions (Baltimore), an HR consultancy, the implementation of online HRMS systems will deliver the following savings: a 50 percent reduction in cycle time, a 60 percent reduction in cost per transaction, a 75 percent reduction in inquiries made directly to HR and a 100 percent payback in one year.

The difficulty in successfully running a business today is not based on new challenges.  Although new issues do arise, many of the current issues have been around for a long time.  The problem is the addressing all of the issues simultaneously as they continue to change at an accelerating pace.  An increasing number of new competitors, new rules of competition, structural changes in many industries, a new regulatory environment, and an increase in customer expectations, human resources issues, changing political environment, and changing technologies are all issues that managers must face today.  MPO is just the innovative platform needed to standardize and connect procedures, reduce risk, and manage several dimensions simultaneously. Allowing for  "mass personalization" of employee communications, HR professionals will delve more into strategic thinking strategies, and highly integrated systems will ease the employee management burden and provide a total rewards concept.Priceless
Real Company, Real Savings

  • Lucent Technologies Inc., The company estimates it saved $1.2 million the first year it put SPDs online.

  • Glen Brandow, an IBM spokesman "Web-based enrollment was just as attractive to the company, which saved about $1 million last year in costs associated with delivery of benefits information," Brandow says.

  • Dell Computer replaced its legacy HR system with a fully web-native, self service core system for the US—at a fraction of the cost of most major core HR system projects. In the first year alone, this system saved the company $2.5 million.

  • In 1999, HP began a strategic push to drive $1 billion out of its infrastructure costs. HR as a function was able to drive a third out of its direct expenses through a reduction in full-time employee headcount and shutting off multiple service delivery options. Since then, all of their continued technology deployment has been self-funded through cost savings already achieved.

  • MITRE CORP., AN independent, not-for-profit company, provides federal agencies with system engineering and information technology expertise. Founded in 1958, the Bedford, Mass.-based company's more than 4,000 employees support four primary customers: the Department of Defense, the Federal Aviation Administration, the U.S. intelligence community and the Internal Revenue Service. (Mitre won a CIO Enterprise Value Award for the system. For more on the MII, see "Common Knowledge," CIO, Feb. 1, 1999.) In all, the MII has enabled Mitre to save $16.6 million in labor and material costs since 1996. The savings are allocated as follows: (human resources and administration ($5.6 million), information systems management ($2.9 million), financial operations ($3.6 million), technical operations ($2 million) and miscellaneous other services ($2.6 million).