Costs and Benefits Analysis of Good HR Management

In this struggling economy, every firm needs to think about how to better manage costs to turn better revenue. Larger firms will naturally focus on managing human resource, as poor human resource management and structure strains the company and dredges the progress of the firm, especially one in competitive industries.

The first thing companies need to take note of is the allocation of employees. Employees cannot be wasted in a company of limited space and opportunity, and it requires a good human resource management system, or HRMS, to handle a large staff roster.

Employees who are unsatisfied with their progress, performance or treatment in a company will actively seek for other opportunities elsewhere, even possibly joining competing firms for the benefits they’ve been offered there.

Such employee reactions will result in large losses for the company: firstly, a cost in the productivity for the firm when employees take leave or go absent to search for other, more satisfactory jobs. Various technology production firms in Canada have registered a loss of more than CAN$1 billion due to this loss in productivity and the associating opportunity costs that were incurred.

Secondly, there will be a loss in human resource when the employees quit and move on, which will be need to filled in all over again. More costs are then incurred with the necessary follow-up search for new talent.

These issues can be addressed with good HRMS and competent general HR practices. A good leave management system will help employers keep track of employee attendance. Such attendance software and customized attendance systems will help employers to take note of staff who may be preparing to jump the ship. It will also help employers to improve their payroll systems and implement time sheets, which will reflect these attendance lapses in the payroll and employee payslips.

Absence management, leave management and payroll management will thus help firms reduce costs by making sure employees who are not performing up to task are not rewarded accordingly.

Further benefits can be gained if employers were to also use human resource management software to carefully manage existing staff in the company, giving them opportunities to train and develop better skills in their occupation. This will allow them to advance and proceed further in their career, giving them job satisfaction. This will in turn increase productivity and HR efficiency, positively benefiting the firm in the long run.