HRIS, How to measure its ROI?

As an HRD, it is important to know how to determine the ROI of your HRIS. A reliable indicator to analyze the interest of such an investment!
How to measure the Return on Investment of an HRIS?
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As a human resources manager, you are asked to evaluate the return on investment of each of your decisions. The"HRIS" dimension is one of them. Indeed, the information system you have deployed must also be analyzed in the light of the benefits provided. This installation requires an investment with variable geometry according to the functional perimeter and the population concerned. In this article, we propose a few lines of thought on the downstream part, how to measure the ROI of an HRIS?

Define meaningful HR indicators

Measuring the ROI of an HRIS in a company requires precise data. This data is provided by key performance indicators or KPIs that can be customized according to the context, the business or the sector of the company in question. The company must define its KPIs by identifying its problems and taking them into account. Today, it is above all the notions of attraction, retention and evolution of the social climate that are measured.

Each area of the human resources function has indicators. In recruitment, here are some examples of KPIs: the cost of recruitment, the number of CVs received per job offer, the level of co-optation, the origin of the best applications, etc.

Examples of HR indicators of HRIS performance

Artificial Intelligence is becoming more widespread in HRIS. This technology should not represent a visible change for users, but rather an improvement in their daily lives, materialized by a better adoption of the software.

Before moving to this technology, we propose a list of 10 questions to evaluate your current data practices:

10 Questions to ask yourself to assess your HR data maturity
skills HR Data: where do you stand?

Which HR indicators should be set in the context of an HRIS project with AI?

In particular, let's look at 4 indicators to track in an AI-supported HRIS:

  • The evolution of the rate of engagement is a first criterion, it results from the relevance of the data suggested by the AI.
  • An HRIS project team can, for example, evaluate the proportion of skills proposed by the AI and validated by the employees. 

The promise of AI is to understand individual preferences and reveal options that break the conventional pattern. The AI engine's learning is, for example, achieved through likes and dislikes of job and training proposals made to them.

Two success indicators are already used by our customers: 

  • Growth in the number of positions filled through internal mobility.
  • The improvement of the level of skills by trades or departments based on the proposed training programs.

Integrate quantitative and qualitative gains into ROI measurement

Moreover, measuring HRIS ROI begins with its evaluation. It is based on specific criteria, including quantitative criteria. It takes into account the benefits of an HRIS for your company. This list is not exhaustive and allows the determination of the added value of the service.

Quantitative criteria are the answers to a single question: why implement an HRIS?
Qualitative criteria are less easy to measure than quantitative ones. In addition, an HRIS has the advantage of allowing gains in terms of image quality or service. These indirectly allow for a reduction in costs.

What are the advantages of an HRIS from a qualitative point of view?

- A benefit in terms of image: the fact of going digital in your company allows you to enhance your image with your customers and suppliers. It also ensures that according to ParlonsRH 1 employee out of 2 considers that the equipment in solutions of their company is insufficient to meet the training needs.
- A benefit in terms of reporting: on average, 54% of the costs of a company are based on human capital, so we might as well measure it on all its dimensions (remuneration, recruitment, skills, training, benefits, evolutions, ....) in order to improve its good management.

In order to objectively measure the potential gain, it is recommended that you rely on external benchmarks and compete the data with the HR managers of your own organization.

Collect and make reliable data

The data collection stage consists of gathering and storing business data on a daily basis. If your human resources department does not have efficient and adapted tools, this operation will be complex. We advise you to work with HR consulting firms such as :
- BeHR ;
- Implid ;
- Tempo&Co.

Depending on the tool chosen, you can evaluate the results achieved, check the consistency of the data, export Excel or PDF reports, generate statistics, etc. The challenge for the human resources manager is to know how to use this data in order to bring more value to the company.
The best way to do this is to cross-reference human resources information. Then, they must be compared with those of the other business lines in the company.

Analyze the data

Once the data has been collected, it is time to analyze it. A concrete example will help explain the concept of data analysis. Certainly, when your company's human resources department wants to measure the ROI of a training program, it must rely on measurable results.
Among other things, it will be necessary to know the real cost of the training, its usefulness in relation to the company's strategy, the results obtained following the training, the unavailability of employees, their degree of involvement, etc.
These are the same steps that must be followed to analyze the data related to the calculation of the ROI of an HRIS. Finally, it is important to draw conclusions from the data collected and analyzed.

Conclusions to be drawn after the ROI calculation

In order to measure the effectiveness of the process followed and to identify weaknesses, conclusions must be drawn. The human resources team uses this data to reposition the human resources function as a strategic player that can embrace the challenges of the company.
By analyzing and restructuring the data, the company's present and future can be established. Concrete solutions are also provided to the various challenges.

Would you like to go further in the notion of Return on Investment? Our"Optimize HR investments" page will guide you.