#1 ROEI Series: The Difference Between HR Costs and HR Investments

Your employees are your company's most valuable assets. Like any sound business investment, you want the money you spend on your employees to yield big results. We call this Return on Employee Investment™, or ROEI™.

With 4 generations in the workforce, it is prudent to adapt new approaches, review/revise programs and ensure compliance. Most often the amount of time spent in daily tasks consumes the available time for planning. Today’s HR technology automates many of the tasks and concentrates all the employee information in one silo of information to be accessed by management and employees as appropriate. Series #1 defines “cost” versus “investment” and the new way of defining “Return on Investment (ROI)

  • An organization is defined by its people. It does not generate ideas, does not give service and by itself is neither efficient nor productive; it is your employees.
  • In most companies the workforce is the largest expense or better expressed as the largest investment and like any other investment must yield a healthy return. We define that as ROEI™
  • (ROI) Traditional HRMS is measured by how much more efficient HR becomes and how the software helps the HR Department with the daily tasks. ROI is measured by taking the costs saved and efficiency gained divided by the Total Cost of Ownership.
  • (ROEI™) Modern human resource management is focused on finding and retaining talented employees. An investment in the workforce should help employees achieve their full potential, improve their motivation and strengthen engagement. The right investments can also prevent high employee turnover and boost the productivity by better engaging the employees.
  • Recruiting, onboarding, motivating and developing talent and supporting people managers is the new focus to creating an engaged workforce.
  • The effectiveness of employee management has a direct impact on business results and competitiveness. Management technology is actually an investment in employees. These investments will reward the company with an impressive return.

Watch for our June Article #2 ROEI Series: "The Advantages of an Engaged Workforce"