3 things you should be doing to cut HR expenses by 90%

Human Resources management has long been considered a cost-center, rather than a profit center (True, as HR people do not make the actual sale. But who recruits, hires, and trains the sales people who bring in the revenue? Exactly.), and is more often than not a thankless job that carries tremendous pressure to deliver on deadlines. 

"Do we have a replacement for the vacancy already?"

"When is my job contract coming out?"

"Do we have updates on the new benefits scheme?"

"Is the payroll ready?"

Naturally, the go-to move to address increasing pressures and requirements is to keep on adding HR staff to handle all the different functions and day-to-day tasks within the HR department. But instead of hiring more people, there are a number of ways to get things done better, and more cost-efficiently. Below are three proven ways to address HR needs, while lowering your expenses (even up to 90% less!) versus just hiring staff:

  1. Use automated online tools
  2. Outsource admin tasks
  3. Hire off-shore talent

Use automated online tools

From recruitment, to compensation and benefits, to performance management, there is a wide range of online platforms available to address every HR need. And I mean EVERY.

Take, for example, recruitment. If your company is growing, job requirements are sure to grow as well. With all the additional time required to post a job ad, screen applications, schedule interviews, collate interview ratings, prepare job offers, etc., you would typically hire a new HR Assistant, which would require an annual salary of about A$50,000. 

In contrast, getting an account with recruiting software such as JazzHR (that you can program and automate your entire recruitment process with, from job posting to job offer) would only cost you less than A$5,000 a year, while avoiding the need to hire new staff. That's already more than 90% in savings. Plus the fact that you virtually eliminate human error in the entire process (no misplaced applications!).

As for online software for the rest of the HR functions (such as payroll, timekeeping, employee database, benefits management, etc.), Optimum-Direct.com is a website portal with a wide range of the best and proven online HR tools in Australia and beyond to help small and medium businesses in particular. You can check out their menu of HR tools here.

Outsource your tasks

Let's say you just have a one-time need to process applications from a job posting ad you did yourself, and a full applicant tracking system might be overkill. But the time to go through each candidate, and assess their fit for the vacancy, would still be costly on your part in terms of the time you will have to put in (God knows how much you make in an hour), and the lost opportunity to work on other important matters.

Have no fear, because there are a number of managed services that you can avail of to free up your time, including job screening of applicants. Optimum Direct is one such provider, offering job screening of your job applicants at A$250 per position. So you can have more time to attend to your business expansion, your inventory issue, or to catch a few, much-needed zzz's. 

Other examples of fully-managed services on typical HR tasks that come cheap:

Hire Off-Shore Talent

Even if you still choose to get a full-time warm body to take over additional work, there is another option for you that offers obscenely huge savings.

Kinetic Innovative Staffing taps into a huge pool of highly-skilled workers from the Philippines (with a population of more than 100 million), from web developers, to civil engineers, to accountants.

Going back to our HR assistant and her average annual salary of A$50,000, hiring an offshore assistant from Kinetic would cost an average of A$17,400 per year. That's savings of 65% (heck, you can even hire two offshore assistants and still save A$15,200 a year)! Testimonials  from existing clients indicate that there are no communication barriers (Filipinos are excellent English speakers), quality of skills are top-notch, and face-to-face accessibility to off-shore staff is daily and nearly on-demand (they being online all the time).

You can check out Kinetic's prevailing prices of role salaries here.

These are just three ways, but many more options to save costs, while maintaining (or even improving) output are available to you, with a lot of new trends developing everyday.


About the author:

Dondi (Yahoo).jpg

Dondi Alentajan is the Principal Consultant for Alentajan Business Consulting and serves as a consultant for Optimum Direct, a web portal for the best HR tools and software for small business. He was recognised as a “Marketing Maverick” by Business World in 2012, and he headed the Marketing Team nominated “Best Marketing Company” by the PMA for two consecutive years (2010 & 2011). His primary work mission is to help companies and their customers be happier together.