5 Tips for Saving Money While Maintaining High-Quality HRM

Due to high inflation and rising energy and raw material prices, companies will be paying extra attention to their expenses in 2023. At the same time, effective employee selection and development remain essential. Those who use HR tools such as online tests and questionnaires can potentially work more efficiently by consolidating them on a single platform. This allows you to maintain quality and continue doing the same work with less money-or accomplish more with the same budget. Be sure to keep these five points in mind.

How Are Companies Saving Money?

Due to rising costs, approximately 60 percent of companies are looking for ways to save money this year, according to this survey by HR service provider Acerta, which polled 1,200 employers. Energy costs, in particular, are being closely monitored (41 percent), and consumption is being cut back where necessary. Labor costs are also being scrutinized (18 percent), but employers are proceeding cautiously in this area because such cuts could directly undermine their competitiveness in the labor market. Meanwhile, labor shortages-even during and after this “headwind”—remain significant in many sectors, primarily due to the ongoing exodus of older workers in the coming years. Furthermore, 90 percent of companies indicate that cost savings on energy, other raw materials, and labor costs are “not possible.” As a result, a large majority expects to implement price increases, but only 13 percent expect this to cover their rising costs, according to this study by Van Lanschot Bank. The study also shows that companies are not going to cut back on innovation because they actually need it more than ever.

Saving Money and Growing Through Digitalization

Digitalization and other innovations are also crucial for working more efficiently and effectively and for increasing productivity. This approach enabled Shell to save billions over three years. But this is also achievable on a smaller scale. The digital transformation was initiated for good reason. Central to this is the digitization and optimization of work processes. In fact, we’re talking about the Fourth Industrial Revolution (also known as Industry 4.0), which is currently underway and is having a major (positive) impact on businesses and organizations. It enables significant cost savings, as well as greater sustainability and productivity. This is because technology, sustainability, and efficiency go hand in hand, and that is transforming companies’ work and production processes at their very core. That is why it is called a new industrial revolution. And it offers major opportunities that companies are not willing to pass up. And the COVID-19 pandemic has already provided a significant source of savings. Because we’ve shifted to a more hybrid way of working-both in the office and more often from home-but now because we choose to-substantial savings are being realized. For example, companies are saving an average of €10,000 per employee. This study by the auditors at PricewaterhouseCoopers (PwC) also shows that the benefits of working from home more often are substantial. “Employers are saving primarily on office rent. For employees, the main savings come from reduced commuting costs,” according to PwC. And less commuting also leads to fewer traffic jams, lower CO2 emissions, fewer accidents, and reduced investment in infrastructure. So there are opportunities there as well. However, hybrid work also requires a different management approach.

Greater Efficiency Through Consolidated Procurement

If we look at other areas where organizations can realize savings (and gain other benefits), a key step is consolidating procurement packages. This leads to greater efficiency and effectiveness, according to the “House of Control” knowledge base from the consulting firm Improven. In the areas of HRM and online tools-again, innovation driven by digitization-there are significant opportunities. So what should you keep in mind? Here are five key points to consider.

Digital Performance Review Cycle

Do you already have a digital performance review cycle? This is an important tool for fostering meaningful, substantive discussions between employees and managers-for example, to promote the development of employees and teams through tailored approaches. But it’s also a valuable solution for efficient discussions between managers and employees.

What kind of integrated solution do you need?

In practice, it’s common for online HR tools, tests, and questionnaires to be purchased from various sources. This approach has simply evolved over the years. However, consolidating these tools on a single central platform (such as hrmforce) can often be more powerful and cost-effective. So take a close look at which online tools you need and where they’re being procured. If your approach is still highly fragmented, this may be a good time to opt for a consolidated solution. Often, a combination of tools and questionnaires is needed for 1) selecting the best candidates and 2) developing existing employees. This helps employers place employees in the right roles, make the most of existing competencies, and better retain and engage employees. At the same time, employees also get to know themselves better and maintain an ongoing dialogue with their managers about their development. Because that, too, remains just as important. Another financially attractive aspect of using a single provider is the option to purchase unlimited access to tools for both job applicants and current employees for a fixed fee (this is possible with hrmforce).

Consider the various types of development discussions

There are various types of development discussions. Make sure to choose a single provider that effectively facilitates them all. An important consideration is setting up workflows for the various development cycles that organizations use-from the daily to-do list (Bila) and a basic development cycle to development and annual reviews, as well as organizing and monitoring the annual cycle. All these variations of the review cycle are supported by hrmforce’s software for the digital review cycle.

Don’t forget about employee satisfaction

Don’t forget about employee satisfaction in the pursuit of efficiency. This remains a key priority for ensuring strong performance and engagement, as well as for retaining employees and offering them new challenges when necessary. This is especially true given the previously mentioned structural labor shortage. We’ll need to take this into account in an increasing number of sectors through at least 2040. In employee satisfaction surveys, factors such as culture, career development, loyalty, work processes, management, and working conditions are key areas of focus. This is especially important for keeping track of changes and new needs, and for making timely adjustments where necessary.

Other Important Insights

The beauty of having online HR tools on a single platform is that it enhances measurability and can yield many more valuable insights. This is crucial for continuing to develop a competent workforce in a cost-effective manner. Which specific insights are important often varies by organization. Whatever your priorities may be, HR Analytics allows you to gain detailed insights into the talents, pitfalls, and performance of employees and teams. Features such as the 9-box grid can also be valuable for effectively assessing employees, for example, for your strategic workforce planning. In this “box” or “grid,” employees’ potential is plotted against their performance. This makes it possible to quickly gain a clear picture of the entire organization or specific units. You’ll also find these tools on the hrmforce online platform.