How to prove the business case for new HR solutions

Sometime around summer 2019, HR directors started to notice a shift in the way internal budget discussions played out. They had lost their magic argument - they were no longer able to use GDPR compliance as leverage for obtaining budget.

The reason is simple: nothing much has happened since GDPR came into effect in May 2018. Companies either feel they don’t need to make drastic changes, or they have opted for a much lighter approach to GDPR compliance.

New HR solutions can make an HR professional’s job quicker and easier, but most solution providers are saying the same thing, and the bottom-line benefits for the rest of the company are unclear. With GDPR off the table, HR directors looking to improve processes feel like they are bringing a feather duster to a knife fight. Valuable, soft-selling points such as values and employee development may not resonate too well with CFOs and upper management. So, how can HR directors create a compelling business case for new HR solutions?

1 – Highlight the positive impact on other business functions

It is, of course, tempting to talk about how a new HR solution will save 6 minutes per recruitment, or increase payroll admin efficiency by 20%. The truth is, the business case for both in the eyes of the rest of your company is weak. Instead of talking about how your life will be made easier, switch your focus to thinking about how you can support your company’s business functions.

For instance, if you are planning to talk to your CFO, an HR solution that delivers a markedly improved salary review process is instantly more appealing, as it directly supports the finance department. Robust performance reviews are also extremely valuable for the CFO and CEO, as they empirically state who – and what – is delivering a positive return for the company, and where adjustments need to be made.

When it comes to C-suite in general, and board members in particular, a new HR solution that builds a process for succession planning helps future-proof companies in the face of unexpected change. If a senior team member were to resign, an HR director who can ensure the next person is in place and ready to take over is very valuable for company board members.

2 – Build a solid business case that uses data from the entire company

The normal way to build an HR business case is to collect the data you need, create an Excel sheet, and incorporate an ROI calculator. There is a major problem with this approach: when the case is brought to the CFO, it is immediately distrusted as the case was not built using data from the finance department.

A better approach is to move away from the siloed approach common in many companies and to talk directly with the CFO before building your business case. Have an open discussion about finance’s challenges and goals, then take the time to think about how a new HR solution can support their work. Finally, ask if you could work with finance data before building your business case.

This same approach can be used when talking to other business functions. Once you have everyone on-board, calculate ROI both on a department basis and for the company as a whole. The result will be a much more compelling business case that addresses both the individual needs – and overall goals – of your company.

3 – Work with solution providers that help you build new ways of working

HR solution providers are usually strong when it comes to data capture and platform flexibility, but a little weaker when it comes to developing processes and best practices. A common approach is to build exactly what a company wants. Yet in many cases, companies don’t know the best processes for things like employee engagement surveys and performance reviews, especially when it comes to an organisation of their size and shape.

Once again, this is because both companies and solution providers tend to work in silos, and best practices don’t tend to get shared. Identify HR solution providers that focus on first identifying the internal processes that matter most and provide a flexible system that can support building your own needs. Once this is done, they bring in external experts who can help create best practices for a company like yours.

Finally

At the core of HR is employee data. When properly utilised, actionable insights derived from high-quality employee data can give HR directors the ability to change an entire organisation for the better. Well-structured processes that, for instance, survey employee engagement and enable performance reviews can reveal the true strengths and weaknesses of your company.

HR directors can help break down internal silos, guide management to address needs, and predict future challenges before they become major issues. By working to raise your colleague’s level, you will prove your worth and demonstrate your value.