Human Resources is a field that is changing quickly, and technology has become a driving force, changing processes, improving employee experiences, and improving organizational success. As more and more companies use HR tech solutions, they all face the same problem: how to measure the return on investment (ROI) and show that their tech efforts are worth it. 

This thorough guide details how to measure the return on investment (ROI) for human resource technology implementations. It explains the methods and metrics that help companies understand and show the value they are getting, quantitatively and qualitatively.

SEE ALSO: Find Out How Technology is Impacting HR Roles and Processes

Understanding ROI in the HR Tech Context

ROI is a kind of measurement tool. Imagine you’re thinking about buying something – like a new tool for your job. You want to know if it’s worth spending money on, right? That’s where ROI comes in. It helps you figure out if what you’re buying will make you money and be really helpful.

But when we talk about human resource technology, ROI isn’t just about money. It’s like looking at the bigger picture. Sure, buying new technology might cost money upfront, but it can bring a company many good things.

Think about the people who work at the company – the employees. HR technology can make their work easier and more organized. It can help with things like hiring new people, training them, and keeping track of everyone’s important information. When employees find their work easier, they tend to feel happier and more engaged, like they’re part of a team.

Now, when all these employees are happy and working well, the company as a whole performs better. That means the company can do more, make more money, and be more successful.

Quantitative Metrics: Beyond the Bottom Line

1. Cost Savings

One of the clearest ways to determine the return on investment (ROI) is to compare how much money was spent on HR tech to how much it saved in other ways. For example, if an HR automation tool cuts the time spent on administrative chores by a certain percentage, the reduction in labor costs can be calculated.

2. Efficiency Enhancements

Learn about how HR tech in 2023 speeds up processes. Calculate how much time is saved per hire cycle because of the automated screening of resumes, and then multiply the saved hours by the hourly wage to figure out how much money is saved.

3. Reduced Turnover Costs

There are a lot of costs that come with losing employees. Consider the costs of hiring, onboarding, and teaching new employees when figuring out how HR tech in 2023 can help reduce turnover rates.

4. Training Costs

If HR Tech includes learning and development tools, you can determine how much your training costs will go down by comparing the cost of standard training to the cost of training that uses technology.

5. Compliance and Legal Costs

Compliance-checking HR tech can stop costly legal problems. Find out how much money could have been saved on fines, penalties, or court fees if compliance automation hadn’t been used.

6. Productivity Gains

Find out how much more productive employees are because of HR Tech. Think about things like how many jobs you finish in a day, how many projects you take on, and the quality of your work.

Qualitative Metrics: Beyond the Tangible

1. Employee Engagement and Satisfaction

HR tech in 2023 often makes things better for employees. Do polls or look at feedback to determine how happy employees were before and after the change.

2. Time Allocation for Strategic Tasks

When HR technology automates jobs that are done over and over, HR professionals have more time to work on strategic projects. Check how much more time is spent on jobs that add value, like developing talent and building a company culture.

3. Accuracy and Data Integrity

If HR Tech makes data more accurate, keep track of how many mistakes or differences there are less of. This has an indirect effect on how organizations make decisions and helps them escape making costly mistakes.

4. Managerial Effectiveness

How well managers use HR tech in 2023 tools for job reviews, feedback, and coaching can be measured. Check to see if these tools help employees do their jobs better.

5. Candidate Experience

Using metrics like application completion rates, time-to-hire, and comments, you can measure how HR Tech improves the candidate experience.

6. Cultural and Organizational Impact

Employee surveys and sentiment analysis can measure things like better collaboration, more openness, and a good change in the organization’s culture.

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Calculating ROI: Beyond the Numbers

Even though the method for figuring out ROI is simple – 

ROI = (Net Profit / Investment Cost) x 100 When figuring out ROI for HR Tech, it can be hard to consider all relevant costs and benefits, both physical and intangible. This includes the costs of setting up the system and keeping it running, training costs, and the full range of financial and non-financial rewards.

Tips for Effective ROI Measurement

1. Baseline Measurement

Before you start using HR tech in 2023, you should set a baseline by measuring the efficiency, cost, and employee happiness of your current processes. This gives a comparison point for measures after the change has been made.

2. Clear Objectives

For your human resource technology adoption, set clear, measurable goals. Whether you want to reduce the time to find new employees or get them more involved in their work, having clear goals will help you determine how to measure.

3. Getting information

Get accurate facts to back up your calculations of ROI. This could mean tracking how much time is spent on chores, polling employees, and gathering financial data.

4. Data Collection

ROI isn’t just a one-time number. Evaluate the effects of human resource technology all the time and change your figures as the technology gets better.

5. Involvement of Stakeholders

Include stakeholders from HR, finance, and operations to ensure all costs and rewards are fully understood.


To determine the return on investment (ROI) of HR technology, you need to look at it as a whole. Organizations can get a full picture of the effects of their human resource technology implementations by using both quantitative and qualitative measures. Understanding the financial and non-financial benefits helps organizations make smart choices, make the best use of technology, and keep improving their HR processes. As the relationship between HR and technology continues to change, measuring ROI is important to make sure that organizations stay on the cutting edge of innovation and create long-term value for both their workers and their bottom line. Embracing HR tech isn’t just about embracing technology; it’s also about embracing a transformative journey that improves the HR landscape and moves companies toward a future with more productivity, engagement, and success.

SEE ALSO: 7 Strong Reasons for Integrating Global HR solutions

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