Follow the five pillar rule.The best way to find the TCO of a workforce is to look into the five aspects of HCM listed above. Why not just four or three? It's the one way to find the true cost of your workforce. It's imperative that a business has an accurate assessment of its workforce cost control, and the best way to do that is to evaluate every pillar to see the full picture.
Conduct a formal cost analysis.Within the last year, only about four in 10 mid-market companies have conducted a formal cost analysis on payroll, time and attendance and employee benefits administration alone, according to the 2014 TCO study. Very few have analyzed costs across all five pillars. This frustrates HCM professionals like me. We all go to the doctor to see how our body is functioning and we speak with retirement professionals to see what life after work will look like, so why not give your business that same kind of assessment for your most important asset -- your people? While most business leaders believe they are keeping TCO costs in check, most senior executives note in the study that cost analysis is too complicated, or that TCO is a cost that's very hard to track. In short, business owners do not have the insight they need to determine their TCO.
Take the leap from awareness to hard measurement.It's no secret that visibility into your business helps everyone make better and faster decisions. Shifting from TCO awareness to understanding and measurement is critical for midsize business owners to gain insight into the dollars they're putting behind employees and their impact on the bottom line. By measuring these costs, executives gain a layer of intelligence on spending that can put them on the road to understanding their true TCO of HCM, allowing them to better lead their business.
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