For business leaders, keeping costs low and the bottom line in check is always top of mind. What most people might not know is that the total cost – or the “Big Number” – of managing a company’s employees ranks second in terms of daily worries of senior management.
Business leaders know that their employees are a critical part of their business. But do they know how much they are spending on their workforce, or if they are managing it well? According to the ADP Research Institute’s® Total Cost of Ownership Study, seven in 10 HR decision-makers at midsized companies say they are keeping up with workforce management well.
But while they have a sense of confidence in workforce management, challenges prevail when it comes to what they know about human capital management (HCM), its costs, and their own HCM performance. Even more, 54 percent of leaders surveyed said they worry daily about whether they can afford it.
So what happens when the “Big Number” is determined through a rough estimate? The result is that businesses tend to grossly underestimate HCM costs. Moreover, their seemingly constricted definition of what constitutes HCM casts doubt on their sense of confidence about how well they are managing all of these functions – including payroll, employee benefits administration, HR management, time and labor management, and talent management – in a complete manner.
ADP helps businesses every day determine how well they are managing their workforce and the costs associated with HCM. From understanding how human capital should be managed to educating businesses on best practices and evaluating their “Big Number,” ADP has the expertise to help senior leaders navigate this critical area of their midsized business.
This article originally appeared on the ADP@Work Blog.