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Copy linkWhat is the return on investment (ROI) from HR software?
Updated 4th February 2026 | 5 min read Published 3rd February 2026
HR is the lifeline of any successful business, looking after the most important asset: the employees.
As the workplace continues to shift, with legislative pressure from the Employment Rights Act and increasing demand to adopt AI, the role of HR continues to evolve and become even more vital.
To meet these demands, investment in HR software is needed.
However, as with any new venture, it’s important that you’re able to measure return on investment (ROI).
The challenge many businesses face with demonstrating HR ROI is knowing what areas to assess.
To support, in this blog, we showcase how you can effectively measure the impact of your investment in HR software.
What exactly is a return on investment?
Return on investment is a measure of what you’re spending (salaries and technology costs) and the output that’s subsequently delivered.
ROI enables businesses to measure the efforts and results in relation to pre-determined goals and objectives.
Why is it important to measure ROI in HR?
As with any department, measuring ROI enables you to track whether you’re heading in the right direction to achieve your goals.
If you find that you’re falling short, you now have the option to rectify issues and make improvements.
On the flip side, if everything is going great, you can analyse what’s working and try to replicate it.
Either way, data is gold dust, and arguably your most valuable asset for driving success.
Dispelling outdated views
In the past, HR has been viewed as a ‘nice-to-have’ as there wasn’t a direct number attached to sales or business growth.
This couldn’t be further from the truth.
HR’s role in fostering an engaged and motivated workforce can’t be overstated – simply put, HR keeps everyone on track.
How can you measure HR software return on investment?
To ascertain whether the HR software in use or under consideration will justify the investment, we have formulated a list for benchmarking purposes.
| Area | Assessment | Aim |
| Learning and development (L&D) | How many staff have completed training – basic or additional – in the last year? | Use HR Software to centralise your training in a single locationPrompt staff to take action and complete any outstanding training + provide managers with insights into who’s completed what |
| Feedback | How many people have shared feedback and provided new ideas for the business? | Use the HR system to survey staff and uncover employee sentiment |
| Retention | Has your employee retention rate increased or decreased? | Review your employee data to ascertain retention levelsUse the system to improve employee engagement and analyse problem areas |
| Absences | Are staff absences increasing or decreasing? Do certain time periods result in more absences? | Enable staff to easily book annual leave in the system, also creating a streamlined process for manager approvalAssess your absence data to answer burning questions |
| Benefits and compensation | How many employees understand their workplace benefits and how to access them? | Use HR software to prompt staff about benefit deadlines and direct them to a benefits portal |
| Company values | Are staff aware of your values and business goals? | Use HR software to communicate key business messages, such as an employee handbook, and track who has engaged with your communications |
| Onboarding | How long does it take for a new hire to go through the onboarding journey? | Digitise and automate the onboarding process, offering a clear view of where staff are in their journey and pushing them through to the next step |
| Recruitment | How many potential prospects drop out before being invited to interview? | Automate key stages of your recruitment journey, moving candidates through a high touch processClear visibility in the system shows where hold-ups are and who needs to take action |
| Employee engagement | Are staff happy and engaged in the workplace? | Use HR software to identify under-engaged employees and understand why |
Taking your people management to the next level
Hopefully, the above has offered some tangible guidance on the benefits of HR software and how you can measure success.
Ready for the next step? We have a handy guide that walks through the employee lifecycle, exploring common challenges and the role software plays.
IRIS: pain-free people management
At IRIS, we have a variety of award-winning HR offerings to equip you with the tools needed to thrive.
HR management solutions for UK businesses
Learn more
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