Cost reduction by introducing CHEQ: the “green” and “blue” dollars you can save

CHEQ's goal is to reduce administrative burdens, increase employee engagement and make internal processes more efficient. But to what extent can we put a forint figure on the concrete cost savings achievable by introducing CHEQ? In the example below, together with one of our existing clients, we calculated the achievable savings using our ROI calculator. In the calculation we distinguished between hard cost reduction - which we call the “green dollar” - meaning a precise saving that also appears in the accounts, and the soft saving - the “blue dollars” - which mostly stems from increases in efficiency and productivity, and for which only an estimate can be given.

Cost-reducing factors (“green dollars”)

The company in our example, which employs blue-collar workers, has 500 staff and an annual revenue of HUF 10 billion. During the joint calculation we found the following direct cost-reducing items:

• Reducing turnover: Using CHEQ demonstrably curbs turnover. According to the calculator, the replacement of 6 people per year becomes avoidable, which represents a cost of nearly HUF 1.92 million per person. The annual saving achievable this way: HUF 11.5 million.
  
• Electronic payslips and document management: Reduction in printing and administrative costs: HUF 41 thousand/year.
  
• Replacing HR administration by phone: Through automated self-service administration, 1,500 HR working hours can be saved annually: worth HUF 5.3 million
  
• Effectiveness of the employee-referral system: Recruitment cost saved through the increase in the number of internal referrals: HUF 2.4 million.
  
• Replacing alternative communication channels: The costs of the previously used kiosks, intranet and news TV: HUF 3 million/year.
  
• Replacing group all-staff briefings: By digitalising the employee briefing held 4 times a year for 500 people: HUF 3.3 million can be saved by recovering the working hours lost to the briefing.

Total annual saving: HUF 25.6 million.

At list price, CHEQ is available to a company of this size for HUF 4.9 million per year, so the direct saving from the “green dollars” is more than HUF 20 million per year.

ROI based on productivity growth (“blue dollars”)

Now let's look at the “blue dollars”, that is, the effect on the company's revenues of the increased employee satisfaction brought about by CHEQ. Naturally, the “blue dollars” cannot be determined as precisely, since they are mostly based on estimates. Yet even with a cautious approach we get an enormous result. It is worth thinking of the two types of calculation as follows: the hard “green dollars” are the real, certain cost saving, while the soft “blue dollars” are the bonus, the icing on the cake.

This bonus is the productivity growth caused by employee satisfaction and time savings:

• Satisfaction-based productivity growth: Based on referral willingness, with a cautious estimate we can assume a 1% improvement, which, given the annual revenue of HUF 10 billion, represents HUF 100 million in additional revenue at company level.
  
• Time-saving-based productivity: Time freed up through automated administration, converted into production value: HUF 9.6 million.
  

Total change in productivity per year: HUF 109.6 million

Conclusions

Introducing the CHEQ software brings significant savings even in the short term for a 500-person organisation. Reducing administrative and recruitment costs alone results in a positive balance of more than HUF 20 million. In the longer term, through employee satisfaction and time savings, CHEQ can create hundreds of millions in additional value, so the investment pays off many times over.

Based on the calculations, the software pays for itself in less than 3 months, and after that generates significant profit for the company each year.

Are you curious which further processes CHEQ supports the digitalisation of? Take a look at our feature list! 

Would you like to learn more precise details about the ROI calculator? Book an appointment or contact us at one of the details below:

Ákos Deliága, CEO

Call:  +36 70 294 0074

Write: akos.deliaga@talkabot.net

Book an appointment in my calendar HERE!

Blanka Csuti, Customer Success Manager

Call:  +36 70 790 9001

Write: blanka.csuti@cheqbot.com

Book an appointment in my calendar HERE!