Top 10 Financial Reports You Can Generate Using Quality HR Software

In today’s data-driven business landscape, one thing is becoming abundantly clear: better reporting leads to better decision-making. And when it comes to business reporting, there are few strategies that provide more visibility and holistic data than HR analytics.

Your people are your biggest investment, after all, but ultimately labour costs are also most likely to be your largest operating expense. Despite this, many organisations still make workforce decisions without access to meaningful HR financial reporting.

Thankfully, modern HR software is being developed to provide far more than employee records and leave balances. So the next time you explore your payroll management software, be sure to take stock of some of the real-time financial insights that the platform may be able to offer. These dynamic insights can ultimately help senior managers not only better control labour costs and improve productivity, but also reduce compliance risk for their enterprises, and make well-informed strategic decisions across various aspects of their business management.

Whether you’re a CEO, CFO, HR director, or operations manager, investing in the right HR reporting solutions will allow you to understand exactly where your workforce budget is being spent and where improvements can be made.

Let’s dive in. Here are 10 of the most high-impact HR financial reports every leadership team should expect from their HR software solutions.

1. Labour cost report

Main KPI: Labour cost as a percentage (%) of revenue

Did you know that for most SMEs, labour costs often represent between 50% and 70% of operating expenses? This majority expenditure actually consists of a variety of expenses outside of just core salaries and wages.

In fact, a comprehensive labour cost report should provide visibility over most if not all of the following expenses:

• Salaries and wages
• Superannuation contributions
• Payroll tax
• Overtime
• Penalty rates
• Bonuses
• Employee allowances
• Leave loading
• Total employment on-costs

With modern HR software, managers can compare labour costs across departments, locations, projects or business units, making it easier to identify cost blowouts before they become major issues.

2. Headcount report

Main KPI: Headcount growth rate

Knowing exactly who’s on the payroll sounds like a simple enough task, but for enterprises managing both full-time staff and casual or contract staff, it can naturally be trickier to keep track of wages.

Given how steep labour costs can be, however, there are major advantages to maintaining up-to-date and accurate workforce data for your business. This is where headcount reports can be a vital reporting investment, supporting workforce planning, budgeting, and future recruitment processes.

A comprehensive headcount report should include the following figures:

• Total employees
• Full-time employees
• Part-time employees
• Casual employees
• Contractors
• New hires
• Employee exits
• Department breakdowns
• Location reporting

3. Employee turnover report

Main KPI: Annual employee turnover (%)

It’s no secret that employee turnover has a direct financial impact on your business. Replacing a skilled employee involves recruitment costs, onboarding, lost productivity and training expenses.

As such, a quality turnover report should track:

• Resignations
• Involuntary terminations
• Turnover by gender
• Turnover by tenure
• Retention rates

A higher sustained turnover rate can be indicative of cultural issues in your business. Business leaders who maintain consistent visibility over their turnover trends are ultimately better equipped to identify and address these issues, ensuring greater staff retention and building improved stability and consistency in business output over the long term.

4. Leave liability report

Main KPI: Total leave liability

Unused annual leave and long service leave create significant liabilities on your balance sheet. Without regular monitoring, these liabilities continue to grow – especially so for enterprises with a growing turnover rate as well.

Thankfully, sophisticated payroll management software should be equipped to develop leave liability reports for business managers, supporting improved cash flow planning even during times of rapid change or in preparation of forecasted volatility.

A leave liability report should include:

• Annual leave accruals
• Long service leave accruals
• Personal leave balances
• Total leave liability
• Liability by department
• High leave balance alerts

5. Overtime & penalty rate report

Main KPI: Overtime cost (%)

Overtime is often one of the easiest labour costs to reduce, and one that can easily be mitigated with a strong overtime policy.

If the nature of your business demands that your staff are available for overtime, however, then overtime reporting is guaranteed to be a major asset to your business.

A detailed overtime report produced by your HR software should ideally help to identify:

• Departments with excessive overtime
• Weekend penalty costs
• Public holiday costs
• Shift loading
• Award penalty expenses
• Monthly overtime trends

With greater visibility over the above elements, business leaders can better optimise their rostering and workforce planning, ensuring greater value from overtime hours, and perhaps even a reduction in overtime costs year-on-year.

6. Training & development investment report

Main KPI: Training cost per employee

Learning and development should be viewed as an investment for your business, and not simply an expense. However, there’s no denying that training and development costs can impact business budgeting, which is why these particular reports can be beneficial for businesses with modest on-hand capital.

Training and development reporting should ideally measure:

• Training spend
• Compliance training costs
• Internal training hours
• External course costs
• Cost per employee
• Certification completion rates

Business leaders can use these reports to evaluate whether training investments are improving employee performance and retention, basing figures per each employee, department, or even as a whole (companywide).

7. Workers compensation & WHS cost report

Main KPI: Workers compensation cost per employee

As far as cost risk analyses go, one finding is always clear: WHS compliance is a major cost saver for enterprises of all sizes. Safety incidents don’t just affect productivity and business output, but can also significantly impact insurance premiums and long-term profitability and continuity.

Thankfully, more HR software developers are starting to include cost risk analytics into their reporting platform. You can gauge quality of WHS cost reporting by checking for the following metrics:

• Workers compensation claims
• Lost time injuries
• Return-to-work costs
• Safety incidents
• Insurance premiums
• Average claim cost

8. Payroll compliance report

Main KPI: Payroll accuracy rate

With fair work regulations evolving rapidly across the globe, payroll compliance has never been more important. And whilst particular national markets have their own unique compliance requirements, there are some markets that are more intensive with compliance changes than others.

Australia is a strong example here. In the new financial year, Australian employers are now required by law to process superannuation payments on the same date as wages, under a new law called ‘Payday Super’.

To stick with the example of Australian payroll compliance, here are some of the obligations that will need to be ticked off for payroll compliance reporting for Australian business owners:

• Fair Work compliance
• Modern Awards
• STP reporting
• Payday Super
• Superannuation
• Payroll tax
• Employee classifications

Note: quality HR software should also automatically identify payroll anomalies before they become expensive compliance breaches. Here, payroll compliance reporting can be seen as a proactive compliance measure for business owners and leaders.

9. HR budget vs. actual comparison report

Main KPI: Budget variance (%)

Every HR department should be accountable for its annual budget. Here, a budget vs. actual report can be used to accurately compare planned expenditure against actual costs.

Typical budget vs. actual spend reporting should include the following metrics to enable smart financial spending through the year:

• Payroll budget
• Recruitment budget
• Training budget
• HR technology costs
• Employee benefits
• Employee engagement programs
• Budget variances

10. Performance reports

Main KPI: Performance and culture

Every HR department should be accountable for its performance appraisals being done on time. A performance report allows executives to ensure appraisal get done to ensure culture, development and to drive best practice.

Typical reporting includes:

• Appraisals done
• Appraisals not done
• Gender pay reporting
• Development plans
• PIP and BPIP reports
• Once on ones
• Written warnings and other relevant citations

This report enables you to keep to the promises to employees regarding frequency of performance reviews.

Why HR financial reporting matters

The best HR leaders concern themselves not only with people management, but also with long-term business growth and development strategising.

Accurate HR financial reporting enables organisations to:

• Improve profitability
• Reduce unnecessary labour costs
• Increase workforce productivity
• Make better hiring decisions
• Improve employee retention
• Forecast future workforce requirements
• Strengthen compliance
• Support strategic planning
• Deliver better ROI from HR investments

Instead of relying on spreadsheets and manual reporting, modern HR software gives executives access to real-time dashboards that combine workforce, payroll and financial data into meaningful business insights.

What to look for in HR reporting software

When evaluating HR software, senior managers should look for a platform that offers:

• Real-time HR dashboards
• Customisable reports
• Workforce analytics
• Labour cost reporting
• Leave liability tracking
• Payroll compliance reporting
• Recruitment review
• Employee performance insights
• Executive dashboards
• Integration with other payroll platforms (i.e. Xero, MYOB and other ERP systems)

The right solution transforms HR from an administrative function into a strategic business partner.

Final thoughts

As you can see from all the report styles we’ve outlined above, reporting is no longer just an HR function, but rather a critical business intelligence tool.

In today’s competitive business environment, every workforce decision has a financial impact. Organisations that invest in modern HR software with powerful financial reporting gain a significant advantage.

With robust HR reporting software, business leaders can better control labour costs, improve workforce planning, strengthen compliance and make faster, more informed decisions.

Are you ready to transform your HR reporting? Discover how modern HR software like Happy HR can provide real-time dashboards, workforce analytics and compliance reporting to help your business make smarter people decisions.