A wake-up call for finance leaders: Why manual HR is quietly draining your bottom line

This article is a guest contribution by Phil Coxon, Managing Director at Breathe.

In many SMEs, HR and Finance are seen as two entirely separate functions: one focused on people, the other on numbers. But in reality, when they operate in silos—particularly with manual or outdated tools—it’s the business that bears the cost. 

At Breathe, we support thousands of small businesses, and one pattern I see far too often is this: companies sticking with manual HR processes under the assumption that they’re saving money.

They’re not.

Manual HR creates the illusion of efficiency while quietly allowing costs to seep through the cracks. And for finance leaders looking to control costs, improve margins, and tighten governance, this should be on your radar.

The real cost of “Business as usual”

Let’s call it what it is. Manual HR means spreadsheets, endless email trails, paper-based approval chains, and rekeying data between disconnected systems. It’s labour-intensive, error-prone, and ultimately unscalable.

Here’s the financial lens:

• Wasted time equals hidden salary costs.
• Human error leads to payroll inaccuracies, compliance risk, and reputational damage.
• Delays in onboarding reduce time-to-productivity and damage first impressions, which can undermine your employer brand before new hires even start delivering value.
• A lack of audit trails opens the door to fines and governance issues.

We’d never accept this level of inefficiency in our finance tech stack. So why do we tolerate it in HR?

Disconnected systems = Disconnected spending

Fragmentation is a major issue.

You might have one platform for payroll, another for absence tracking, a spreadsheet for recruitment, and a finance system that doesn’t speak to any of them. The result? Critical people data is scattered, making it nearly impossible to forecast accurately, manage budgets, or make confident business decisions.

When headcount planning becomes guesswork or salary changes slip through the cracks, finance teams lose their grip on people-related spending—which, let’s face it, is one of your biggest cost centres.

It’s not just inefficient. It’s a risk.

Why finance should care about the employee experience

Tuning HR processes reshapes how the business performs, not just how it hires.

When employees can self-serve simple HR tasks — updating details, accessing payslips, booking time off — you reduce queries, free up internal time, and boost satisfaction. And satisfaction feeds into performance, not just retention. Lower churn means reduced hiring and training costs. Higher engagement drives productivity and customer satisfaction.

As a finance leader, you do a lot more than manage the books. You shape the conditions for long-term value creation across the entire organisation.

 The employee experience is part of that equation.

Onboarding: Where cost meets opportunity

Think of onboarding as your runway to productivity.

When done manually, it’s a drain: printing contracts, chasing documents, managing start dates on Post-It notes. But when you automate onboarding, it becomes structured, trackable, and sets the right tone from day one. It reduces admin, gets people productive faster, and sets the tone for performance and retention.

What an HRIS can unlock for finance teams

This is where a modern HRIS (Human Resource Information System) delivers.

For finance leaders, it’s not just about convenience. It’s about control:

• Real-time visibility into salary, leave, and headcount trends.
• Automated approval flows for pay changes and new hires.
• Integrated data that ties directly into budgeting, forecasting, and compliance.
• Audit-ready records that reduce exposure and save time at year-end.

You don’t need to scale admin to scale your business.

HR and Finance: Better together

The most effective SMEs we work with don’t leave HR tech decisions solely to HR. Finance leaders are in the room, asking the right questions about ROI, scalability, and risk mitigation.

When HR has the tools to work efficiently, finance benefits from:

• Fewer errors and cleaner data
• Sharper forecasting
• More effective use of people resources
• Stronger alignment between cost and capability

This is where alignment becomes impact.