Why HR software is important for small businesses?
There are several factors that make an HRMS particularly beneficial for the smaller or medium-sized company:
- Legislative compliance: labor laws (both federal and state) require businesses to undertake record keeping responsibilities regarding various issues, including healthcare and tax codes. Such legislation and regulations are subject to change – sometimes frequent – and without a dedicated HR team, it can be difficult to keep up to date. An HRMS reduces errors and more importantly, the sanctions that can be applied for non-compliance.
- Competing for staff: the labor market is competitive and smaller businesses often find it difficult to compete for talent with their larger brethren. For a small investment, an HRMS can make your recruitment process more efficient, enhancing your employer brand in the eyes of potential applicants.
- Ready-made systems and procedures: a smaller business has the same need to manage its workforce effectively but usually has less time and resources to invest in devising efficient ways of doing so. Performance management is a good example in that whatever the size of your operation, you depend on employee performance. Many HRMS include ‘plug-and-play’ processes, including performance management, which can be readily adopted by managers, the system prompting them to take necessary actions at the appropriate time.
- No dedicated HR staff: the umbrella for the above factors is the fact that usually, a small business will not engage staff purely to deal with HR matters. Often, human resources is an add-on responsibility for a single manager or executive. That person usually appreciates any help they can get and the right HRMS offers plenty of support.
- Better information management: all employers are required to keep employee data. When that data is recorded on spreadsheets in your office (paper or otherwise) the security of that data is your responsibility. With an HRMS in the cloud, the contractual responsibility lies with your HRMS supplier. What’s more, with a cloud solution, you are likely to be able to access that data anytime and from anywhere as long as you have an internet connection. And you can offer your employees similar ease of access to their own personal data.
- A paperless office: filing cabinets, folders full of hard copies, you know how tedious, time-consuming and error-prone paper documentation can be. Any HRMS offers you a way out. Maybe you won’t be 100% paperless, but you’ll most certainly have a lot less HR documents to file!
- Better management of your workforce: this is an obvious maybe, but think about how technology could transform your approach to attendance, employee training, recruitment, and payroll.
Finally, think about what message an HRMS will send to your workforce. As software specifically focused on better people management, an HRMS represents an investment in your people. A sign that you take your responsibilities seriously, are meeting your employer obligations, and are willing to include them in the process (self-service!) – a definite boost to employee engagement.