Many small organisations manage all the various administration elements of the employment process through a combination of spreadsheets, Word documents and bits of paper. It’s usually an arrangement that evolves from the time the business takes on its first employee, and probably seems perfectly adequate and manageable, at least to begin with.
Plus of course until fairly recently, HR software was really something only realistically available to much bigger employers, and many small business owners may still perceive HR systems as being both costly and unnecessary in a small employer environment.
But things have changed and there are now plenty of much more cost effective and realistic software options, some specialising in small businesses, and with plenty of key benefits for business owners.
One of the main issues with managing HR processes and records manually is that it’s very time consuming for managers, and often in a small business, managers have many ‘hats’ on. Most HR software options come with a self-service element, which means employees themselves are actually managing many of the processes involved, or at least significantly reducing management administration time.
Even those processes which do need the involvement of a manager, such as approval of annual leave requests, are generally quicker and easier. Performance management and recruitment can also be made much less time-consuming for managers if HR software is used.
Having up to date and relevant data easily available can make decision-making in your business easier and better. It is possible for managers to identify trends, patterns and correlations, and take these into account, dealing with issues more effectively and more quickly.
Reduced sickness rates
Many small businesses without HR systems monitor sickness absence only sporadically, and sometimes just ‘in the head’ of the line managers. Frequently they are then surprised when they look back and see how much absence an employee has actually had.
An HR system will monitor sickness absence properly and easily, and will enable managers to identify much sooner than otherwise where there is (or might in future be) a problem.
Even the very fact that absence is being more closely monitored can be very effective in reducing unnecessary absence as staff might think twice before calling in sick if not strictly necessary, and at the very least, managers will be able to reduce absence by spotting a problem sooner.
Relying on manual systems involves a greater risk of human error, whether it is things getting lost, or not updated, or being missed. These errors are significantly reduced with software, because managers can be automatically alerted when, for example, someone’s contract is coming to an end, or someone needs updated training in a key element of their role.
Increased business efficiency
As well as efficiency of the actual HR processes themselves, a good HR software package can also integrate with other software you may be using, or link with processes not limited to the employment of staff, leading to improved streamlining in a wider sense.
More robust security
Using good HR software can dramatically improve the security of your employees’ personal data. There is a much higher risk of a security breach in circumstances where paper records and documents are floating about desks, or kept in filing cabinets. Keeping records online with password protection where possible is already more secure, and with an HR system you can usually restrict and control access to data on a need-to-know basis only.
For example you might have elements of an employee’s personal data which their line manager needs to see, but other elements which only the business owner or HR advisor needs to see. Limiting access to personal data to those who absolutely need it is a key data protection principle, and an HR system can help you comply with this.
If you’d like advice on whether an HR system would benefit your small business or want some help implementing it, do get in touch.