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Five reasons why SMEs need HR software

Frank Mittag

To save money, 54% of small business owners handle employment matters on their own. Not surprisingly, fewer than 50% of them are confident in their company's HR structure. 

This may be because, according to the same research, 82% of these executives have no formal HR training and only 23% believe they have access to the tools they need to succeed. 

The reality is that of all companies, small and medium-sized enterprises (SMEs) stand to benefit from HR resources the most because their long-term success hinges on it.

Today, we're sharing five reasons why SMEs need HR software, and how it can transform their business from the ground up.

Ready to learn more? Let's get started!

Hidden HR costs and concerns 

When SME business leaders, who are already stretched laser-thin, take on HR duties, the results can be detrimental to the health of both the enterprise and the employee.

How? According to a recent report, only 1 in 10 leaders who pull such double duty actually enjoy HR tasks. Moreover, just 35% of ad-hoc leaders would continue to take the reigns in this department if given the choice and 24% cite that HR responsibility has lowered their overall job satisfaction. 

Where do these burdens originate? Let's take a look at more findings from the report. 

Changing legalities

Of those surveyed, 78% of SME leaders explain that keeping up with the changing landscape of HR legalities is too much of a challenge.

Even if the regulations are beneficial, such as cost-cutting initiatives or those to improve workplace culture, it's difficult to stay abreast on the fine print 

Other team consequences

In addition, there are myriad other risks that SME leaders fear they may face if they continue at the helm of HR. Specifically, they're afraid their organisations will become weakened at these critical checkpoints:

  • Overseeing issues employee performance (60%)
  • Complying with laws and regulations (60%)
  • Resolving employee conflict (59%)
  • Providing team reviews or training initiatives (49%)
  • Collecting and maintaining employee data (46%)

Collectively, HR duties comprise around 20% of an ad-hoc leader's workweek. Over the course of a year, that's 700 hours! Thankfully, there's a better way.

Meet HR software.

How can HR software help?

Implementing a small business HR software solution can help SME managers automate tasks, conserve resources and save money (along with their sanity). Here are a few highlighted benefits. 

1. Time savings

Research shows that administrative tasks can comprise up to 40% of all HR duties. When SMEs leverage HR software, they're able to reduce their time spent on manually completing, filing and organising paperwork.

From processing new employees to handling terminations and employee disputes, pen-and-paper functions are plentiful. When a portion of these tasks is automated, managers are free to focus on more mission-critical work, instead.

2. Cost savings

What happens when that stack of folders on the desk shrinks as efforts are moved online? The SME pays less for paper. 

Moreover, they save money by improving functionality, as managers are able to better focus their efforts rather than multi-tasking themselves to half-capacity.

3. Data security and timeliness

While compliance with HR regulations is a chief concern of ad-hoc HR managers, it's easy to meet with HR small business software.

Functions including Employee Self-Service, simple role administration and digital employee files are easy to update in real time. This makes meeting industry standards, such as the General Data Protection Regulation (GDPR) a breeze.

4. Improved transparency

Are you currently handling time-sensitive tasks, such as holiday planning, time tracking, overtime, and onboarding via outdated and unreliable Excel spreadsheets? If so, HR software is the update you need.

Through a simple and clean interface, managers can find the data they need, without having to wade through the murk of inaccurate or old information. 

5. Cohesive company overview

Want to share general company policies and documents with your employees? You could print them all out and distribute them at your next meeting.

Or, you can direct everyone to log into the HR portal.

From here, you can set special permissions, list asset assignments and delineate organisational tools.

Why do SMEs need HR software?

Due to budget constraints and a lean operating model, SMEs often find themselves funnelling HR tasks into other departments for frugality's sake, alone.

Yet, SMEs need HR software, and here's why: Juggling acts always end. At some point, all those balls in the air come crashing down, especially if there's only one person responsible for keeping them up.

Ultimately, HR software improves communication between employees and human resources. It also increases process transparency and saves time and money with an optimised and error-free process.

Simplifying HR processes is easier said than done. Know how we get it done by starting your kiwiHR free trial!