Reasons Why SMEs (Small and Medium Enterprises) Should Adopt an HR Software

July 16, 2021
Nandinee Biswas
HR software for small and medium enterprises HR software for small and medium enterprises

Starting and running successful small and medium enterprises (SMEs) always depends on how efficiently you are able to handle your human resources. It is about having well-organized and effective HR processes in place that ensure your employees and team members have every data they need. This information availability improves inter-team collaboration, increases employees’ reliability on the management, and enhances their productivity.

Luckily, technology has evolved to allow massive strides in the entire HR management process. What was once stored in stacks of paper files and dusty old cabinets, is now streamlined to offer extensive accessibility. Thus, HR software has made its way to make managing people easier. It does this by keeping track of all the tasks, data, and processes involved in workforce management.

HR Management Challenges of SME Businesses

According to a CII survey, “20% of medium and 80% of small-sized businesses have no HR departments.” The reason being, firstly, small and medium enterprises are more growth-oriented and their key focus is on sustainability and reaching a bigger scale of business. For most of them, having an independent HR department is not their priority at this stage.

Secondly, SMEs have smaller teams and have to operate under budget constraints. They perceive that having an HR department would bring an expensive burden on their budgets. Therefore, choose not to have one.

Often, this school of thought leads to complicated work situations such as inefficient hiring and retaining of right talents, lack of effective policies in place, unfair performance appraisals, improper personal development methods, limited scope for training employees, inappropriate payroll and compensation, and so on.

HR management process is not just another administrative function, when handled appropriately it can help businesses make people-related decisions in case of difficult situations.

“Gartner projects that by 2025, 60 percent of global midmarket and large enterprises will have invested in a cloud-deployed HCM suite for administrative HR and talent management. However, they will still need to source 20 percent to 30 percent of their HCM requirements through other solutions.”

6 Key Benefits of HR Management Software for SMEs

When you have a modern HR management system, it gives easy access to your employee data and payroll information. It enables businesses to build a pool of skilled workforce and provide them with appropriate career advancement opportunities.

The software solution offers you a holistic view of the employees through a single platform. Extensive information helps in making strategic decisions for hiring, training, and retaining the right people to pursue the business objectives.

Here is why SMEs should adopt HR software:

Align employee efforts with business goals

A streamlined HR management system enables you to identify the capabilities of each employee, realize their individual goals, and allocate tasks aligned with your business objectives. When goals are predefined, it helps employees to understand their contribution and prioritize workflows to remain engaged and motivated for improving their performance to achieve their assigned goals.

The human resources information system (HRIS) helps SMEs to make data-driven employee management and create an agile organization.

HR Management System

Run error-free payroll

With manual payroll calculation, human errors are natural. One of the major drawbacks of using traditional methods for payroll processing is that it can lead to costly errors. Also, your employee may find it challenging to manage the criticality of payroll calculation along with their existing workloads.

With manual payroll calculation, human errors are natural. One of the major drawbacks of using traditional methods for payroll processing is that it can lead to costly errors. Also, your employee may find it challenging to manage the criticality of payroll calculation along with their existing workloads.

Better utilization of your admin team’s time

Digitization has improved the efficiency of the administrative team. Once an HR software is successfully implemented, it automates the majority of the processes, saving your admin team from doing mundane and otherwise time-consuming repetitive tasks.

The system captures staff information to ensure that all data is easily available for instantly generating detailed reports that would provide you with deeper insights on employee performance. This helps managers set goals for employees, better analyze their progress on each goal, and their training needs.

Improved employee experience

When your employees need to spend time searching and gathering information related to their employment, they fail to contribute complete effort towards important tasks at hand.

An automated HRMS with an integrated employee self-service portal empowers employees to get access to all their information such as payroll, leave balance, increment, appraisal, and so on. This information accessibility improves employee experience and boosts their morale, thereby increasing their engagement and satisfaction.

Customizable system to cater to your needs

Every business has a different HR policy set up for how employees are salaried, appraised, and internally organized.

The new-age HR software is available with customizable features. This means now you can choose the functionality of your HR platform as per the needs of your HR department along with the provision to make data and policies accessible to employees. A customized system not only reduces the workload on your HR team but also ensures that all requirements are adhered to.

Data security and accessibility

Even for small and medium-sized business traditional ways of recording and accessing employee data needs spending considerable amount efforts.

HR management software helps you easily manage employee records. The system stores data digitally which can be retrieved immediately when needed. And since the information is stored on cloud, the service providers take necessary steps to ensure your employee data is secure.

Why Right HR Management System Matters?

Advanced HR software for SMEs not only gives easy access to employee information and automates complex workflows but also increases efficiency and reduces time on redundant activities.

Focus Softnet offers customized HR and payroll systems to help SMEs drive the well-being of businesses by nudging employee engagement, improving productivity, and stimulating growth. Fill in the form to know more about how it works.

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