How Online HR Software is Useful for SMBs
I recently came across this post on why SMBs need a solution such as online HR software to manage their workforces which raised some interesting points, and decided to elaborate on them to come up with a more complete picture of why this is so. SMBs or small and medium businesses are characterized so mainly because of the strength of their workforce – a workforce of less than 100 constitutes a small business and anything from that to a thousand can be characterized as a medium business. Now, the thing about these SMBs is that they do not have a lot of resources, both in terms of capital and manpower, to be dedicated to all aspects of workforce management.
Managers and executives are more focused on improving the bottom line and growing the organization than on hiring more resources for HRM and focusing on employees and their grievances. They view HRM as just another business function that needs to be there for the smooth running of the organization rather than as a strategic function that is contributing to the success of the business. Indeed, in some small and medium businesses, line managers themselves double up as HR executives, and there are no formally designated HRM business functions. And they are also not to be faulted, after all, they have everyday survival issues to consider before they can increase spending on employees.
This is where online HR software comes in. Here is why it is useful:
One of the most important aspects of HRM is decision-making. HR professionals have to constantly and consistently make decisions like whom and how many to hire, whom and when to promote, whether the organization is over-staffed or under-staffed, and so on. Without a thorough analysis of the data available at hand, which is cumbersome and time-consuming, many SMBs don’t follow a rigorous approach to get there. They take decisions on an ad hoc basis, which might harm the organization going forward. In not repeating this mistake, and in making data collection and analysis easier and simpler, HR software is very useful. Decisions can now be taken in a logical and data-driven manner, which make them more likely to be helpful. Also, when you have data at your fingertips, it becomes easier to be transparent and resolve employee grievances faster.
Needs Fewer Resources
SMBs are characterized by their small workforce. It is often simply a matter of not being able to hire more resources as they cannot afford them. However, the professionalism of the operation should not be compromised upon, or the whole purpose of the exercise is defeated. In balancing both, that is, achieving professionalism with lesser workforce, HR software will be very useful. The software sets up the whole process and automates many of the tasks involved so that the whole organization’s workforce can be managed by less than three resources. In fact, this writer is evidence of a single HR representative handling an organization of upwards of hundred employees.
Take time-consuming tasks in recruitment and performance management. There is no need to do things again and again – when you program the software once, you have it set for eternity unless you change the settings again. So, next time you have to prepare job descriptions or hand out offer letters, there is no need to start from the scratch – just use the templates or have them automatically set and filled for you. All in all, all those tasks that were unwieldy and needed a big HR team to handle, you can now do with a fraction of it.
One of the disadvantages of going for long and cranky on-premise deployments of HR software is that scaling up can be difficult. When the workforce is upgraded, and you need upgraded software, you again need to go through with the whole deployment process again. Another disadvantage is that you will not be able to choose the modules you want, and since the cost of the entire package might prohibit from SMBs from deploying it at all.
Both these issues can be resolved with online HR software. With online software, scaling up is a simple matter of clicking a few buttons. As and when you need to add more employees, you talk to your vendor and he will simply increase your employee limit to whichever level you want. Thereby facilitating the addition of new employee’s into the system easily and instantly.
Also, with online software, you have the benefits of the modular architecture, which means that vendors have the flexibility to offer the solution to you in packages. Take training and development for example. Not all small and medium businesses focus on training and development in the formal way – whatever training happens, happens on-the-job, since they have no time or the resources. When there is no formal training, why would they need the training module offered by vendors? Why should they not have the benefits of the software if they can’t pay for what’s unnecessary for them? Since the online solution is built in modules, users can choose which ones they want to deploy, and the ones which they don’t need, and therefore save money. It is for this reason that many vendors offer their online solutions in different packages, with each one consisting of what is essential for organizations to run their HRM functions as per the demands of the situation.
Knowledge and Document Management
One of the great things about online HR software is that it also doubles up as other solutions. When you deploy this software, no more would you need other solutions such as document management software or knowledge management software. HR software includes modules that will help you with this and more. One of the important tasks of HRM is to collect and store employee documents like their previous experience letters, their education certificates, and so on. For too long, organizations have been doing this the time-consuming and tedious way of paper documents and storage containers. While some have upgraded to soft copies of the same, these soft copies are stored in folders in employee systems rather than by using any software. This creates problems in storage and retrieval, not to mention the issues that can result from giving individuals access to important organizational data.
Since investing in a standalone document management solution might not be possible for everyone, they will find the document management capabilities of the HR solution really useful. The solution allows HR professionals to store and retrieve documents, and it also allows them to automate certain document-related tasks. All the documents and knowledge are now stored centrally, with the right people being able to access it on demand whenever necessary. These documents are protected, and an audit trail is established, so that there is no scope for mismanagement of data.
Extension through Integration
Just as they need an HR solution to manage their workforce, organizations would also need other solutions to manage other aspects of their business. Also, sometimes, they might need more than what the HR solution is able to offer them. Take the example of CRM software for the first case – many SMBs use online CRM software to manage their sales and marketing efforts. For the second case, take the example of survey software – organizations would like to survey their employees at the end of the year or for performance appraisal sakes, and their HR solutions might not come with these capabilities.
However, it is also a bad idea to use standalone solutions, since people and teams need to collaborate with one another, and standalone solutions are a pain for collaboration. Either they don’t work well with other applications, or there needs to be a lot of effort put in manually transferring data from one solution to another.
To avoid all of this, you have integration. Rather than using standalone applications, it is a good idea to integrate these applications together, and extend the scope of the core application to handle all these tasks so that you have one central hub to manage everything instead of multiple solutions to manage multiple tasks. Integration not only helps collaboration but also eliminates silos and process inefficiencies.
To conclude, small and medium businesses might not need all the features of the complete solution that they might not be able to afford. Therefore, a solution like online HR solution will give them everything they need at a more affordable price than they otherwise will have to pay.
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