How Small Businesses Benefit From HR Technology

The National Federation of Independent Businesses conducted a survey of 750 businesses with fewer than 250 employees. The results showed that 19.4% of companies’ budgets were spent on employee wages, more than double the next closest item – inventories at 7.7%. Along with being its most versatile resource, employees are also the most expensive for many small businesses.

It is safe to say the success of a company is highly correlated with the productivity and success of its employees. Such a significant role makes it essential that they are given every opportunity to flourish, and an effective Human Resources department can go a long way towards accomplishing that. This logic lies at the core of why more and more companies are turning to Human Resource Information Systems in order to improve not just the quality and efficiency of their HR departments, but their businesses as a whole.

To understand its significance, it is first important to understand what an HRIS accomplishes. An effective HRIS performs four main functions for the company: 

• Absorb new and promising technologies
• Simplify workflow
• Optimize precision, stability, and credibility of workforce data
• Simplify the deployment and collection of data

This functionality may be easier to conceptualize from an employee perspective– an HRIS lets the HR department focus more time and energy on their most dynamic job functions. By involving an HRIS, employees will be armed with the optimal technologies, but be spared the time spent researching and testing those technologies. All the data input and administrative minutiae associated with Human Resources is taken care of ahead of time, collected with reliable accuracy, and the results are readily accessible and clearly organized.

Rather than being bogged down with inputting payroll or researching the latest compliance and regulatory updates for their industry, the HR heads can focus on things like interviewing potential new hires, soliciting feedback from current employees, and conducting effective performance reviews- the aspects of HR that can’t be automated.

Obviously, an HRIS can be a source of increased efficiency for any sized company, but in the context of a small business, its effectiveness cannot be overstated. At a small business, all employees must wear many hats in order for the business to succeed. Sales personnel may also be responsible for their own scheduling, paperwork, and expense reports. The owner will likely have a role in everything from sales to marketing to budget planning.

Unfortunately, when roles shift throughout the day, human resources often do not get a high priority (although this is changing, as many companies become smarter about the opportunity cost of not properly addressing HR). In fact, all the functions of HR – payroll, tracking of benefits, compliance, etc. – will often fall to a single individual or be shared by a select few who already have other roles within the company as well – office manager, administrative assistants, accounting, etc. For them, when time and energy is already spread thin, the ability to reliably outsource a large portion of a company’s HR tasks can be a huge burden lifted. Ideally, with fewer tasks to focus on, they will become more attentive and less stressed, translating to increased efficiency and higher performance.

The purveyor of the HRIS will ensure that the outsourced responsibilities are also being addressed with a higher degree of efficiency and accuracy. The HRIS decreases workloads, while also allowing for an employee to focus on more interesting and productive job functions. 

The rewarding parts of HR tend to be human interaction and problem solving, not mindless data entry. Utilizing an HRIS to handle the mundane details, allows employees to focus on the human side of HR, and a company-wide ripple effect can be increased morale and focus.

At the end of the day, Human Resources requires a blend of dynamic human interaction and objective analytics of data. By utilizing an HRIS, small businesses can simultaneously improve their data collection and analysis, compliance, and utilization of technologies in Human Resources, while liberating their employees to focus on the areas where they can have the greatest impact. Contact us today if you're ready to partner with Navigate for your HR needs.