Role of HR Management Software in the Growth of Small Businesses

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By Nitika Rawat
6 minute read ● June 26, 2020
HR Management Software

A survey conducted by CII states that 20% of medium and 80% of small enterprises do not have a dedicated Human Resource Department. Most small to medium-sized business owners consider but dismiss the idea of using HR Management Softwares for their business due to budget constraints.

As small businesses thrive, their HR administration becomes more intricate. There comes a time when critical activities that drive the business like employing new hires and paying employees outgrow paper files and stop fitting on excel spreadsheets. This is when using a new solution that simplifies HR processes comes into play.

Presently, you may not have an army of employees across the globe. However, it is a necessity or mere luxury to show more attention to human resources. However, it is disastrous for a small business not to hire the right kind of people and attract too much attrition.

Why do small businesses need a focus on HR?

  1. Employees First: The success of any small business relies on its employees. People are the key success differentiators for these businesses. If employees are carefully selected, nurtured, and maintained, they will take care of the customers and ensure business continuity.
  2. Synchronize it: A great CEO can synchronize the effort of people, cash flow, targets, expansion, and keep the business running, profitably. If we deploy non-efficient people, who do not put enough effort, this synchronization will fail, and a small business CEO can not afford this. So, once again, human resources play a vital role.
  3. The Compass: A small business needs HR Office as it acts as a compass. Apart from your sales figures, if there is one variable, which would tell where you are heading, your HR Information is. To a great extent, a small business will assess its growth through its ability to sustain people for a longer time and build an excellent career.
  4. Policies: When you seed a new business, it is quite unusual to put all systems in place. While expanding, written rules are mission-critical as this can enable consistency to a large extent. For example, a registered employee Leave Policy, when circulated among employees, can help cut unnecessary queries, policy violations, unplanned leaves, etc. HR Office can put in to practice the policies in a better way.
  5. Time is money: You want your employees to put their honest and best efforts, right? Self-discipline is excellent, but we can not expect this all of a sudden. On top of this, managers can keep a proper track of productivity. Standard practices will evolve over a period. HR Office can watch the progress and help the organization to get along with good work culture.
  6. Last but not least: How long you print paper forms, generate memos, cut the check, and scrutinize spreadsheets? This is too tedious, and it consumes precious time for key stakeholders.

Human resource management is a tedious and time-consuming process. Holding one of the most significant assets of a business, it is vital to manage and employ the available resources in the best possible method. An automated HR system offers a wide variety of benefits that ideally suits your unique business requirements.

How HR Management Software solves woes of Small Businesses?

HR Management Systems in small businesses are handled through an endless number of spreadsheets and folders. Even with tighter budgets and restricted resources, small businesses still need to centralize the human resource workflow efficiently. The HR chores in small companies may look manageable and straightforward. Still, a slight miss may lead to uncontrollable damage like - fine and penalties due to non-compliance, high attrition leading to lack of sufficient talent, delay in production cycle due to insufficient staff, etc.

A well-structured Human Resource Management System not only saves considerable hours of manual chores but also motivates the employees and reduces attrition.

Here, we discuss some of the benefits:

Streamlined Workflow with HR Management System

Workflow with HR Management System

Using HR software eases the burden on the HRs to follow up on several tasks and makes the process very smooth. Each stakeholder can track the workflow and follow a process without the constant intervention of HRs. The on-paper activities that are deemed as redundant and monotonous can be easily handled and automated using HR software. This includes activities like employee onboarding, payroll processing, annual leave management, managing leave and attendance of the employees with zero manual efforts. The leave application and approval process is managed through the software in a processed and streamlined manner. In a similar way, with HR software you can track the attendance of employees without the need of maintaining records on physical registers. Efficient HR and Payroll software let you track the employees' attendance across multiple locations without any manual intrusion.

The tasks that require inputs from various departments within the organization can be easily handled and streamlined with HR software. For instance, while processing payroll, the payroll admin can automatically take inputs from the HR software rather than constantly following up with various departments. This not just saves a lot of manual efforts of the HR and admin, but also saves a lot of time. Further, timely reminders and alerts are an additional feature of HR softwares that help in keeping the process time-bound and disciplined.

Improved Employee Experience

HR software are instrumental in improving your employees' job satisfaction levels - which indirectly improves their productivity at work. Facilities like leave application through the software - with no human intervention, applying for reimbursements, attendance regularization, access to employee engagement portal, mobile application for essential information like Payslips, From 16, etc. accentuate the employees' experience.

Improved Employee Experience

Further, engagement portals where the employees can communicate among themselves can help the employees to feel heard and united. Many actions like regular recognition of employees, wishing birthdays and anniversaries on the common forum of HR software can help you build a good relationship with your employees, making them feel recognized and valued. This can have beneficial consequences, such as lowered absence rates, boosted performance, and more satisfied workforce. This is a crucial advantage for a small scale business, where the work dependency on each employee is very high.

Using Free HR software, you can access more relevant and analytical data immediately available makes decision-making easy. Poor decision-making can arise from having inadequate information or a lack of correctly interrelated information. Good quality hr software allows for a number of relevant areas to be updated simultaneously and can ensure that you remember to input useful and important information on all aspects of human resources.

Better & Informed Decisions

Relying on spreadsheets for managing and recording data might end up producing silos of non-related information. Lack of proper information leads to poor decisions.

Blog-Banner-1Role of HR Software in the Growth of Small BusinessesWith HR software, you can access more relevant and analytical data instantly. Hence, this makes decision-making simplified and easy. Using good HR software, you can access multiple customizable reports. Such reports aid in better decision making for your organization. For example, when working on appraisals, good HR software makes it easy for you to find and analyze the employees that are crucial for your business and need recognition.

You can make essential decisions with the data organized and systematically collected by HR software. The labor demanded to get the equivalent insight using a paper-based system makes such an analysis unfeasible. Additionally, being able to provide logical and analytical records will also cement your credibility with various stakeholders.

Compliance with Statutory Laws

There are several statutory laws that need to be followed when you run a business. Through good HR Management Software, you can quickly and efficiently comply with all the regulations stated by the government. A lot of your organization’s time, effort and money go into ensuring that payroll is compliant through a statutory audit. From employee’s fair treatment of labor to protecting the company from unreasonable wage or benefit demands from trade unions or aggressive employees, every company faces a worrying number of potential legal issues relating to compliance.

However, it may never be a company's intent to break these laws, but without necessary protection, it may easily slip through the cracks. This is where a good HR software would help you be compliant with the laws. A good HR software would be able to send automated reminders to you when action needs to be taken. Hence, your company's compliance with regulatory requirements will be much improved.

Cost Savings

Cost Savings

In addition to the less tangible costs such as efficiency or productivity of employees, a good HR system will help you save money. With a HR Management Software, you'll be able to manage more employees than without a software. Hence, this will help you in reducing the amount of money that you'f pay to an HR personnel for doing the same tasks that can be done by an HR software. Hence, in the longer run, you'll save a lot of money.

The Bottom Line

By using good HR Management Software, you can align your business and HR objectives, enhance the efficacy of conventional processes, and make critical decisions with clarity and transparency across your organization.

If you are looking for a cost-effective and best-in-class HR software to manage your HR and Payroll tasks, get a free demo of greythr HR software and see for yourself. greytHR is India's leading HR and Payroll software with over 9000 customers, across more than 150 cities!

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