Best HRMS For Small Business
HRMS for Small Business
A small business isn’t a mini-me of an enterprise company. Indeed, operating a small business is vastly different. Employees fill multiple roles. Margins are generally a lot smaller. Keeping consistent cash flow is an ever-present challenge.
In fact, millions of small business owners are wondering how they will keep the lights on next month, let alone make payroll.
Why do SMBs Need HRMS Software?
Because small businesses have unique challenges, they need a Human Resources Management System intentionally designed for their needs. Not simply a scaled-down version of enterprise workforce management tech. There is nothing ‘small’ about managing a small business. In reality, it’s quite complex. Software tailored to the unique needs of small businesses is essential in today’s business environment.
The Benefits of an HRMS for Small Business
Let’s discuss specific advantages of HR solutions designed for small and mid-size companies.
The first year of employment is crucial for a new hire’s long-term success. Great onboarding increases the odds that the new employee will stay long-term and be successful. Paper-based onboarding doesn’t create a positive experience for the new hire. Modern digital onboarding for the paperwork combined with the personal engagement is the new best practice.
Follow up a positive onboarding experience with employee self-service HR. Employee should be able to request PTO, see their schedule, swap a shift or access pay stubs with a mobile app.
Better Workforce Management
Most HR processes are transactional. This makes them ideal for automation. The right HRMS improves efficiency for employees, managers and administrators. Accurate and efficient people management helps small businesses experience less growing pains as they scale.
Better Monitoring of KPIs
It’s tedious to track metrics without automation – that’s why few small businesses do it manually. With HR analytics, small businesses can use big data like enterprise companies.
With a cloud-based HRMS, everyone can work from the same document. Updates (whether system- or user-generated) happen in real time. Stop wasting time wondering if you are working with the latest version of a spreadsheet.
Support Decisions With Evidence
As mentioned previously, HR systems track key metrics. But tracking is just the first step. Leverage the analytics to make better decisions and remove ‘gut feelings’ from the process. Data doesn’t lie.
Small Business HRMS Must-Haves
- Swift time-to-value
- Ease of use and a quick, hassle-free roll out
- High adoption rate
- Seamless payroll integration
Let’s discuss these requirements in more detail.
Affordability and Swift Time to Value
Small businesses don’t have the financial reserves of enterprise companies for an HR platform with high upfront and ongoing costs. As such, they need immediate ROI on their software spend. The best HRMS for a small business budget is cloud-based software with a subscription model.
With thin margins and little wiggle room, new software should make a significant difference in less than 30 days. We call this the ’30-days or less justification.’
Ease of Use and Hassle-Free Roll Out
We all expect software to have an intuitive user interface. That said, HR tech has a reputation of user-unfriendliness. Small business HR departments researching systems shouldn’t assume a product is going to work as well as the project management and collaboration tools they are already using. If you are in the market for an HR system, take advantage of free trials to see if the product lives up to the marketing claims.
Why is this especially important for small businesses? First off, HR teams in small companies are often responsible for training employees on new software and aren’t likely as tech-savvy as training specialists in large companies. For many organizations, it’s going to be the owner or a top-level manager doing the training.
In addition, small businesses generally don’t have implementation departments and are more likely to have downsized IT teams due economic conditions. Furthermore, small business IT is currently overwhelmed supporting the employee data security needs of remote workforces. They don’t have time to train for a complicated HR solution. A good rule of thumb: if the dashboard isn’t as easy as your favorite app, move on.
High User Adoption
This requirement is related to the previous ones. Ease of use is more likely to result in high user adoption, employee engagement and ROI. If HR tools and interfaces are too complicated, or too far out of the regular routine, nobody will use it. Small businesses without professional HR teams use HR software throughout the organization. With geographically-disbursed teams, an HRMS without a mobile app is a dealbreaker.
‘I don’t want to have to do this again, so let’s get it right now.’ While it’s true that small businesses can’t buy new HR software every few years, that’s not the only reason scalability is essential. It takes considerable effort and expense to change workforce software. Even thinking about changing workflows takes mental energy.
Most people, as a rule, are reluctant to overhaul their HR processes and routines. Indeed, that’s why small businesses keep manual processes for decades. As an example, one of our small business clients used paper timesheets for 35 years before automating time and attendance!
A small business owner I interviewed for this article pointed out, ‘The advantage needs to outweigh the pain, and I don’t want to have to endure this pain more than once if I don’t have to.’
Scalability is also necessary for rapid growth. If your company is fortunate to ramp-up quickly, your HRMS should enable rather than hinder your trajectory.
Furthermore, many small businesses are seasonal and need employee management systems that are elastic. No small business owner wants to pay for subscription-based software year-round if the business only has revenue for a few months.
Let’s talk about compliance. (You knew we would get to it eventually.) The best HRMS for small business has a compliance module tailored specifically to small businesses. This is because compliance requirements change significantly during early growth relative to later-stage growth. For example, when a company goes from 10 to 500 employees, compliance changes with each workforce milestone. In contrast, a large company that goes from 10k to 11k employees may have few, if any, compliance changes.
Payroll Processing Integration
Why is payroll integration paramount for small business HR software solutions? First off, integration reduces payroll errors which are potentially more damaging to a small business. In addition, downsized small business HR teams don’t have time to manually enter data into the payroll software.
Two priorities for small business owners are 1) save money for the company, and 2) have more personal time. If the owner is handling payroll and it takes a lot of time, they would rather spend that time generating revenue or taking a break from work.
Suppose an employee is handling payroll. The owner also has a strong incentive to save their time, as well. In a small business, it’s likely that payroll is handled by someone already performing many job roles. Extra time on payroll means they may not be getting their ‘real’ job done.
Another small business owner I talked to said if his team was falling behind, he would think ‘It’s because we have to run payroll again. I hate payroll, and why do I need all these employees if all we’re doing is working on the employee stuff?’
Indeed, a common small business pain point is wasting time on HR instead of making widgets.
WorkforceHub is Intentionally Designed for Small Businesses
WorkforceHub checks all the boxes for small business HCM. It’s affordable, provides immediate ROI, rolls out quickly and guarantees high user adoption.
WorkforceHub is your unified HR management software:
- Recruitment and applicant tracking
- Onboarding synced to employee records
- HR management
- Employee scheduling
- Employee benefits enrollment
- Time and attendance
- Reports and analytics
- Employee self-service portals
- Templates, alerts and checklists
- Mobile app for Android and iOS
- Employee performance management
WorkforceHUB is the HRMS software of choice for small businesses in healthcare, manufacturing, retail, construction, hospitality, and food and beverage. It’s a complete Human Resources solution that integrates seamlessly with your payroll system.
Are you using spreadsheets for human capital management? If you want to dramatically improve efficiency and productivity, switching to an HRMS is your low-hanging fruit.
To schedule a demo, visit WorkforceHub, the best HRMS for small business.
Updated September 30, 2022
Simplify HR management today.
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