Too often, human resources are not yet the highest priority in small and medium-sized enterprises (SMEs). Not because the importance is underestimated but because of a lack of resources. Especially in the age of digitization, it is particularly important that companies also switch to online processes. This can be changed.
Massive lack of resources in HR departments
In very small companies, most of the time, the CEO personally takes care of all Human Resource Management topics – along with all his other tasks. In larger companies, there is an organized HR management. However, it is usually a one man or woman department. Although this relieves the management of all personnel tasks, the HR department has to deal with a large number of employees. In both cases, it comes down to the same result: They do only what has to be done. But bad personnel management can slow down a whole company. If, for example, appraisal interviews remain on the track because of a lack of time or if difficult team situations are only tackled, when the situation is on the brink of escalation, a company cannot develop further.
Good human resources work significantly influences the innovative strength of a company
In the first case, because employees do not get the chance to bring in new ideas. This leaves new innovation approaches behind. In the second case, the bad working atmosphere is detrimental to the productivity of a company. This is by no means exaggerated. On the contrary, the connection between a good climate and the motivation of employees is even scientifically evidenced. Researchers at the University of St. Gallen were able to measure 16 percent higher performance in companies with a good climate and a 12 percent higher innovation rate.
The value and economic benefit of proactive HR work would therefore be proven. But as long as human resources management lacks time and capacity because human resource administration devours all resources, the future sustainability of a business can be affected.
How HR software can help SMEs
There are a lot of solutions from the digital field that could make HR a lot easier. Instead, HR managers in small and medium-sized companies often carry out operations with difficulty on paper or control them cumbersomely across different departments and computer programs. Neither are they networked, nor do they exchange data. This leads to a delayed transmission of information, double-entry accounting and an increased probability of error, because when typing or copying information, decimal places have fallen by the wayside or entire personnel profiles have been stored incorrectly. If HR managers in small and medium-sized companies were to tackle these bureaucratic monsters, they would save a lot of work thanks to more efficient processes:
- The individual programs automatically exchange data, reducing errors, streamlining processes and eliminating the need for duplicate bookkeeping.
- Employees can be involved in administrative processes via self-service, which considerably relieves HR.
- Processes can be uniformly controlled across all departments using only one program that everyone can access via individual access rights.
Application areas for HR software
In which areas is the use of a HR software particularly useful? In a digital personnel file, for example, users always have all the relevant information of their employees in view: contact data, employment contracts, salary data and much more. Important HR documents can be added at any time, and messages with attachments from the employee overview can be sent quickly to authorized colleagues or supervisors. So, everyone has access to the current document. There are also digital assistants in human resources who help to create employment contracts. Users simply define individual key figures and characteristics. These are completed by the program in the significant places and saved as a PDF file. Done. This creates employment contracts within a few minutes.
When it comes to absence management, digital applications also considerably simplify administrative tasks. Personnel managers can view all employee absences at any time and can involve employees in the administrative process. In a personal calendar, they request leave, business travel or other absences, which then only have to be processed by the HR department. In the area of talent management, HR Software’s also offer promising services for small and medium-sized companies. For example, the employees’ needs can be determined in an employee survey using freely customizable questionnaires. With the aid of the results the company is able to improve the working environment. The questionnaire can also be used as a basis for efficient staff discussions. And there are also helpful digital tools for the subsequent target agreement. They can be used to record goals at different levels. The results of an appraisal interview can be stored in the personnel file. And: Each progress of an ongoing Target agreement is documented, so that developments in different directions can be recorded and, if necessary, timely adjustments can be made.
What is a justified price for an HR software?
What a modern HR software can do nowadays is well known to many companies. However, investments in new personal software are being rejected, especially among small and medium-sized players, as there is the big fear that they will be caught in a cost trap. But this fear is unfounded. Because the price of an HR software depends on the number of users. So, smaller companies pay less than larger ones. A further reduction of the costs results if only the modules of a software really needed by a company are used. Then HR finally has time to take care of what really matters: the people in the company.