The cost of managing people in a small business is relatively much, much higher than at the enterprise level. HR software, then, delivers more value in these smaller organisations.
The rules, regulations and mounds of other things small- to medium-sized (SME) business owners need to do to stay on top of things these days are increasing all the time.
So the more that employees or software can free up SMEs to drive their businesses forward, the better the business will do, right?
Let’s explore this connection between software and people.
We all know the efficiencies and cost benefits software can bring—especially HR software in small businesses where people management is a vital business process.
But why is the uptake relatively slow compared to larger organisations?
We know HR deals with sensitive data. But many organisations stall on decision-making related to deploying HR systems – and, after data protection issues have been addressed, it’s not usually about that or even price.
Usually, it’s because the word ‘automation’ strikes fear deep into the hearts of anyone in a people management role.
Understandably, employees panic that their jobs may be on the line.
There’s also fear of change. Despite the benefits software solutions bring, office managers, general managers, owners, and admin staff all question why they should change and risk going backwards when their existing systems work – even if these systems are inherently flawed, insecure, paper-based, or require manual processing.
They might also worry about being able to operate new technologies.
It makes sense for SMEs to use software to help their business get on top of mundane tasks. But why doesn’t it happen more often?
One reason is that many employees – especially those in HR – push back against adopting new software for the reasons stated above.
There’s a presumption by most SMEs that everyone in their firm is as interested in making a success of the business as they are. This isn’t always the case.
The hardest part of running a business is managing people. To be successful, you need to delegate and trust people, right? So how do you get this balance right?
Software can reduce the amount of time it takes to carry out tasks, so there’s a cost benefit analysis on whether you buy, lease, or rent, and which software will best move your business forward, making it profitable.
When you’re considering software to help you automate processes and tasks in your business, this need often comes from the people who work with SME business owners or from the business owners themselves.
So why don't more SMEs use software if these solutions lead to their businesses becoming more profitable?
John runs a small tech company. He’s a developer whose minimum viable product (MVP) matches a need in the market. He’s built on his initial sales, and the business continues to grow.
John has little experience in dealing with people other than fellow techies. So, one of his first hires was Mary, an office manager who runs payroll, handles admin tasks, and keeps the office running smoothly on a day-to-day basis.
John’s initial recruits were people he knew. Most of them are enthusiastic about the company and have definitely taken on their fair share of responsibility - all’s going well.
However, John sees that Mary is struggling to keep up with her workload as the company is expanding. She also has a busy home life and other commitments outside of the office.
One of Mary’s jobs is to manage staff time off and absence and to organise interviews as the team grows. Right now, she’s using spreadsheets to coordinate this.
And, as John’s network only stretches so far, Mary’s started using recruitment agencies to find new talent. But John resents having to pay so much money to recruiters.
However, when Mary advertises in the local paper or on online job boards, she gets hundreds of calls from unsolicited agencies, which further adds to her workload.
John sees that if they were to deploy a piece of software that could help Mary get more organised, it would speed up the process to make hiring more efficient and also make Mary happier.
John communicates this idea to Mary, and one of three things happens:
Scenario 1
Mary goes to the market and looks for some HR software, preferably bundled together with an integrated applicant tracking system (ATS) that will make her workload quicker and easier. Ideally, Mary will have an agreed budget from John, but that’s not always the case.
Mary learns about the various recruitment solutions on offer and eventually trials six different pieces of software that all cost around €1,000 a year. But, Mary spends so much time evaluating the software and delaying the implementation, that any potential savings made in year one are eroded by the time taken to do the analysis. We call this 'analysis paralysis'.
Net result: Mary wasted time and, therefore, money. And no solution was found. She’s still overly busy and very stressed.
Scenario 2
Mary sees the suggestion from John as an indication that she’s not doing her job well. She reluctantly takes on the project, approaching the market with the mindset that this new software will negatively impact her job, potentially making her role redundant or diminishing her control, responsibility, and importance.
This mindset is, however, very wrong. The adoption of new software will change the way she works—but in a good way! It'll reduce her workload, make her processes more efficient and make her look extremely good in John’s eyes, freeing her up to take on more responsibility and advance her career and importance in the company.
Still, because of Mary’s negative mindset, the project never gets off the ground. She tells John that the software she wants isn’t out there, or that what's on the market is too complicated, or not fit for purpose for John's small company, or that it's too expensive.
So the project goes on the back burner. The company and Mary continue to struggle, shovelling the day-to-day sand instead of levering rocks, never moving forward through a lack of confidence and fear of change on Mary's part.
Net Result: Mary wasted time and, therefore, money. And no solution was found. She’s still overly busy and very stressed.
Scenario 3
Mary agrees with John. She’d approached John several times and suggested such a solution, and now John sees she has a point.
Mary assesses her workload and calculates the total cost, including expenses for tasks she typically completes with external support, such as recruitment, recruiter fees, advertising, etc.
Mary's quick cost benefit analysis reveals that if she automated these processes, not only would it save the company considerable money, but it would also free her – and her colleagues – up to do more important things.
Mary selects software that can be implemented easily and quickly, guided by the features that address and solve the specific business process and cost issues she aims to resolve. In short, Mary takes a progressive approach.
Net Result: Mary used her time wisely and found a workable solution, that ticks the boxes on her general wish list to address the bulk of the problems as swiftly as possible. She's freed up to work on more proactive projects and continues to delight John with her agile approach, initiative, and diligence about the efficiency of company cost and time.
Mary in scenario 3 is the type of employee that most growing and progressive small companies need and should prize. Employees like these help SMEs to scale and become more profitable.
For your company to progress and develop in this age, the connection between software and people is vital.
Small, progressive SMEs need people across all business areas who are tech-savvy, capable of not only using software but also attuned to making themselves more efficient through the search for and adoption of such solutions.
Our advice is to look for recruits and current team members who are confident in assessing where systems can make a difference to their productivity and how that relates to the profitability of the business.