Why cloud-based HR is a must for SMEs, and not just for the ‘big boys’

by | Oct 31, 2016 | Uncategorised

There was a time when computerised staff records were a fantasy for all but the largest of employers, and SMEs were expected to carry on with a haphazard system of spreadsheets, paper records and post-it notes. Thankfully that time has gone.

Today, a world of efficient, automated and easy to use HR systems are available to businesses of any size and budget. And as an HR Consultant specialising in working with SMEs, I know first-hand the benefits it can afford.

If the revolution hasn’t reached you yet, or you remain unconvinced, let me tell you more…

Why cloud-based HR is a must for SMEs, and not just for the ‘big boys’

From the first day you start employing people; whether one person, a team or a larger workforce, several things happen.

First, you’re suddenly thrown into a world of responsibility, both moral and legal, to protect both your employees and yourself as an employer.

Second, you’re facing a set of paperwork and records that not only have to be kept for a certain length of time but need to be both easily accessible and kept entirely safe and confidential.

And third, you need to keep on top of frequently changing complex legal requirements, reporting, records and paperwork. All of which carry an administrative burden in terms of time, resources and physical paper, as well as the underlying risk of penalty or problems should any detail slip through the net.

Frankly paperwork, time, admin, stress and risk. Who needs it?

Certainly not most busy business owners. Certainly not many of my clients. And probably not you.

As a director of an SME, you’ll likely have immense pressure on your time and a smallish team of managers and operational support. Fulfilling customer demands and expectations will and should be your core focus day to day.

Anything that makes life easier without incurring inhibitive costs can only be a good thing. You and your staff can focus on lead generation and sales, with admin and record-keeping staying firmly in its place; as a necessary requirement, a useful tool, but one which should tick along nicely without excessive burden on your time.

This is where an automated HR system comes in. And the good news is that unlike many ideal solutions in life, this does not need to cost a fortune, take an age to implement or introduce more complications into your business.

So, in no particular order, here are some of the reasons why moving to a good, automated HR solution in my view is invaluable.

  1. Ease of administration and greatly improved efficiency

Keeping manual records for holiday and sickness may be just about manageable for a small team, but there are significant benefits of an automated system for this, particularly if you are hoping to grow and expand.

No mistakes. No pieces of paper having to be passed around and potentially lost. Easy to make and record any changes. And easy to analyse patterns. It’s also a lot simpler for your employees – and don’t forget that any benefit to them is a step in the right direction of being perceived as a great employer. Online holiday and expenses systems enable quick, efficient, flexible and permanent recording, including options for employee ‘self-service’ or allow managers to approve holiday requests on-line. Just making life so much more straightforward for everyone, and able to be accessed from anywhere there is an internet connection.

  1. Easier to comply with legal obligations

As an employer, you have certain obligations about the records you hold and reports you need to provide on your employees – and this is often subject to change. For example, information on right to work status of employees. Holding detailed background information. Evidence of checks such as DBS if relevant. Recording of hours and holidays to ensure compliance with the WTD. Also, different records will carry different requirements as to how long you are obliged to store them.

Imagine the ease if, with a click of the mouse, the information is stored for the right length of time, there at your fingertips when you need it and able to be compiled immediately into the necessary reports and formats. You can also link records to a calendar to provide automated reminders.  Compare this to routing through a filing cabinet, and manually compiling the information you need. You’ll have peace of mind that you’ll never fall short of your obligations and face the risk of penalties.

  1. Protects you in the case of grievance or performance management

When it comes to people and performance management, record keeping is key. Any appraisal process should be supported by documentation and agreement of objectives. After all, without this, how can an employee be deemed to be performing well or conversely proven to be underperforming? Should you find yourself in a position of having to manage poor performance or going down a disciplinary route, it’s essential that conversations are noted and performance notes are thorough and maintained. Failing to do this may leave you exposed and vulnerable should you need to make difficult decisions or at worst find yourself in a tribunal.

Some automated systems have robust and clever performance management systems built in, which are trackable, measurable and accessible to your employees. This has the added bonus of improving staff engagement, as employees are put more in control of their performance objectives.

Also, a good HR system should allow you to embed key business documents, such as policies or staff handbooks, which can record whether an employee has read and agreed to them.  A great way of mitigating an employee claiming ignorance of a key company rule at a tribunal.

  1. Enables intelligence based decisions

If we agree, as I’m sure we do, that your people are ultimately the key drivers of business performance; then measuring and analysing productivity and other factors are key to improving commercial success.

The analysis that many automated HR systems can provide is worth its weight in gold. Through it you may identify a staff retention, productivity or other issue, but down to specific departments or points in the recruitment cycle which can be addressed once you have this information. A concerning percentage of staff leaving in a certain section of the business? Maybe you need to look at line management support or the working environment. Too many people leaving within their first six months? A prompt to review your recruitment and selection procedures or company induction. Productivity particularly poor suddenly in one area? Time to review the training or identify any morale issues.

Knowledge is power. The more detailed the analysis of what’s going on in your business, the greater your ability to take the steps you need to rectify any issues, identify opportunities to improve and make intelligence based decisions about company objectives.

  1. Security and disaster recovery

If the majority of your employee records are paper based and held in a filing cabinet how secure is that and who may have access to it? If you hold some computerised records on a spreadsheet on a PC, how well is it backed up and how vulnerable is the data?

With modern HR systems the information is extremely secure, with most systems having HTTPS encryption as standard.

Security of your data is one thing but what happens if there’s a fire or a theft and you lose access to your records? Will people still get paid if all your payroll information is stored on-site? Most HR systems will incorporate disaster recovery features such as being hosted on mirrored servers and keeping database backups at secure separate locations enabling the system to be restored extremely quickly.

So there you have it, a host of benefits of adopting a cost effective automated HR solution.

And don’t forget that with a good cloud-based system your HR Consultant should have access to all of this too. So they’ll be able to add huge value to the support they already offer by using the analysis and reports available on the system.

If you can’t wait to make the change, please visit our breatheHR page now to find out more about our HR system and the business-changing benefits it could bring.