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Writer's pictureChinju Augustine

Why do SMEs/Startups need HRMS?

Updated: Jul 21, 2020



“HRMS is often perceived to be a tool to be administered only when an organisation becomes large in size. Is it true?”


Once the size of manpower exceeds 7 in an organisation, the executive time spent on managing routine HR activities exceeds the time it deserves. The entrepreneurs or the promoters get entangled in the web of manual activities following up mundane tasks of HR such as leave management, preparing payroll, ensuring statutory compliance, and a lot of effort is put in to minimize human errors.

Are all these tasks worth attending? The answer would be YES, but can it be delegated? The answer would again be YES. All these tasks can be delegated to a suitable HRMS, which gives much-needed flexibility and visibility of HR activities to the management.


How are Startups/SMEs benefited?

Many of the functions in an HRMS tool are fit to use for a Startup or SME.


Building up a database of talent resources from the initial stage of entrepreneurship will act as a valuable repository for the organisation in its growth path. Also, the system would provide a sense of associating with a systematic and organised work environment for the team.

SMEs will benefit from using these functions. Check out why SMEs should use an HRMS

  • Training for employees: Even in small businesses, employees need to be trained well. HRMS helps in creating training modules, which encourages the employees to learn something new and improve skills that could increase productivity. HR teams are assigned to develop training programmes for the newly hired, to prepare them for their job responsibilities.

  • Incentives and Rewards: For small businesses, it’s even more critical that financial incentives can be developed and planned in order to spend wisely and avoid any employee discontent. Incentives and promotions are done based on employee performance appraisals, and this can be automated through HRMS. Employees can understand how they are performing.

  • Staffing requirements: Many businesses start small, with the intention of eventually growing. Human resource directors need to verify what type and amount of personnel are required and design a method for finding the best candidates. HRMS helps companies to get the resumes through online and filter those to relevant persons based on their skill requirements.

  • To retain the talent: It’s important for small businesses to be on the level with their competitors in the field so that their employees are not tempted to look elsewhere. HRMS helps employees in acquiring new skills and offer a functionality to track the employee training and development that increase employee performance and boost employee engagement. Employees will be motivated to stay in a company where they are comfortable, fairly compensated, and when they see the possibilities for self growth and development.

  • Transparent Communication: HRMS makes it easier for HR professionals and other employees to communicate effectively. In small businesses, it's important for an employee to perform multiple functions.

  • Compliance management: Organizations have legal obligations that they must fulfill to keep their business running and avoiding penalties. HRMS serves as a reminder for the certification and maintains records in a database.

  • Data Analytics for Decision Making: HRMS makes it easy to centrally collect data, automate business workflows, and add visibility by means of charts and graphs. This generates data and identifies patterns and trends. It also helps you figure out training requirements, manpower planning, the utility of employee, job, etc. and helps to plan KPIs for the future.

Affordability of HRMS for small firms

The emergence of HRMS Systems has bridged the gap between SMEs and big corporates in the way they manage their talent pool. SMEs can have an affordable way to access the HR technology that was once available only to bigger corporates. The number of vendors offering HRMS Systems continues to grow and they offer what is right for the organization size. Businesses of every size have been impacted by the need for better talent management.

A variety of HRMS products is available now, making it possible for a company to handle its workforce reliably and efficiently. Many companies offer SAAS (Software as a service) model HRMS products, which enables employers to pay per user, and only till the time they use it, avoiding the huge initial capital cost. The HRMS solution can be tailor-made and the firms can pick and choose from a basket of variable options. These systems are very user-friendly, allowing professionals to learn quickly and operate smoothly to stay competitive and yield the best possible output from the workforce. Since the software is hosted on the service provider’s cloud space and maintenance/updating is done by them, the firms are free from any software related issues.

We, at Consoul, would be happy to evaluate the requirement of your firm’s HR requirements, map the processes, suggest suitable HRMS solutions and handhold during implementation.


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1 Comment


jacobbinu
Jul 21, 2020

Good article for enterprise to pursue

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