When should SMEs invest in HRMS?

If you’re a small to medium-sized enterprise, you may well be using spreadsheets to keep track of your employees. After all, software and technology is expensive, right? And you have more pressing business priorities to invest in.

Not necessarily…


One thing small businesses have over larger corporations is that they are flexible. But then, they need to be. And the right HRMS can increase that flexibility further. If you’re the boss, there’s a good chance you need to be in the office at least one day each month to run the payroll, and if not you, then somebody. An HRMS payroll module with the right downloadable mobile app means you can run the monthly payroll from anywhere with an internet connection. If you have to be on the road often, an HRMS gives you access to all your people data anytime, anywhere.

Keeping HR costs down

Very few small businesses can afford to hire a dedicated HR professional but they are subject to the same compliance regulations as any other organization in terms of employee details and recordkeeping. A good HRMS will keep track of your mandatory compliance responsibilities for you, prompting you to update records and file returns and reports, as necessary. In other words, investing in the technology means your business can grow more before you hit the point of having to invest in HR staff.

Find an HRMS to match your project budget with our comprehensive HRMS pricing guide

Another potential saving is that some systems targeting the small business market offer readymade, fully compliant people policies and procedures – to handle matters such as hiring and firing, employee grievances, and performance management – which saves you the trouble of devising your own. Yes, such standardized best practice policies are available – for example, from the Society for Human Resource Management in the US, or the Chartered Institute for Personnel and Development in the UK – but an HRMS will also help you implement and manage those policies.

Dealing with a varied workforce

Small businesses are more likely to meet some of their needs by using contractors, or hiring part-time employees, or outsourcing projects or functions to other countries or territories. This varied workforce can be complicated to manage when it comes to recordkeeping, payroll, expenses, and IRS returns. It’s a lot easier to input everything into an HRMS and let the system keep the details straight and prompt you to act when you need to.

In a nutshell, if you’re when to invest in HRMS for your small business, the answer is now! There’s never been a wider range of options on the market and cloud systems are easy to implement and offer easy ‘pay-as-you-go’ terms; some even offer a freemium version so you can dip your toe in the water with no financial outlay at all. What are you waiting for?

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Dave Foxall

About the author…

Dave has worked as HR Manager for the Ministry of Justice for a number of years, he now writes on a broad range of topics including jazz music, and, of course, the HRMS software market.

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Dave Foxall

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