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4 Compelling Reasons SMBs Must Invest in HR Technology

Rise of SMBs and Adoption of Technology

Starting any business is tough. For SMBs, the challenges only grow in size and scale after their operations begin. According to an online resource, nearly 80% of the companies decide to pull out of the market due to lack of funding, growing operational costs, or both combined. But a competent organization structure and culture is what they lack most. Many a time, a proper hierarchy is either missing from the company or is unsystematic. SMBs prefer to stay lean in their IT investments for non-core functions, especially in HR and Staffing. The focus stays on breaking even and attracting a loyal customer base, at least for the first few years of their existence.

But, do they focus on employees and their development? That’s where HR Technology comes into play for SMBs and other even smaller setups.

SMBs can easily manage their HR activities until their physical capabilities allow. But scaling-up demands the automation of recurring tasks in every aspect of the employee lifecycle management.

A Paychex study revealed that 87% of HR professionals believe technology has strengthened their contribution to corporate success. On the other hand, Capterra found out that even though 91% of SMB leaders say HR technology is critical or beneficial to their business, only 57% are using it currently.


Now, SMBs form 99.7% of all businesses in the US and contribute significantly to the North American economy. They create 60-70% of the jobs in OECD countries. This only makes it wise to employ technology to fuel up their day to day HR operations.

Read more: TecHR Interview with Ben Reuveni, Co-Founder at Gloat

Why HR Tech Should be a Norm in Any SMB?

1. It Makes Hiring and Recruitment Easy

Nowadays, Talent Acquisition is a lot more convenient process than it used to be a few years ago. Job portals and social media have made it easier to post jobs offers and receive an immediate response. What more, various HR software/tools are available to help HR recruiters/managers with pre-employment screening, interviewing, and on-boarding of the candidates! Artificial Intelligence is playing an active role in the hiring process. Factors, like screening hundreds of profiles and eliminating gender biases, are some qualities that humans might not completely master. But an AI program would never be slow and biased!

Another important sub-set is hiring remote workers. Around 5% of the US employees work remotely, and as an SMB, you can explore hiring workers who can work from remote locations. And since the entire recruitment process may need to be handled remotely too, recruiters can leverage AI-powered candidate search and hiring platforms. AI-powered assistants can help to reduce time to hire and increase the number of applicants completing the application process. These programs can perform a variety of time-consuming tasks with utmost ease such as answering queries, scheduling interviews, arranging documents, collecting feedback, etc. The complete process of recruitment is made simple and efficient for both the parties involved.“In 2019, finding top talent will depend on a recruiter’s ability to intelligently automate their workflow.” – AI For Recruiting: A Definitive Guide For HR Professionals

2. Hassle-free Smooth Monitoring and Management of Current Employees

The labor-intensive nature of SMEs, coupled with their resource poverty, means that they offer a fruitful context to examine HRM interventions (Barrett and Mayson, 2008).

A crucial function of the HR department is to manage the current employees of the organization effectively. Sadly, a large number of SMBs do not outright understand the benefits of Investing in newer technology. Leave aside technology, the 2019 BerniePortal HR Survey revealed 56% of the small and medium organizations had only one HR professional/ executive in their HR Department.

With technology taking over workforce management, a majority of unproductive manual tasks have been automated. SMBs can save hundreds of hours in a year by automating manual tasks for Time Management, Leaves Management, Payroll Management, etc. In addition, the troubles of updating the records manually every time have diminished.

The manual management of Absenteeism data leads to employee-employer conflicts. The US Department of Labor (DOL) estimated in 2017 that almost 3% of the employer’s workforce was absent on any given day. The high price of absenteeism costs team morale and productivity. Disciplinary procedures in addition to a centralized platform to keep a record of the most precise data helps the cause. There are hundreds of software packages and applications available today to make sure the management is as well-organized as practically possible.

Also, in case of an internal vacancy opening up, employees have the option to prove themselves relevant to the profile and apply. Or, they can refer to suitable candidates for which they can be aptly rewarded. These practices make the ecosystem at work desirable for more jobseekers, ultimately adding to the brand value too.

AI’s role in managing and engaging employees’ roles deeper in SMBs than actually known to us. A McKinsey report stated that bots can act as a “third arm” for the HR department by supporting transactional activities such as time collection, payroll, and record keeping.  Inquiries that previously needed to be monitored by HR professionals could now be handled by such platforms with minimum assistance from the human workforce.


What is HR Automation?

3. Efficient, Paperless Documentation | Carbon-Less Company

What’s the point in storing heaps of documents anyway! More and more companies are going paperless in an attempt to keep a check on their carbon footprints and contribute towards a greener planet.

There are more efficient ways of conducting documentations and organizing paperwork than actually stacking papers in folders. In addition to the personal and professional data/documents of the employees, small businesses also need to work with and dig into a number of papers each and every day. Sales orders, purchase slips, pending payment invoices, tax certificates, you name them! With time, finding out one of those from the stack of folders may prove to be a real pain. Modern-day HR software allows effortless storage (Cloud-based) of official documents online. New documents can be created as per requirement; there are thousands of templates to choose from! The archives are organized conveniently so as to allow easy access as and when required, by authorized personnel only.

Read More: Do Employees Really Care about AI And Automation Impacting Their Job and Future Aspirations?

4. Innovative – Immersive Training, Learning and Development (TLD)

The dynamics of all industries keep changing day by day. If you want to stay competitive, you have to keep your workforce updated with the latest tools and techniques. HR managers need to be in-line with the latest trends. They need to look out for chances to get the professionals at their companies upgraded at the earliest to keep them relevant. In the earlier days, training and developing employees used to be a tedious and time-consuming task. But today, the process has turned rather interesting, short, and much more effectual. All thanks to technology!

It’s easier now to identify the shortcomings of individual professionals and craft tailor-made training programs as the situation demands. Employees feel comfortable and grasp more by one-on-one sessions, online videos, and lessons, video conferencing, case studies, et alia.

Michael Gretczko, Principal, National Offering Leader at Deloitte believes that virtual reality has a strong role to play in the training and development of employees.

Furthermore, retaining quality talent is another mission critical. The primary objective in small organizations fades into oblivion after hiring and training formalities get concluded. Employee engagement and retention methodologies should form the core of any HRM. And we are glad the amalgamation of technology with regular HR systems is helping SMBs of today to build a better ecosystem for worthwhile talent to thrive. Of course, the requirements vary for different companies in the sector. But HR technology is innovating day in and day out to make sure the entire organizational structure is productively monitored. HR Managers of today are more than willing to adopt software solutions to automate their workload and support their companies strategically in more areas.

Read More: AI in Training, Learning and Development: 5 HR Technology Best Practices for Every Company

The bright side, 38% of SMBs reportedly plan on investing in HR tech by 2021-22.