Is it Time to Purchase HR Software?

Signs that your small business needs HR automation

Written by Deanna Hunter

paperwork overloadI’ve been asked by small business owners about the right time to purchase an HR software system.  In general, HR software systems help to centralize & automate work flows and manage employee information & history.  Every small business needs to do this – whether with paper, spreadsheets and filing cabinets, or with software.

In my mind there are two big signs that indicate it might be time to invest in an HR software system.

The first sign is that you feel some pain.  You have one or more people spending large amounts of time processing HR related paper, creating and entering data into spreadsheets or reports, tracking and following up on information and activities, and just doing filing.  If you can see some big inefficiencies in people processes, it might be time to purchase HR software.

The second sign is that you are finding errors and inconsistencies.  Its my experience that there is often no one person who owns HR activities and paperwork in a small business.  Its often assigned to the bookkeeper or accountant who owns payroll and benefits.  Or its given to an office manager who handles time tracking and handing out forms and paperwork.  Or its handed off to the people who have the employees reporting to them.  Or maybe all three have part of the responsibility.  You may even have an HR person on staff who owns all or some of this work.  As you can imagine, this is disjointed and can create inaccuracies.  If you are finding information is getting lost, there are errors or inconsistencies in applying HR policies or practices, or employee information is just plain inaccurate, it might be time to purchase HR software.

Its important to know that you don’t need to get on board with a big complex software system that will cost a ton of money.  If your goal is simply to ease some of the pain and inaccuracies – saving you some time and probably some money – there are plenty of HR software companies out there that cater to smaller organizations who just need the basics at a reasonable price.

There is no magic number of employees or other milestone that marks the need for HR software.  My hunch is that if you are thinking about, its probably time!

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