Small businesses often fall into the same traps.

By believing in myths about HR and HR software, they miss out on a valuable resource, information and guidance, which could assist business growth and help them on their way to success. This article outlines some of these myths, and provides reasons as to why you should try to avoid that same mentality.

If you run a small business, you would likely benefit differently, if implementing HR software, when compared with larger businesses – they often have entirely different needs and distinct HR projects, and therefore need certain functions that will help and not hinder their processes.

Some interesting facts: a CIPD study found that businesses with 1-49 employees were the most satisfied with the benefits provided by HR software systems in 2016. Those with a headcount of 50-100 employees were the second highest in terms of reporting any positive impact on their business.


Myth 1: “HR software isn’t suitable for our business size.”

This myth comes from the idea that HR itself is somehow not suitable, or isn’t a requirement for SMEs, or is perhaps placed further down the scale of priorities for small businesses. According to a study from 2016, as little as 37 percent of SME owners have a good understanding on all matters to do with employee rights and employment regulations.

But HR is highly important for small and large businesses alike – features like reporting and data analytics might seem alien to a small business, but the effects of implementing this capability on people metrics, irrespective of company size, are invaluable. Cloud HR software is especially suited to smaller companies because some allow for customisation and adaptability, which helps to diffuse any fears that you may be paying for more services or functionality than you actually require. Many HR systems are modular, too, allowing you to pick the most cost-effective and efficient options for your business.


Myth 2: “HR software might ‘dehumanise’ the workplace.”

We’ve written a full article debunking this particular myth – you can read it here. But for a short summary, we believe that the worthy HR software systems free up the time of HR departments by taking on the administrative tasks for them. This then allows them to spend more time focusing on strategic development, employee engagement, happiness & wellbeing etc, etc – all becoming increasingly important as millennials take over the majority of the workforce (they will account for 75 percent of it by 2030) and Generation Z enters the mix, too.


Myth 3: “We don’t need to focus on compliance.”

This is probably the most dangerous myth on this list, and a surprisingly common one amongst SMEs. Often smaller businesses have difficulty finding the time and resources to ensure compliance rules are adhered to, and it all too often ends up being brushed under the carpet due to other ‘more important’ business pressures. A 2016 study revealed that only 25 percent of business owners feel up-to-speed on matters to do with employee rights and employment regulations.

The rules, sadly, remain exactly the same no matter how many employees a company has, and it’s dangerous to assume that you won’t be caught out because of your size. HR solutions can offer guidelines and standard workflow processes that ensure you are staying compliant with regulations and policies, and they reduce the risk of being taken to an employment tribunal by a huge amount.

If anything, staying compliant should be more of a priority amongst small businesses who desperately need to avoid any damage to reputation within their marketplace.


Myth 4: “It’s too expensive to implement HR software.”

Yes, some HR software solutions are a bit pricey – but there are plenty of affordable options as well. Some are even completely free (although it’s important to bear in mind that their functionality is often very limited, and you aren’t going to get the same benefits).

In fact, HRIS solutions are designed to help save you operational overhead cost instead of costing you money overall. By implementing good software that dictates that users adhere to the necessary workflow processes, there’s less manual work to undertake, so HR practitioners, people managers and employees alike will have more time to focus on business development and achieving their company, team or individual goals. Staff retention will likely increase, too, through engaging with employees and ensuring their happiness within their job role. You can therefore expect to see a positive effect on the bottom line through implementing an HR software solution.


Myth 5: “It’s too complicated and time-consuming.”

Don’t get me wrong, not all HR systems are simple and easy-to-use. Some aren’t hugely intuitive, and can be confusing to navigate around. But not all HR solutions are the same, and Cloud solutions are generally more intuitive and accessible. Some are actually too easy to use, due to the fact that they have very little capability, so it’s important to be aware of that too.

Our overall view is that extensive research into the HR software marketplace, combined with a little outside help, is the best way to go. Every business is different and has different requirements, but this doesn’t mean that HR software isn’t right for you, simply because you are a smaller business. The benefits can be massive, appreciated by everyone throughout your company, large or small.

Perhaps have a look at the HRComparison website which is a valuable resource that helps you narrow down your search based on your requirements.

Alternatively, have a look at the Youmanage HR software, which has been developed to provide a balance between being intuitive and having significant depth and breadth of functionality, as well as coming at a price that small businesses should happily afford.

Did you find this article useful? Youmanage HR offers software to help you streamline your HR processes and ensure compliance within your company. We also write articles on HR, leadership, employee engagement, health & well-being and much more. Start a free trial of Youmanageget in touch to ask questions, or check out our blog to help you to deliver HR best practice in your business.

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