Does a small business need HR software?
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“Do I need HR software for my small business?” The simple fact you’re asking that question indicates what the answer might be, but let’s break it down. Here’s a story we commonly encounter…

HR creep

Business start-ups rarely consider HR until they need to. And why would they? Their focus is on customers. It’s on growth. But growth often requires extra hands, and they come with responsibilities. You want to be a good employer, so you take these responsibilities seriously. This is where HR admin creeps in.

It’s manageable at first – spreadsheets are wonderful tools. And you employ a range of clever methods. You keep lists, make notes, send yourself emails, and lots of it probably even lives in your head. It works, more or less. And in the meantime, business is booming. You’re growing. In fact, if you hired more people, you could do even more. Your team expands. HR admin quietly creeps across more of your schedule.

Unexpected tasks crop up at the most inconvenient moments. Sick days. Holiday requests. Compliance deadlines. Your method still works, but your handy little spreadsheet starts sprouting like a Japanese knotweed, complexity multiplying as you diligently track rotas, holiday and sickness absence, payroll, pensions and… what was the other thing? Oh, it’s in that list you wrote down last week. You start searching for it… it’s 3am.

Time sinks

We work with thousands of small businesses across a range of services, from software to expert HR consultancy, and the fundamental problem they all have is lack of time. There’s never enough of it. This, ironically, is why they hire people in the first place. But unfortunately, everybody underestimates the time required to fulfil the unavoidable administrative elements of HR, and each one takes its own little bite out of the clock.

Top time sinks:

Absence: Sick days happen. They’re unavoidable. But on top of the immediate complications they create, you’ll need a complex spreadsheet to accurately record them, because it’s information you’ll want handy when you’re running payroll and working out holiday entitlement. Plus, you’ll want to review absence data when you’re considering performance reviews and pay decisions. And it’s not just sickness. There are a bucket load of rules around absence, covering maternity, paternity, bereavement, adoption and more…

Holiday: People are entitled to their holiday, up to 28 days (dependent on a range of factors). They work hard, they should enjoy it. But as an employer, you have to consider and respond to every single request. And it’s a good idea to track all this so you can ensure business productivity is protected during busy times. Furthermore, it’s up to you to keep track of how much holiday people have accrued during your leave year, because if they resign, they’ll still want that holiday pay.

Payroll: In 2020, a study by QuickBooks found that small businesses were spending up to 21 days a year managing and processing payroll alone. If you’ve tried running manual payroll yourself, you won’t be surprised that some businesses spend up to a third of all their HR admin time running payroll and – annoyingly – correcting payroll errors.

Compliance: HR newbies are always shocked at the sheer weight of compliance admin involved in being an employer – liability insurance, applicant checks, pension auto-enrolment, health and safety, employment contracts, right-to-work checks. None of these are avoidable, and businesses caught in breach can incur eye watering fines.

Does a small business need HR software?

So this is where we come in. “Do I need HR software for my small business?” Theoretically, no. Everything in that (by no means exhaustive) list can be managed manually. But should it be?

Well, the risks of getting it wrong are huge. Best case scenario, your employees are disgruntled because you messed up their holiday booking or made a mistake with payroll (again). Worst case, non-compliance fines, tribunals, reputational damage… eeesh!

Today, HR software options are available specifically for small businesses, on affordable subscription plans that shouldn’t (we won’t) tie you in to a longterm contract.

Tools like citrusHR are designed to make HR easy by eliminating admin. Our software is intuitive and easy to use, because there are better ways for you to spend your time. There are customers to serve, leads to chase, problems to solve, and a business to grow.

So what can HR software do for my small business?

Get time back: Most admin headaches are eliminated because all the crucial calculations are automated. When someone takes time off, for instance, the absence is logged and all the appropriate bits of data are updated immediately.

Holiday requests are no longer the bane of your life because employees can log in, see their own entitlement and request leave. All you have to do is go in, check the request doesn’t clash with any others (also right there in the system), then approve or deny. Time is the number one benefit of tools like Citrus HR, and the reason over 5000 small businesses use our software.

Cut out the mistakes: HR mistakes can be annoying, costly, disastrous, or sometimes all three. And if you’re managing these processes manually, they’re also virtually unavoidable. You’re not a superhuman, you’re going to make mistakes. Implementing a specifically designed tool that allows you to carry out complex processes with just a few clicks dramatically reduces the risk of this happening in ways that will cause serious problems.

Get a grip on compliance: Employment legislation changes every year and keeping up to date can be a massive headache. But regulators make no dispensation for busy entrepreneurs who don’t have the time to stay abreast of their latest amendments. HR software can help you stay compliant by ensuring best practice, flagging approaching deadlines, and keeping your people’s sensitive information safely stored in accordance with GDPR regulations.

Be a better employer: Being an employer is a big responsibility and slapdash HR processes do nothing to nurture the trust and respect that a healthy workplace culture needs. Creating a fun working environment or offering free fruit will never outweigh the negative impact of repeated payroll errors. You put time and effort into hiring the right people, HR software makes it easier to hang on to them.

Fancy a chat? Our friendly team love talking about how our HR software can save you heaps of time and energy by removing the hassle of HR admin. Get in touch today by emailing or call 0333 014 3888 to find out how we can support you.

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