Significantly, it has freed up many of them to be more strategic and fulfil the much-vaunted role of business partner. But what about smaller organisations, many of which don’t even have HR departments? The good news is the advent of the cloud and software-as-a-service (SaaS), which lowers cost and reduces implementation time, and the rise of business apps have made a great deal of this technology equally accessible to SMEs.
Technology can help to address a number of ‘pain points’ for SMEs, which, because of the demands of the day-to-day running of the business, are often placed on the backburner or ignored. Steven Ross, head of career development at global HR services group Penna, says many SMEs have a ‘real sense’ of the cost per head of time or money spent on any type of HR activity, and it is often seen only as a cost rather than a benefit. “The HR issues found in these smaller organisations can have even bigger consequences than they do in a bigger organisation and yet they needn’t require major spend to have a positive impact,” he says.
Like their HR contemporaries at larger companies, those at SMEs can use IT tools to dispense with the most time-consuming aspects of their day. They can also be used to gain more insight into the people side of the business and help practitioners make more informed decisions.
Here, we present a rundown of some of the tools and technology available.
Absence management
What are the issues?
Research by AXA PPP healthcare found that sick leave can cost businesses with between 100 and 250 employees about £40,500 a year. Monitoring absence manually is difficult and, despite its cost, isn’t a priority for many SMEs. Sue Lingard, marketing director at Cezanne HR, says absence management comes up most often as the driver for investing in HR software. “It is an admin issue and a business performance issue,” she explains. “If employers can’t track who’s on long- or short-term absences, they can’t resource effectively.”
Absence is a subject that small business owners find difficult to deal with and trust issues can arise if it’s tackled without accurate data. Indeed, three-fifths of SME bosses responding to AXA PPP’s survey said they don’t always believe their employee when they call in sick.
What types of tools are available?
There are online tools that can help to calculate the Bradford Factor, the measure used to identify whether an individual has an absence problem. Absence management modules are also built into many cloud-based HR and workforce management systems that help to identify patterns of absence and trigger automatic alerts when there is evidence of a particular problem area.
The technology in action
Chartered accountancy firm Ward Williams uses the absence management module within its Cezanne OnDemand software system to address potential issues among its 60 employees, but it also forms part of the HR outsourcing solution for its SME clients. The software will display a graph on screen so employers can see whether there’s a recurrent pattern, such as an individual’s absence tending to occur around weekends. “Without the use of software, absence is hard to manage,” says Kate Dockley, senior HR manager at the firm. “With this software [we] can look at the absence of a single employee or of a group and be a lot more proactive. If an employee is having regular days off, that needs to be addressed because of the impact it has on the business, but also in case there are mitigating circumstances of which [we] aren’t aware.”
Workforce planning/time and attendance
What are the issues?
As an SME grows, monitoring time and attendance (T&A) can become a major issue for the business owner. This is especially true in areas such as manufacturing and retail which rely on having most of the workforce in situ and being productive throughout the day. Many SMEs still use paper processes or basic time and attendance systems. “SMEs often don’t think they have an issue with T&A because they don’t have visibility of any problems,” says Neil Pickering, director of workforce management system provider Kronos.
What types of tools are available?
Basic T&A systems still have their place but increasingly sophisticated and cloud-based workforce management systems can bring major efficiency gains, helping to manage peaks and troughs in production or customer demand and improve scheduling. Some systems also use iris recognition and other biometric technologies that eliminate the incidence of ‘buddy punching’ - when employees clock in on behalf of late or absent colleagues.
The technology in action
SRD Engineering is a family business operating in the Formula 1 and motor sports space. It has virtually doubled its workforce to 31 in the past three years and has plans to further expand to between 40-50 employees in the next two. Although its standard working day is 7am to 4pm, many employees regularly perform up to two to three hours overtime a day and the premises are open from 4.30am, with the last workers leaving around 8pm. SRD is replacing a rudimentary time and attendance paper-based arrangement with a workforce management system from Kronos.
“We needed a system that will run itself and in time link directly to the accounts system,” says director Mark Bonham, responsible for HR and quality management. “It will also help us move to being a more modern manufacturing outlet. We have to put these systems in place to keep up with the competition and the industry. The technology our customers have is sophisticated and we need to have the same thought processes as them. We don’t want to be doing any of this manually.”
HR administration
What are the issues?
Administration and paperwork should form a relatively small part of the workload for those managing HR within an SME, but often it ends up as the bulk. Despite endless measures to reduce red tape, employing just a handful of people brings a large amount of administration with each new piece of legislation adding to the burden. Although Word documents and spreadsheets may suffice at an initial start-up level, admin obligations can soon become unmanageable.
What types of tools are available?
Downloadable templates, forms, policies and documentation can help micro-businesses, in particular, speed up their administration processes and bring uniformity and consistency to practices. At the upper end of the scale, SMEs can benefit from the automation that comes from cloud-based HR management information systems that also reduce margin for error as employee data only needs to be input once. Self-service HR capability, termed in a Forrester Research report as “an essential core application” for businesses, can be added to many of these systems. Allowing employees to access and update their own records makes it more accurate, and further reduces HR’s workload.
The technology in action
SMEs must not fall into the trap of thinking an online toolkit or suite of templates can be a cure-all for their HR requirements. Nor as Helen Pedder, head of HR for ClearSky HR, says should technology be used as a substitute for the human touch. It should instead be an enabler’ “Template documents for HR policies and procedures still need to be tailored to the organisation in question,” she says. “Any technology that is used should be designed to reduce administration time by making the process as efficient and effective as possible.”
SMEs with more ambitious technological aims may want to consider the option of making employee self-service integral to their operations as Ward Williams has done with its Cezanne OnDemand system. “Keeping employee records up to date is always a bit of a battle because people get married, change their name, bank details or next of kin,” explains Dockley. “With the portal, the employee is responsible for their own information so at the click of a button you know it’s up to date.”
Recruitment
What are the issues?
It’s expensive and can be difficult to get right. Although some flat-fee recruitment agency models have emerged during the downturn, agency fees remain cost-prohibitive for many micro-businesses and smaller SMEs. There are also many positions within larger SMEs for which it is difficult to justify agency fees.
Meanwhile, direct recruiting is fraught with challenges, not least because the number of candidates has outstripped vacancies in recent years, bringing a deluge of applications to sift through. Recruiting the right talent is the top priority for any SME, though, and technology can help to streamline processes and make sense of the vast number of recruiting channels that exist.
What types of tools are available?
There is a growing number of web-based platforms that help SMEs throughout the process from advertising a position to shortlisting and interview. Some feature algorithms that will help match candidates to roles to help with screening. Traditional talent management or recruitment management software providers also have SME offerings. Alongside this, applications are being developed to tackle individual tasks within the recruitment process, such as video-interviewing and online assessment/testing tools as well as some that focus on new recruiting channels such as social media and mobile.
The technology in action
Rachel Dulson, HR and administration manager at Apeks Marine Equipment, which employs 150 people, has been taking her first steps into web-based recruitment with the Smart Recruit Online one-stop recruiting tool for SMEs. This incorporates CV parsing and matching technology.
Smart contacted her at a time when she was facing the high cost of agency recruitment so was prepared to try a different approach. “I’ve used it about four times and have been thoroughly impressed,” she says. “The second time I was looking for a field sales rep and used the Smart Recruit LinkedIn facility,ß so paid nothing to post a job and directly hired someone found in the dive groups.” Dulson has since used it to recruit a quality manager when it returned a shortlist of 25 good candidates.
Performance management and appraisal
What are the issues?
Attitude to performance management and appraisal varies across SMEs and can be non-existent. While monitoring and reviewing staff performance can easily fall off the agenda it is equally as important for SMEs as larger companies. As Abigail Clayton, client director at talent consultancy Getfeedback, stresses, the performance of individual managers in the SME sector can have a significant impact on overall business performance. “It is therefore essential that business owners and directors have a clear vision of what good performance is and can articulate it,” she says. “It is important to understand how each role and job family contributes to overall business strategy and to develop an overarching performance management process.”
What types of tools are available?
There is no shortage of online 360-degree appraisal tools but, to derive maximum benefit, follow-up support from an expert is recommended. Performance management modules also typically form part of HR/talent management software suites with options available for smaller enterprises.
Although an employee’s performance and development should be the responsibility of the company, another consideration is tools which allow them to take greater control in this area. Penna, for instance, is re-launching its career portal in April 2014 to make it more relevant for SMEs. Among other things, the tool suggests a path of activity that employees follow to help achieve their objectives.
Technology in action
One way SMEs can punch above their weight is to use existing behavioural frameworks. According to Clayton, Getfeedback’s SME clients often make use of existing behavioural frameworks that have been developed with research from wider employee populations rather than creating bespoke tools. One of these is the Schroder Model of High Performance. “SMEs utilising this framework can use such tools off-the-shelf with no set-up fees or ongoing costs,” she says.
“Development interventions can also be drawn from [existing] resources so they can take advantage of wider investment tools, technology and supporting work rather than start from scratch.”
Caroline Young, senior people manager at frozen meal producer COOK, which employs about 450 people, uses the established Orpheus work-based personality questionnaire and Intrinsic motivation testing tools from Getfeedback. Accessed online, the tests help to identify motivators and attitudes to work.
“Recently a test revealed an individual had an innate tendency to rush things and it reflected in their work,” she says. “It also showed that they were in a really low percentile which I wouldn’t have anticipated.”
The test outcomes are used to form the basis of a ‘career-anchored’ discussion and, through additional use of behavioural event interviewing against an agreed competency framework, any areas requiring development are identified. This might result in the employee being given a stretch assignment to develop a specific skill or coaching. “Depending on their career goals and strengths and the kind of work they like to do, it might lead on to our leadership programme,” Young adds.
