When businesses consider implementing an HCM solution, also known as a human resources information system (HRIS), the first thing they usually look at is how many employees they have. Although the number of employees is often used as the measurement to determine whether the organization is large enough for an HCM solution, that shouldn’t be the only consideration. Other factors should go into your evaluation to determine whether you will see a positive return on that investment (ROI), including considering the nature and complexity of your business, payroll operations, and regulatory obligations.
Why Would a Smaller Organization Want an HCM Solution?
Many small-to-midsize businesses, in the range of 100 to 200 employees, decide that an HCM solution is an asset to their organization, which seems easy to understand. However, it’s not uncommon for organizations with employee counts from 50 to 75 to implement an HRIS. Why?
An automated HCM solution helps to automate their HR processes, streamline their workflow activities and provide accurate reporting on their workforce. This can make the entire business more efficient, more productive, and more profitable!
For smaller customers, implementing an HRIS may initially seem daunting from a financial perspective. The employee count and the number of users are among the common standards that vendors use to determine customer pricing. A smaller customer’s cost will typically be higher on a per-employee basis for the software itself because the costs for implementation and hardware are distributed over a smaller group of employees. It may take longer to see the return on investment than it would in a larger organization where these costs are spread over a larger employee base.
However, the most important question to ask should be, “Is your organization complex enough for an HCM Solution?” If the answer is “yes,” it may be beneficial to your smaller business in the long term to implement an HRIS system despite the initial costs.
Look at Your Organization’s Complexities
How do you know whether your organization is complex enough to warrant an HRIS system? Ask yourself these questions:
- Are your HR activities and processes paper-based and time consuming?
- Is your HR data spread out among many spreadsheets or isolated databases?
- Are your employee benefits and compensation programs complex?
- Do your business rules within these programs require a lot of manipulation and calculation?
- Do you have frequent requests for internal and compliance-related reports?
- Does your workforce have location-specific requirements?
- Is your workforce unionized and subject to a collective bargaining agreement or other contractual regulations?
- Are you in a heavily-regulated industry with extensive and ever-changing compliance requirements?
- Does your company have high turnover?
- Is the expansion of your organization and additional hiring on your near-term horizon?
If you can answer “Yes” to any of these questions, it’s time for you to analyze your HR business needs more closely. Whether you’re a 50, 75, or 150-employee company, your complex company may be ready for an automated solution. Implementing an HRIS can deliver time and cost savings over the long term and provide greater accuracy of information, helping you stay compliant and avoid potential fines and penalties. It requires less use of paper and allows more effective and efficient use of your overall human resources. Plus, if your company is growing, implementing an automated solution while it’s still fairly small can be easier to coordinate and allow you to expand more efficiently and easily.
StarGarden can help you figure out if your small-to-medium sized business is ready for an automated, integrated HR & payroll solution. Contact us today to find out how you can try a free demo of StarGarden HCM 5.0 and learn how our software can help streamline and supercharge your business, whatever size you are.