Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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What’s the role of HR in a micro, small or medium enterprise? How can digitisation add value to it? Every HR department has loads of operations work. In growing businesses, people from
admin and finance might also take up HR work. Sometimes, even the owners might chip in with their skills. Big or small, many businesses expect HR to do a lot more than operations.

HR has evolved to become a strategic business partner in their respective organisations.
Many have embraced this change. But others are still lagging since they depend on legacy methods and tools. This results in a lack of transparency, inefficiency and delay. Digitisation is the smartest way to help them overcome these challenges quickly. When HR takes on a larger role, it shows in the business.

Digitisation is the process of converting physical data into a digital format that can be stored, processed and shared by computers. Modern technologies, like an HRMS, use this data to streamline and automate HR processes and deliver employee services on the cloud. Many HR tech companies offer modules for streamlining the recruitment, payroll, attendance, performance, training and exit processes. Nowadays, it is not uncommon to see a self-service portal and mobile app for the convenience of employees.

A Crisil report revealed that more than 65% of the surveyed MSEs adopted/upgraded their digital landscape and saw immediate-to-short-term benefits.

Knowing the importance of digitisation is about knowing the benefits of implementing the same.
Here’s what it can do to an HR department, especially in a growing business.

Creates More Bandwidth

Even though HR can perform strategic tasks, they are usually preoccupied with repetitive tasks in their day-to-day operations. In smaller businesses, someone else might probably double up as an HR executive. When more of their jobs get done faster, they’ll have more time for contributing to workplace innovation and business strategy. This, in turn, can drive growth and profitability for their organisation.

Drives Smarter Decisions

Smarter and faster decisions call for easy and instant access to data and insights. When HR sticks to paper/Excel-based processes, stakeholders are likely to face issues while accessing and interpreting business-critical data. It’s pretty common in businesses that can’t afford to make heavy investments. In this case, how can they leverage their employees’ potential to the fullest? If documents are digitised and processes automated, they can access the same anywhere and anytime. Well-informed decisions can’t happen without gleaning actionable insights from all the available data.

Trims Operational Costs

Manual processes result in costly errors, rework and wastage of resources. Digital documentation and automated workflows help HR teams eliminate all of this by minimising human intention. Today’s cloud-based HR platforms are very much affordable and scalable.
A business that deploys one will enjoy many benefits besides reducing operational costs.
This certainly reflects in the bottom line of the business. Isn’t a penny saved a penny earned?
Those who run smaller businesses would concur without batting an eyelid!

Delights More Employees

Employees want to focus more on their career-related goals and less on basic HR queries and
repetitive tasks. An employee self-service portal (ESS) lets them achieve this. It allows them to access their information, submit applications and generate reports anytime and from anywhere. This also helps them to stay focused on their core work. Which employee doesn’t love a workplace that allows people to work without distraction? Also, which business, big or small, hates a technology that does all the heavy lifting for them?

Ensures Legal Compliance

Compliance implies maintenance of multiple records and submission of reports to different government authorities. Also, businesses are expected to complete the formalities accurately and on time every time. Not every business might have the bandwidth or know-how to do this professionally and consistently. Moreover, non-compliance can lead to hefty fines and a bad reputation. An HRMS can automate and streamline the entire process of statutory compliance.

Secures Critical Data

Today, many devices are outside the perimeter of the businesses that own them. Therefore, the possibility of data loss and theft is also higher. Worse is the scenario where the HR and employees depend more on manual documentation and procedures. When all this information is digitised with a new-age HR platform, data will be in safe hands. Multi-layered encryption systems, automatic backups and role-based access will take care of the security part to a significant extent. Data theft in a small business can even ruin the business!

Concluding Thoughts

A business dependent on legacy HR processes should first focus on converting physical documents into digital format. Then comes automation with the aid of a powerful HRMS platform. Before that, the people in the company have to be primed for this transition. It’s easier in the case of smaller businesses since only a few people would be handling the HR function. When HR completes the digitisation process, operations will become smoother and employee productivity is likely to be higher. What else does a business in the MSME sector need for growth and profitability?

Authored by – Sayeed Anjum, Co-founder and CTO, greytHR

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members