Still Using Outdated Employee Management Tools? You May Be Putting Your Small Business at Risk


HR system

Post sponsored by HRdirect Smart Apps

By Jaime Lizotte

You’re a small business owner with limited resources. You’ve been comfortable using manual (paper) employee management tools for years and don’t feel the need to upgrade.

You may think you’re fine, but the truth is, these antiquated processes may be hurting your business.

Sometimes we forget that the function of human resources is to manage companies’ most important asset—its employees. Instead of viewing employee management as a back-end administrative burden, why not see it as a way to strengthen your business? Having the right online solution can help you increase efficiencies and reduce costs, while at the same time giving you immediate access to the information you need.

Pitfalls associated with outdated systems

There are many drawbacks to manual or outdated HR tools. First and foremost, they’re more prone to human error, which may lead to compliance issues. For example, if you lose track of paperwork, misfile it, or use outdated forms, you may be out of compliance with critical federal and state employment laws.

From a time-management standpoint, outdated systems also tend to pull you away from your bigger business priorities. It just takes longer to fill out physical forms and generate reports, and as a small business owner you’re too busy attending to a hundred other things to be tied down with time-consuming and tedious paperwork. You have better things to do than rifle through piles of paperwork because employees are asking about remaining PTO, swapping a shift, or updating a W-4 form.

It’s also important to note that paper-based systems can be costly. You have to spend money on printing, collating, and filing. Safe disposal or recycling is also costly, as is shipping paper-based documents.

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Finally, an additional disadvantage to a manual system is that paper records are susceptible to fire, flooding, and other disasters. Migrating employee paperwork to an online environment eliminates this risk.

Although using paper for HR is expensive, inefficient, and time-consuming, you’d be surprised how many businesses still do it.

Advantages of updating your HR tools

Now let’s focus on the positive! It’s been said that great companies are like well-oiled machines—all of the parts work together to keep things moving forward. HR is an important component of this machine, and HR inefficiencies can affect the momentum of your entire business.

To handle employee management as strategically as possible, you need to comply with federal and state laws, gauge issues such as turnover and hiring costs, and take care of payroll and benefits.

The right HR software can automate many of these management functions and free you up to focus on more pressing matters. Further still, it reduces errors and oversights, which is great news if you want to avoid serious financial and legal complications.

What to consider when choosing a vendor

As you review the available options, it’s always wise to evaluate each program using the same criteria. Ask yourself these questions for each software program you review:

  • Is the company financially stable?
  • Have they been around more than a few years?
  • Will this vendor be easy to do business with?
  • Does the software offer multiple layers of security?
  • Is the software designed specifically for small businesses?
  • Is the software the best solution, both functionally and economically?
  • Does this software solution reduce technological complexity?
  • Will this software help me manage operational, security, and compliance risks?
  • Will this software create more time in my day so I can focus on more important matters?
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And, finally, does the provider have labor law and HR compliance expertise? The answer should be yes. Employment laws are continually changing and the government expects you to stay up-to-date with the latest forms and requirements.

Technology is a fact of life for today’s business owners

Out with the old, in with the new. In order to keep up with the competition, it’s important to stay current and remain compliant in today’s fast-paced business landscape. Switching to the latest HR tools is one of the best investments you can make.

To find out if you’re ready to make the switch, take the quiz “Is It Time to Explore Online HR Software?” And be sure to check out our free e-guide on choosing the right software for your business.

About the Author

Post by Jaime Lizotte

Jaime joined the product development team at ComplyRight in 2007. Since then, she has managed and developed numerous HR solutions, from training tools and safety products to HR and tax reporting software.

Before joining ComplyRight, Jaime was a practicing HR Manager at a small marketing firm. Her hands-on experience as an HR practitioner gives her unique insight into the day-to-day challenges of small business employers as she develops next-generation products to make employee management easier.

Company: HRdirect Smart Apps
Connect with me on Facebook, Twitter, and LinkedIn.


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