SMBs: The Front Line of the HR Tech Revolution
A new wave of accessible technology, combined with the right expertise, makes HR a strategic asset for SMBs.
Large enterprises have long viewed human resources (HR) as a critical strategic asset. However, it remained little more than an administrative nuisance in the eyes of many small and midsize businesses (SMBs). That’s been changing radically in recent years, thanks to a revolution in HR technology.
A new generation of HR tech tools, many of them cloud-based and affordable, has emerged. They provide SMBs with access to resources once only available to very big companies. “These systems not only provide robust functionality, they incorporate best practices embedded in the solution,” says Lav Gandhi, senior con- sultant at T.H. Easter Consulting.
Technology is fundamentally changing the way SMBs perceive and utilize the HR function within their organizations. “Technology’s ability to help businesses manage performance has played a key role in elevating the HR function overall,” says Paul Sarvadi, co-founder, chairman and CEO of Insperity. “It’s helped increase awareness among SMB owners that having a people strategy pays off in meaningful ways.”
HR technology’s most visible impact has been its ability to make the administrative and transactional aspects of managing a workforce more efficient and effective. It’s also made it easier to share information
“Technology’s ability to help businesses manage performance has played a key role in elevating the HR function overall.”
— Paul Sarvadi, co-founder, chairman and CEO of Insperity
once siloed in the HR department with the rest of the company. But the most important development is how it enables HR to analyze the data collected and “leverage those insights to create recommendations, lead management efforts, and, ultimately, evolve their role as a strategic contributor for the organization,” says Christina Zurek, recognition and incentives solutions manager at ITA Group.
Research bears that out. Seventy-five percent of SMB HR leaders in a recent survey said technology has enabled them to become more strategic and efficient in their jobs. More than two-thirds said they have moved beyond traditional administrative functions and are now part of leadership conversations about business direction.
“That’s where we see technology really going,” Sarvadi says. “Ultimately, it has to facilitate a preferred outcome and provide actionable information, which you have to know what to do with once you receive it. The technology alone is not enough. It takes a combination of HR expertise and effective technology to achieve the preferred outcomes.”
“With so many HR technology options available to SMBs, choosing the right provider is important,” says Sally Winston, global head of employee research for Engine Group. “Think first about what you really need and how the technology will help you with a broader goal that’s designed to drive a specific outcome.”
Having a strategic, systematic HR function in place improves the success equation for SMBs on two fronts. “When your people are aligned with your strategic objectives, your performance as a company is going to be better. At the same time, you’re better equipped to manage compliance risk, and that protects the company’s profits,” Sarvadi says. “It’s a combination that provides optimal value for any business, and Insperity provides it in a plug-and-play formulation with our Workforce Optimization offering.”