Employee Management Automation Enhances Efficiency, Reduces Costs, and Boosts Morale for SMBs Facing a Potential Recession

By Lane F. Cooper, Editorial Director, BizTechReports

With the threat of an impending recession, small and medium-sized businesses (SMBs) should take a hard look at employee management automation (EMA) to enhance efficiency, cut costs, and boost employee morale. While it looks like the balance of power may finally swing from employees to employers as the labor market loosens up, attracting and retaining the very best workers may not only help SMB leaders address challenges associated with a potential economic downturn but also establish a foundation for emerging in an even more competitive position for the next growth cycle. 

The case for employee automation management is pretty straightforward, especially for those SMBs that lack a formal human resource (HR) management function -- which is to say, the vast majority of SMBs. According to Gallup, significantly less than a third (28%) of organizations with 10-100 employees have dedicated HR people and processes in place. The main barriers revolve around the perceived cost and complexity of rolling out employee support initiatives common in most large organizations. (To be fair, once most organizations reach a certain size, they face regulatory and legal issues that force the issue.)

That said, a little forethought combined with access to affordable technology and services can go a long way toward elevating an SMB's appeal as a place for high-quality talent to work and stay for the long haul.

So…What are We Talking About?

In the spirit of making no assumptions, let's define employee management automation. EMA leverages software to streamline payroll processing, benefits administration, time tracking, recruitment, onboarding, and performance management. By reducing manual labor, minimizing errors, and boosting organizational efficiency, these tools can also lay the groundwork for compliance as organizations grow or move into more highly regulated markets.

The key applications associated with EMA fall into a handful of categories:

  • Payroll Automation: Software that ensures accurate calculations of salaries, deductions, and tax withholdings, reducing the need for manual processing and minimizing errors.

  • Benefits Administration: Automated systems that manage employee benefits, making it easier for employees to choose and manage their options while ensuring compliance with regulations.

  • Time and Attendance Tracking: Tools that track employee work hours and absences, streamlining attendance management and reducing timekeeping errors.

  • Recruitment and Onboarding: Automated recruitment systems that manage job postings, candidate screening, and onboarding processes, speeding up hiring and ensuring smooth transitions for new employees.

  • Performance Management: Automation facilitates performance reviews, goal setting, and feedback processes, helping track and improve employee performance.

  • Compliance Reporting: Automated systems that generate necessary reports to comply with labor laws, reducing the risk of non-compliance. 

  • Employee Self-Service:  Platforms that offer portals where employees can access and update their information, request time off, and manage benefits, enhancing the overall employee experience.

Point Solutions vs. Integrated Suites vs. Custom Designed Solutions

The vendor community that has formed to offer EMA is diverse, offering a range of solutions tailored to meet the varying needs of SMBs. These solutions can be broadly categorized into point solutions, integrated suites, and custom-designed solutions.

Point solutions are specialized tools that focus on specific segments of the employee management process. These tools offer deep functionality within their particular area, making them ideal for SMBs looking to address specific HR needs without overhauling their entire system.

Tools like Gusto and ADP are renowned for their robust payroll capabilities, including accurate payroll calculations, tax filings, and direct deposits​. Platforms such as Zenefits and Benefitfocus specialize in managing employee benefits, streamlining enrollment, and ensuring compliance with various regulations​. Meanwhile, solutions like Toggl Track and Clockify help businesses monitor work hours, project durations, and productivity, providing detailed reporting features.​ 

Several options are available for SMBs that need help with recruitment, onboarding -- and, just as importantly -- offboarding. (NOTE: Failure to properly and comprehensively remove from the cloud and on-prem systems has been a significant source of vulnerability for organizations of all sizes, especially for the SMB sector). Lever and Greenhouse focus on the recruitment process, offering tools for candidate sourcing, applicant tracking, and analytics​​. Once on board, SMBs can leverage performance management tools from companies like Lattice and 15Five to create systematic approaches for goal setting, performance reviews, and continuous feedback to help businesses track and improve employee performance​.

Integrated suites combine multiple HR functions into a single, cohesive system, providing a comprehensive solution for various aspects of employee management. These platforms can streamline workflows, reduce complexity, and ensure seamless data flow across different HR processes. Integrated suites offer several key benefits for SMBs, including enhanced efficiency through a unified user experience that reduces the learning curve and ensures all necessary tools are accessible through a single interface. 

They are typically designed for scalability, allowing businesses to grow and accommodate increased HR demands without requiring significant changes or additional software. Additionally, integrated suites are often more cost-effective than subscribing to separate services, as bundled pricing saves and reduces the need for extra IT support. Examples of a few providers in this space that focus on SMBs include: 

  • BambooHR: This platform offers a centralized system for managing HR tasks, from onboarding and time tracking to performance management and compliance reporting​​.

  • Gusto: While known for its payroll capabilities, Gusto also provides integrated solutions for benefits administration, time tracking, and employee onboarding​.

  • Zenefits: Zenefits integrates payroll, benefits, time tracking, and compliance management into one platform, simplifying HR processes for SMBs​​.

For SMBs with specialized needs that off-the-shelf products cannot meet, custom-designed solutions offer tailored software to address unique HR challenges, providing a personalized approach to employee management.

Customized automation solutions used to be an option that was exclusively open to the largest enterprises. That is no longer the case. There has been an impressive emergence of IT consultants, managed service providers, and other professional service providers who mix and match solutions with integration services to offer SMB leaders highly tailored solutions.

With customized solutions, small businesses can significantly influence and control the design and functionality of software and services, allowing them to adjust and enhance their HR operations as their needs evolve.

Within this category, terms and conditions are the critical variables to manage. It is important to shop around for providers that can accommodate specific requirements in a cost-effective and manageable manner. It is also essential to limit -- if not completely avoid -- up-front financial commitments. Look for minimal down payments and find ways to pay on performance based on sharing the outcomes of reduced recurring expenses and inefficiencies. Also, make sure contractual arrangements provide room to bail out if timelines get blown and you end up with a project that never ends. 

###

EDITORIAL NOTE: Leaders in small- and medium-sized organizations interested in learning how automation can be applied in specific business situations and scenarios can click here to meet with Lane Cooper, Editorial Director of BizTechReports.  

Below is a short-list of providers to consider as you explore your employee management automation options:

15Five: A performance management software that enhances employee engagement and productivity through tools like regular feedback, performance reviews, goal tracking, and recognition. https://www.15five.com

ADP: Provides comprehensive payroll and HR solutions designed to streamline payroll processing, tax filings, and compliance management. https://www.adp.com

BambooHR: Offers an all-in-one HR software solution for small and medium businesses, including tools for recruitment, onboarding, time tracking, and performance management. https://www.bamboohr.com

Benefitfocus: Specializes in benefits management, providing solutions for benefits enrollment, administration, and communication. https://www.benefitfocus.com

Clockify: A time tracking software that helps businesses monitor work hours, project durations, and productivity. https://clockify.me

Gusto: Provides a full-service platform for payroll, benefits, and HR, designed to simplify employee management for SMBs. https://gusto.com

Greenhouse: A recruitment software platform offering tools for candidate sourcing, applicant tracking, and hiring analytics. https://www.greenhouse.io

Lattice: Offers performance management software that includes goal setting, performance reviews, and continuous feedback tools. https://lattice.com

Lever: Provides a comprehensive recruitment platform with features for candidate sourcing, applicant tracking, and recruitment analytics. https://www.lever.com

Zenefits: An integrated HR platform that includes payroll, benefits, time tracking, and compliance management, tailored for SMBs. https://www.zenefits.com