25 Apr Can Small Businesses Benefit from New HR Technology?
Many business leaders agree that their companies’ most valuable assets are their people. Training, engaging and retaining good workers offers a great ROI. Research shows that the top 5 percent of a company’s performers are responsible for 26% of business output. Moreover, there is a significant cost to losing and replacing good employees. The average cost per hire is $4,129, and it takes an average of 42 days to fill a position, according to the Society for Human Resource Management. For small businesses, attracting top talent can be challenging and the hiring process particularly consuming given the distraction it can create for the company’s leadership. Vacant (or poorly filled) positions in a small company can take a significant toll on productivity as well. Human resources (HR) technology may provide solutions for small firms looking to build stronger teams and solve other business problems.
New trends in HR embrace data and analytics to figure out who to hire, what roles workers are best suited for or when to introduce organizational change. “Predictive people analytics” has taken off and is being used by more companies to drive decisions not just about HR, but also about business programs and processes. This type of data analysis can help companies to address business issues such as sales productivity and customer satisfaction or to predict fraud and compliance issues.
This may sound too involved or costly for a small company, but HR technology vendors are offering products targeted at small businesses. Smaller firms may avoid expensive mistakes by using analytics that lead to the best candidate for a job, identify a misallocation of scarce resources or reveal trends that signal problems.
To determine whether to employ these new HR technologies, one expert suggests that a small business should assess: readiness to invest in something of value that does not generate revenue; expectations for growth and related hiring; and willingness to take action on the information gleaned through the technology.
And, companies can start small. The first step is to identify a problem that needs a solution. That will drive the data collection and help a company narrow the options to find the right technology to meet its needs.