I’m just going to say it: you don’t need five different HR programs to run one business. But I see businesses all the time that probably think I’m wrong.

In my job, I regularly meet with businesses and we discuss all sorts of things, including HR. Being in the field has shown me there are some really amazing HR programs out there. You can find great software for recruiting, running payroll, managing benefits, or practically any HR task you need.

Here’s the problem though: smaller companies have a tendency to use HR programs separately. If you only need to accomplish a single task — for example payroll and timekeeping — a standalone piece of HR software can be a great solution and a money saver.

Why small businesses commonly use more than one HR program

What happens usually goes like this: a business starts growing and invests in something simple, like payroll software. The system works great and makes processing the small business’s payroll far more efficient. The company is so happy with its improved productivity that it decides to tackle another problem-area, such as recruitment, and invests in an applicant tracking system (ATS). But here’s where the problems start to arise: rather than going back to the company that supplied the payroll system to see if it has an ATS, too, the company invests in the applicant tracking system with the most bells and whistles in their price range.

How is getting the most from your money ever a problem? Keep reading.

With the payroll system and the applicant tracking system running, it’s time to address benefits management. That means another system from another vendor. And the process continues until eventually the small business has five or more programs, each handling a different task in HR. But because these systems were each a standalone investment, none of the information in one program talks to information in any other system. Whoever is tasked with HR responsibilities in the company spends a big chunk of their day jumping from program to program, inputting the same information in multiple interfaces, and manually connecting the dots.

All that efficiency that was promised with the individual programs? It’s still there but it’s now only associated with each individual task. 

When PC Magazine assessed HR software, its #1 must-have for a Human Resources Management System (HRMS) was integration — the ability for your HR solution to connect to other software you use. I couldn’t agree more. Application program interfaces (APIs), like I mentioned above, require a development team to make two systems talk to one another, and once you get the API working properly, it’s still not 100 percent. Those interfaces break, which means you’re calling in your development team, and when you update either software, the API may require additional work. You’re impacting your development resources and helping HR grind to a halt.

Really want to improve HR’s efficiency? Get rid of the individual programs

If you really want to improve the efficiency of your human resources team, stop using all of those individual programs, software packages, and one-note solutions. Look instead for an HR management system that is all inclusive — or that at least includes everything your business needs. Essential services for most businesses include the following:

  • Applicant tracking system
  • Benefits administration
  • Payroll
  • PTO tracking
  • Management capabilities

Beyond services, your HR solution should have these key features:

  • Cloud-based, so no one person nor any key data is tied to a single device or computer
  • Unique sign-ons for individual users and the ability to limit access to certain services on an individual basis  
  • Technical support so your development team can get back to its real job
  • HR support that provides you with an expert to answer questions
  • Self-serve HR portal for employees
  • Customizable dashboards allowing members of your executive team to see the impact HR is having on the organization, and vice versa
Why all small business HR apps are not created the same

You’d think these features would automatically be part of every HR program now — and by HR program, I’m talking about all-inclusive apps and services — but they’re not. However, the top HRMS options will have most or all of the features you want. Just be sure you’re balancing the offerings against your budget. You want something that can grow with you. Also be certain that you’re not replacing a broken system with a newer version that has the same or similar problems, or with an option that will be obsolete (a.k.a., another headache) in a few years.

Cloud-based HR solutions that are maintained and updated by their vendors really ought to be the industry standard at this point. As a small- or medium-sized business, these will give you the highest return on your investment of time and money. They should also include top-notch security features and mobility that work for your HR team and your workforce.

If you want even more, find a solution that builds onto the cloud-based HR seamlessly. For example, Stratus.hr, my employer, is a Professional Employer Organization (PEO), so in addition to offering cloud-based HR solutions, we also offer access to large-group health insurance rates to small-businesses and give our PEO clients a direct line to HR experts who can answer any employment-related question. The full-service approach is ideal for some businesses; other clients really just need our cloud-based HR. What we recommend and provide depends on the company’s stage in its lifecycle, how it’s growing, and what it hopes to do, even beyond HR. When you’re looking at HR programs, be sure the vendors aren’t trying to sell you more than you really need or less than you want. There are a lot of options out there — you can always keep shopping.

My main message is this: you have a lot of choices in how you run your HR, but if you’re doing it with a collection of pieced-together HR programs, you’re not doing yourself or your team any favors. Your productivity is suffering. You’re putting data at risk. You’re getting little actionable insight into your team’s impact on the business. And you’re not taking advantage of the true benefits of today’s technology.

Remember that technology is supposed to make everyone’s lives and jobs simpler. All those individual HR programs? They’re working against you.

When it comes to employee management, how many companies honestly need to do only one or two things?

Collectively, the cobbled-together HR software suite isn’t saving anyone time for the following reasons:

  1. Software maintenance. Since the business purchased each program separately, it needs to maintain and update each one separately. Every time this happens, productivity stalls. When an update is required, it may be accompanied by a learning curve, which also reduces productivity.
  2. Limits on the number of users. Standalone programs may support only one user at a time. Need to hop into the benefits program? You’ll need to wait until your co-worker logs out.
  3. Desktop access required. This is a big one for me and most businesses: standalone versions of HR software may be limited to the desktop or laptop they were installed upon. Unless you’re in front of that computer, that means no off-site access.
  4. Data isn’t shared between programs. Some HR software have APIs that can be configured to allow two programs to communicate with one another, but you’ll need someone with programming skills to configure everything and maintain the bridge.
  5. Reports don’t come naturally. When data isn’t shared, creating a report for a key team member is a very manual process. When the executive team wants details now, that either means dropping everything to manually cobble the information together from multiple programs or explaining that they’ll need to wait. Neither scenario is ideal.
  6. Security is iffy. In addition to the ever-present laptop-left-at-Starbucks potential, security may also be subpar when you’re using older software that isn’t regularly updated.

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John Farnsworth, Chief Executive Officer

Author John Farnsworth, Chief Executive Officer

John learned at an early age the value of hard work, forming his first company before his 18th birthday. He co-founded Stratus.hr (originally “Innovative Staffing”) in 1999 and has an established reputation for his expertise, work ethic, and love for traveling.

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