Article

Online HR Management Systems: Easing The Burden For Small Business Owners

July 2007, Auto Dealer Today - WebXclusive

by Carlos Rodriguez - Also by this author

Many small business owners are finding themselves caught in a “Catch 22” situation: The more their businesses grow and prosper, the less time they spend actually running their companies. Why? As the number of employees in a business increases, employers find themselves spending on average, 20 hours each week dealing with personnel and Human Resources (HR) issues.  

Achieving success in any business requires a relentless focus on the basics: the core product or service, customers, distribution channels, competitors and the bottom line. Human resources and administrative functions such as recruiting, payroll, taxes, health benefits and workers’ compensation insurance can easily distract business owners. Many smaller businesses do not have the internal resources to manage these human resources and administrative responsibilities effectively, so the burden falls on the owner. Ultimately, this can hurt profitability and hinder a company’s growth potential. 

To help deal with these challenges, small-business owners are turning to human resource online management tools to handle their daily HR related tasks. Often times, online HR management tools are available through third-party providers’ Web sites or through companies such as professional employer organizations (PEOs), which provide human resources outsourcing services to businesses.  Many small business owners have learned how to use these tools to save time and boost productivity.

Small business owners should do their homework before deciding whether to use HR online management tools. Since data relating to human resources involves sensitive information such as social security numbers, addresses and health history, there is a concern about the prevalence of identification theft. Any sensitive data accessible online should require case-sensitive log-ins and passwords. If the tools are being managed by a third party, such as a HR outsourcing company, small business owners should research that company to ensure it is reputable.

HR process management tools may vary depending upon the program or provider, but in most cases, small business owners will be able to handle their administrative tasks online. And for those business owners looking to expand their work force or fill an already existing position, the online HR tools provide effective help with recruitment. Unemployment is at record lows, and a recent careerbuilder.com survey showed that 40 percent of hiring managers and human resource professionals plan to increase their number of full-time, permanent employees this year. With this in mind, it is important for small-business owners to develop an edge in recruiting. With most HR online management tools, employers gain access to recruiting assistance and get discounted prices for job postings on leading search engines. Available programs can also process new hires in minutes, eliminating forms and faxing. A new employee welcome kit containing information on benefits is also readily accessible, thereby helping employees get up to speed quickly.

Online HR management tools also benefit small business owners by allowing them to manage all of their employees’ benefits, while updating important files and processing direct deposits or W-4s. As changes need to be made, small-business owners are able to access this information quickly and securely.

All of businesses’ payroll operations can also be handled through online human resource management tools. Employers only need to enter data once and then the payroll application will calculate withholding, screen for errors, check arithmetic and transmit the data to the third-party provider. Bigger picture payroll billing options are also available, providing access to current and archival payroll information. In the event an employee must be terminated, the tools help expedite this process, and ensure that the proper paperwork is filed for both benefits and paycheck information.

Online HR management tools also can provide immediate access to important forms and manuals on topics such as client safety, drug-free workplace or substance abuse policies. Employees can view or even print these documents for their reference when at home or away from the office. This feature helps new employees get up to speed on the rules and laws surrounding their workplace.  When changes are made to the policies, business owners don’t need to incur the cost of printing new manuals, since current employees can easily view the changes online.

Small-business owners are not the only ones who benefit from the use of online HR management tools. Employees also reap the rewards, with 24/7 access to all job-related information. They can view their benefits and paycheck information, update personal information including federal W-4 and state withholdings and change their direct deposit information. In addition, employees can also conduct a total compensation analysis. Offering these types of services to their employees permits small-business owners to share the responsibility of managing employee benefits, while empowering their employees by giving them access to their essential benefits information.

According to Internet World Stats, North Americans surpassed a 69 percent level of computer ownership in 2006. With computers also available through work, friends, schools, libraries and other sources, Americans' online access is approaching 99 percent. As the internet continues to become a common part of everyday life, small-business owners should feel comfortable incorporating online human resources management tools into their businesses. The user-friendly programs will allow small-business owners to spend less time focusing on HR issues and more time building a successful business, while giving employees better access than ever to their benefits information.


Vol 4, Issue 6

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