Tracking employee hours, managing benefits, handling legislative changes in worker compensation and health care – these are all complex tasks to manage, but for SMEs, the resources to do so are limited.
With the advent of the cloud, much of the HR process can be automated, lifting a time-costing burden off of the small business owner. But according to Neil Jesani, the founder and CEO of cloud-based HR solutions platform PineappleHR, there remains the burden of financial cost on SMBs.
PYMNTS spoke with Jesani about the need for small businesses to implement affordable HR tools, and how market trends and regulatory requirements have now made it more important than ever for small business owners to get a strong grip on processes like employee onboarding, time tracking, and benefits management.
“The HR function is very vital to any organization,” Jesani said. “But unfortunately, in the SMB world, it is not viewed exactly the same.”
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The area of HR can play a strategic, cash flow-positive role for a business, the executive explained – but it’s often ignored or misunderstood.
“Many times, HR folks are overworked and do not have any buying power,” Jesani said. “CEOs and presidents don’t understand the complexity of the HR function.” This means, he continued, that small business owners and executives view HR as a “cost-center,” not a revenue generating one.
“That is why it is important to offer very affordable HR tools, to empower the HR department at an SMB,” he said.
PineappleHR’s solution to this issue has been to release Cogent, a new version of its platform focusing on affordability. As a tool developed for small businesses with between 50 and 5,000 employees, Cogent aims to bring the strategic functions of employee time tracking, benefit management, worker onboarding and other services at a more affordable price in an effort to help SMEs realize HR’s potential to positively impact a business’ cash flow.
Helping SMEs build HR muscle also allows these businesses to ride the waves of market trends that can be key to business growth, Jesani added.
He pointed to the Affordable Care Act as recent legislation he said “created a huge, new market for HR software” as SMEs are now tasked with appropriating health insurance coverage to their employees.
There are a slew of meticulous details within legislation like the ACA that affects SMEs, and many aspects of these rules are changing or evolving. With the Affordable Care Act having brought this trend to light for many small business owners, Jesani said the roles of automation and cloud technology have also changed the game for SME-focused HR services.
HR software will “be all in the cloud,” a shift Jesani pinpointed as one of the key changes happening in this industry. Looking ahead, he said, the HR software market will see a major influx of competition. Big names like Zenefits, he stated, have brought attention to SMEs of the need for cloud-based HR solutions; meanwhile, Jesani predicted an incoming “price war” between newcomers and legacy service providers.
And, Jesani added, looking ahead, SMEs are likely to begin eyeing HR more strategically. For instance, small business owners may want to recognize the value in separating HR from the payroll functions.
“It is a much better strategy for SMEs to have a payroll provider separate from their HR software vendor,” he said.
With today’s regulatory climate forcing SME owners to take a look at the HR function more closely, with technology bringing the cloud and automation into HR, and with a wave of competition entering the market, small businesses may soon eye HR strategically – and will be able to afford to do so, too.