OVERCOMING CHALLENGES: SUCCESSFULLY DEPLOYING HRMS IN SMALL BUSINESSES

Introduction

A specialized software program called the Electronic Human Resource Management System (EHRM) is used for automating and streamlining human resource management processes. It aids businesses in effectively managing employee data, monitoring worker performance, and managing other HR-related tasks. Due to its capacity to streamline HR procedures, and eliminate mistakes, EHRM is becoming more and more popular among enterprises. (Smart Capital Mind (n.d.))

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Functions of EHRM

Depending on the business and the particular EHRM system being utilized, the fundamental roles of Electronic Human Resource Management (EHRM) can change. However, some of the primary duties frequently connected to EHRM include (Nivlouei, 2014).:

1. HR data management: EHRM systems can offer a centralized database for employee information, reducing the likelihood of data mistakes, inconsistencies, and security issues.

2. Recruitment and selection: Through the automation of processes like screening resumes and candidate communication, EHRM systems can contribute to the streamlining of the hiring and selection process.

3. Performance management: EHRM systems can offer resources for conducting performance reviews, giving feedback, and defining and monitoring employee goals.

4. Training and development: Employees may have access to online learning materials, career development opportunities, and performance reviews because of EHRM systems.

5. Compensation and benefits: Employer time and attendance reporting and benefits enrollment management are two examples of duties that EHRM systems can automate.

6. Compliance management: EHRM systems can assist firms in adhering to employment-related legal and regulatory requirements.

(NetSuite, 2020)

In this article, we will discuss some of the challenges faced by small businesses in implementing EHRM and provide examples of how organizations have addressed these challenges and also the benefits.

Challenges of implementing EHRM

When using this technology, it's crucial for businesses of all sizes to properly take into account their unique requirements and available resources. Small businesses deal with particular difficulties, have fewer resources, and have fewer people to manage the implementation process. Large firms might have the funds to invest in intricate EHRM systems, but they also deal with higher operational complexity and scale.

According to the study, as given in the table 62% of challenges (the first three items in the below table) related to implementing E-HRM in organizations are due to resistance and various reasons. This underlines the importance of taking into account resistance management concepts and experiences during EHRM implementation (Soltani & Mirzanejad, 2007, cited in Nivlouei, 2014)

Challenge Title	As a %
Users’ resistance due to unconventional user interface	25%
Managers’ resistance to fulfilling a few tasks	17%
Managers’ and Employees’ resistance due to the lack of education and documentation	20%
Cost of Investment in EHRM	11%
The lack of planning & thinking about the accordance of the new EHRM	27%

While it can be beneficial for organizations of any size, small businesses often face unique challenges during the implementation process. Some of the common challenges faced by small businesses in the implementation process of EHRM are:

1.    Limited resources -

Small businesses might not have the funds to purchase expensive EHRM software or the IT manpower to oversee the adoption process. Small businesses should investigate cost-effective EHRM options like cloud-based systems to address this issue because they can be more economical and require less IT support.

2.    Lack of IT expertise -

Small businesses might not have a dedicated IT team to manage HRMS deployment and upkeep. Small businesses can work with HRMS providers who provide assistance and instruction services to help them through the deployment process and offer ongoing support as a solution to this problem.

3.    Resistance to change -

Employees who are used to conventional HR procedures might not feel at ease using the fresh EHRM system. Small businesses can address this issue by including staff members in the implementation process and offering enough assistance and training to guarantee a seamless transition.

4.    Data security and privacy concerns -

It's possible that small businesses lack specialized IT security personnel to handle data security issues. Small businesses can overcome this obstacle by implementing secure data transfer and access controls as well as frequent security audits to find and fix flaws.

The Benefits of Implementing EHRM

Although implementing HRMS might provide unique challenges for small businesses, the rewards are substantial.

1.    Improved Data Management -

Resources for HR data management are frequently scarce in small businesses. EHRM can offer a centralized database for information about employees, reducing the likelihood of data inaccuracies, inconsistencies, and security threats.

2.    Streamlined HR Processes -

Improved efficiency is one of the main advantages of HRMS implementation for small businesses. Routine HR duties, such as managing employee data, benefits, and performance, can be automated using HRMS, which may reduce time and ease administrative hassles.

3.    Better Decision-Making -

Additionally, HRMS can offer insightful analyses of HR data that can aid in better decision-making. In order to recognize areas for improvement and provide information for strategic planning, HRMS, for instance, may give information regarding employee performance, learning, and career development.

4.    Improved Employee Engagement -

By giving employees simple access to their HR information and empowering them to have more say over their professional growth, HRMS may also contribute to better employee engagement. For instance, HRMS can give staff members access to virtual training courses, resources for career advancement, and performance reviews, all of which can support a culture of ongoing learning and growth.

Conclusion

Deploying HRMS presents special obstacles for small businesses, however, these obstacles can be overcome with careful planning and implementation. Small businesses can successfully deploy HRMS and enjoy the advantages of streamlined and effective HR operations by tackling issues including scarce resources, a lack of IT experience, employee resistance toward change, and data confidentiality and security.

 

References

L Ecuyer, F., Raymond, L., Fabi, B., & Uwizeyemungu, S. (2019). Strategic alignment of IT and human resources: Testing a mediation model of e-HRM in manufacturing SMEs. Journal of Small Business Management, 57(1), 126-142.

NetSuite. (2020). What Is a Human Resources Management System (HRMS)? [Video]. YouTube. https://www.youtube.com/watch?v=uu-j7zXGEPA [Accessed: 19 April 2023)

Nivlouei, F. B. (2014). Electronic human resource management system: The main element in capacitating globalization paradigm. International Journal of Business and Social Science, 5(2).

Shah, N., Michael, F., & Chalu, H. (2020). Conceptualizing challenges to electronic human resource management (e-HRM) adoption: A case of Small and Medium Enterprises (SMEs) in Tanzania. Asian Journal of Business and Management, 8(4).

Smart Capital Mind, n.d. What is Electronic Human Resource Management? [Online] Available at: https://www.smartcapitalmind.com/what-is-electronic-human-resource-management.htm [Accessed: 19 April 2023]