If you’ve ever worked at a small company, you know that internal operations tend to be a comedic mix of too few people wearing too many hats. In fact, an entrepreneur friend of mine tells this story from his company’s earliest days: It was just him and another guy, and when someone would call and ask for the head of accounting, he’d simply say, “Sure thing, please hold,” put his hand over the speaker for fifteen seconds, and then start talking again in a slightly higher pitched voice, “This is the head of accounting!”
The reason internal operations is such a difficult thing to manage is because you aren’t just counting products on a shelf, for example. You are managing people–and people are multi-dimensional. You can’t treat them like objects.
Today, it’s getting harder and harder for businesses to balance resources between growing their business, servicing their existing customers, and keeping up with the demands of internal operations. This is being seen especially in the small to medium size market with companies ranging from 10 to 200 employees where founders and execs are still wearing multiple hats.
Yet (recent political moves point to this, like changes in the healthcare space for example), these companies are being expected more and more to adhere to much of the same regulations and compliance of much larger employers who have entire departments dedicated to managing internal operations.
A recent survey conducted on the national level by the Society of Human Resource Management (SHRM) discovered some of the biggest human capital challenges business face today.
“From a group of business executives, both C Suite and HR executives, 41% expressed facing the growing complexity of legal compliance. In addition, 35% saw challenge in creating effective infrastructures that supported an employee-centric, service-oriented HR organization,” the study said. And while 69% said they were currently executing HR practices effectively and smoothly, 37% acknowledged that change was on the horizon and today’s processes would soon become challenged like the rest.
To add commentary to the subject, I chatted a co-founder and CEO of , an innovative HR startup seeking to streamline many of these internal process challenges.
There are 3 Main factors:
1. The increased demand and complexity of compliance and administration requirements.
From the IRS to the Department of Labor, employers are being asked to keep track of more information, do it in new more complicated ways, and report more than they ever had to. This level of due diligence is difficult to keep up with, considering the rest of the tasks a business owner has on his or her plate at any given time.
2. Lack of dedicated resources.
As mentioned, this is especially hard for small to medium size companies who tend to have thin HR departments, if any at all. Just keeping on top of the fast changing requirements from taxes to healthcare is more than a full-time job that many businesses can’t afford to maintain.
3. Lack of modern HR technology to streamline it all.
85% of small to medium size companies are operating out of file cabinet, spreadsheets, and outdated paper heavy workflow. The sales team has a CRM, the finance team has an accounting software, the marketing team has Google analytics or similar… but what does the HR have? Being able to remove the transaction paper heavy workflows and managing everything through a modern HR technology solution is where everything is going.
Software solutions are empowering HR and administrative functions in companies the same way that QuickBooks empowers finance and accounting departments. It enables a company to move everything to a digital experience, manage employee data and documents like a virtual file cabinet, and streamlines all of the messy HR workflows like employee onboarding and benefits administration, to name a few.
Have a great day!