Small and mid-sized businesses (SMBs) typically struggle with connecting human resources (HR) work to business strategies. Only 37% of responding HR professionals from SMBs say they anticipate and participate in defining business strategy in their organizations, whereas 30% say they wait to be directed on business strategy rather than contribute to its formation, and the rest are somewhere in the middle.
The free research report, The State of the HR Function in Small to Mid-sized Businesses, is now available for download. HR.com's HR Research Institute and UKG, a global HR technology company, conducted a study of HR professionals from businesses with 1,500 or fewer employees to examine how these smaller organizations’ strategic processes and HR practices and responsibilities are managed.
HR automation remains a challenge for these smaller companies as only 40% say all HR, payroll, talent, time, and scheduling processes are automated. In fact, some organizations (15%) are still using all manual or paper-based processes. This lack of automation seems to be affecting HR’s ability to focus on strategic tasks. About two-thirds fail to focus primarily on business and people strategy, as opposed to back-office tasks.
Compared to HR departments that focus more on back-office tasks (HR strategy novices), those that help guide business and people strategy (HR strategy experts) are:
more than five times more likely to use their HR data to make actionable recommendations
almost five times more likely to use their HR and payroll processes to set the strategic direction
four times more likely to be proactive in aligning people strategy to business strategy and goals
three times more likely to make it easy to tie people data to larger business goals
almost three times more likely to use automated regulatory compliance to a high degree
“Automation and artificial intelligence provide a tremendous advantage because HR leaders and people managers can shift focus from being a process manager to problem solver, elevating strategy and execution. This is especially important during times of uncertainty and rapid change,” said Jess Griffin, Vice President of Product Management at UKG. “Small and mid-sized businesses that unburden their teams from time-consuming, repetitive manual work can instead focus on creating employee experiences that enhance business outcomes.”
“Many leading HR organizations are embracing technology to transform the profession, which is vital in today’s fast-moving business climate,” stated Debbie McGrath, Chief Instigator and CEO of HR.com. “By leveraging automation and AI, the HR role will have more time and deeper insights to better drive strategic business goals set by the company.”
“Every person deserves a great workplace culture, and small and mid-sized businesses have a tremendous opportunity to create unique experiences for their people,” said Griffin. “The results of this survey uncovered a clear need for modern solutions that empower employees with flexibility and autonomy, foster organizational resilience and agility, and help leaders build a culture of belonging.”Download the full report which includes details on seven key takeaways to help HR departments gain insights into how to successfully deliver strategic human resources management.
1 HR strategy experts: Those who answered 4 or 5 to the question “On a scale of 1 to 5, rate how much your HR team focuses on back-office tasks (such as managing employee records or processing forms) as opposed to helping guide business and people strategy (such as presenting people data or continuously improving processes).”
HR strategy novices: Those who answered 1 or 2 to the same question.
At UKG, our purpose is people. As strong believers in the power of culture and belonging as the secret to success, we champion great workplaces and build lifelong partnerships with our customers to show what’s possible when businesses invest in their people. Born from a historic merger that created one of the world’s leading HCM cloud companies, our unique Life-work Technology approach to HR, payroll, and workforce management solutions for all people helps 50,000 organizations around the globe across every industry anticipate and adapt to their employees’ needs beyond just work. To learn more, visit ukg.com.
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