Large companies across the globe are in the process on transforming their human resources functions. While the fallout from the global financial crisis has driven businesses to reduce costs, shareholders and board members have been leaning on their HR departments to become more efficient, provide greater effectiveness and deliver strategic value. To meet this challenge, HR heads have embraced cloud-based HR systems to accelerate their HR transformation and empower their team to become a more important part of their organisation's ability to succeed.
But cloud-based HR is not simply the preserve of large organisations. It’s important to manage HR efficiently and effectively no matter whether you have 5000 employees or just five.
More often than not, small businesses are made up of skeletal teams. An employee can have multiple responsibilities and most small business owners/operators can wear many hats. For example, a finance manager often functions as the HR resource. A CEO often oversees business development and marketing activities. In even smaller companies, the owner/manager does it all, ably assisted by their office manager/payroll clerk/admin officer.
Without doubt, scenarios like these are being played out in small businesses across the country. With so many responsibilities, it’s critical everyone make the best use of their time. However, Australian employment law is complex if you’re not an HR expert. Rules and regulations abound. If you’re a small business owner or manager it’s easy for compliance issues to eat up so much of your precious time. And it’s so easy to get wrong.
If you’re not a trained HR/IR expert then the chances are that you’ll overlook something, such as unknowingly underpaying penalty rates, missing deadlines on employee superannuation payment contributions, overlooking annual leave or personal leave payments, or not following the correct procedure to hire someone or terminate an employee.
HR compliance is time consuming
Allowing HR compliance matters to eat up so much of your precious time is an anathema for small business owners and managers as it takes you way from focussing on your core business. But it’s so important to get HR right. Non-compliance can be a very costly oversight.
As a small business owner/manager you need to be on top of the Fair Work Act 2009; 122 Modern Awards based on industry or occupations; 10 minimum National Employment Standards for employees; the Independent Contractors Act 2006, being vigilant for sham contracting; as well as new Work Health and Safety harmonisation of legislation.
You need to ensure you’ve applied the correct Modern Award and paying your employees the correct rates of pay, with appropriate penalty rates, and tracking annual and personal leave. While one option is to look after all this yourself - no matter how much time it eats up – because relying on the contracted services of an employment relations specialist is expensive. However, consulting with a lawyer to handle issues such as an unfair dismissal claim or breach of employer obligations is more costly still.
So for services like HR, the cloud has empowered SMEs to leverage tried and trusted HR resources for a fraction of the price that you would typically have to pay HR specialists and lawyers.
With a powerful cloud-based HR system small businesses can access the tools to manage HR-related admin more efficiently and effectively without the need invest in expensive servers and networks or hire additional staff to maintain these systems.
Real peace of mind
By tapping into these proven HR tools, you can manage your employees more professionally with the confidence that your HR obligations are being managed in accordance to the rules and regulations. When you’ve got HR compliance right, you’re protecting your business from employee claims, non-compliance fines and penalties. For SMEs, this is real peace of mind.
Richard Breden is the managing director of Australian cloud-based HR management system enableHR .