How Small Businesses Can Improve Their HR Efficiency - Human Resources Hero

How Small Businesses Can Improve Their HR Efficiency

How Small Businesses Can Improve Their HR Efficiency | Human Resources Hero

Knowing how to improve HR efficiency can be highly beneficial for small businesses. Your human resources department might not only handle payroll functions but have myriad other responsibilities, too. Frequently only one or two people handle all HR tasks, leading more strategic HR initiatives to take a back seat.

Making a more efficient Human Resources department can help small businesses by boosting productivity, lowering hiring costs, and decreasing hiring time. An efficient Human Resources department may also improve employees’ morale by strengthening the employee-employer relationship. 

That’s not all. By staying on top of constantly changing laws, an efficient human resources department will also help small businesses comply with state and federal regulations. With this in mind, let’s look at how small businesses can improve HR efficiency.

Improve Human Resources by Outsourcing or Automating Time-Consuming HR Tasks

On any given day, an HR professional has to juggle many responsibilities, including processing payroll, ensuring government compliance, administering employee benefit plans, responding to employees’ queries about their paychecks, conducting performance evaluations, and more.

Such tedious administrative tasks consume about 73.2% of an HR professional’s time each day. They also prevent HR professionals from coming up with strategic initiatives that could improve your small business’s bottom line and contribute toward its overall success.

Want to fix this imbalance and enable your HR department to focus more on the critical aspects of the business? You can automate or outsource HR tasks that are time-consuming, but crucial to your business’s success.

Here are a few options to automate HR tasks:

Employee Self-Service Tool

The Employee Self-Service (ESS) tool is an online portal that enables employees to complete various HR-related tasks independently, without getting in touch with the Human Resources department or even filing paperwork. This tool is beneficial for the employees and HR professionals alike.

Depending on its type, ESS could enable the employees to elect benefits, enroll in training programs, review their monthly/yearly performance evaluations, and check reports highlighting business contributions to their 401(k).

Human resources professionals, too, could benefit from the ESS system. With administrative tasks no longer needing their attention, they could dedicate most of their time toward providing expertise and insight to company management, furthering their impact on the business.

Human Resource Information System

HR Analytics Improve Efficiency | Human Resources Hero

A Human Resource Information System (HRIS) collects and stores data about an organization’s employees and job candidates, such as names, addresses, Social Security numbers or IDs, work permit or visa information, and information about dependents.

Afterward,  an HRIS improves human resources in businesses small and big to take care of various activities, including those related to HR. To give you just one example, it lets the HR department quickly dive into a large pool of applicants whenever there is a job opening, reducing hiring time.

It also frees up the time of the HR professionals by letting employees monitor their time, payroll, and attendance; schedule vacations, time off, or leaves; and enroll in group benefits. Employees can also use HRIS to update their benefits information without engaging the HR department.

Improve Human Resources by Investing In HR Analytics

One of the critical responsibilities of the Human Resources department is providing employees with a conducive HR analytics takes this data, analyzes it, and churns out valuable insights that help HR professionals improve the human resources department to be able to make more profitable and accurate decisions. Decisions which could make the Human Resources department more efficient by helping it:

Improve talent acquisition

The best HR analytics software not only helps you draw a psychometric profile of candidates applying for a particular role in your organization. They also compare the information and skills candidates provide in their job application and throughout the hiring process with the requirements in your job listing, before preparing an unbiased list of the best potential candidates for the role.  

Increase employee retention

Employee retention is a critical objective that improves any Human Resources department. HR analytics might help them achieve this goal by offering an in-depth analysis of the factors causing employee turnover in their organization. HR professionals could then use this data to devise strategies to prevent their competitors from poaching their top talent.


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Prevent workplace misconduct

Internal investigations and workers’ behavioral data can help HR professionals anticipate and prevent workplace misconduct issues such as sexual harassment and bias. Indicators on the problems being reported, where those issues are occurring, the number of cases, and more can be analyzed to predict trends, prepare strategic plans and take preventive steps across the organization.

Measure effectiveness of training programs

By using technologies like Machine Learning and AI, HR analytics has finally connected the dots between training programs and business results. This knowledge might let the HR professionals identify the areas where the training program might be falling short. They can then address those areas to help employees get the most out of corporate training programs.

Create better benefits and compensation programs

Intelligent HR analytics can determine what affects your benefits and compensation programs are having on employee performance. They could do that by identifying employees whose performances soared with incentives while also pinpointing those for whom pay rises made no difference at all. Combining these insights with professional HR consulting can allow your business to develop a benefits program that elicits the best response from employees and positions you as the employer of choice in your area.

Let Your HR Staff Develop Additional Expertise

According to a study, one-third of employees claim they left their previous job because they were bored and needed a new challenge. This insight should surprise no one, given that the human mind craves learning. Boredom leads to slackness and, in the case of organizations, a reduction in efficiency and productivity.

That’s why you should develop and implement a robust training program for your HR staff and valuable employees in a supervisory role. Continually training and developing your key employees not only increases their value to your organization but dramatically reduces the odds of them leaving your company to work for someone who provides a more stimulating work environment. Many HR outsourcing companies offer unlimited training and mentorship opportunities for your staff, allowing them the opportunity to continue their professional development

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Improve Your Workplace Culture

Various studies have confirmed that workplace culture has a substantial impact on employees’ efficiency and productivity. Organizations that build a culture of reinforcing trust in their coworkers and build an environment of psychological safety are inadvertently giving their bottom line a shot in the arm.

In contrast, those organizations that build a no-prisoners, high-pressure, cut-throat culture end up harming the productivity of their employees. That’s because such environments lead to more workplace stress, which, in the long run, leads to disease, absenteeism, and high turnover.

That’s why you might want to build a culture that stresses the importance of trust between the employer and employees and encourages employees toward building team relationships. A study carried out by researchers at MIT found that this can end up doubling an organization’s productivity.


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Improve Human Resources by Outsourcing Your Payroll

Payroll processing is one HR task where accuracy and efficiency matter more than most. For instance, businesses must submit taxes to local, state, and federal authorities in designated forms and at specific times. Such tasks require time-consuming administrative efforts that demand accuracy.

Otherwise, they could lead to costly resolutions. Other common payroll mistakes include errors on tax forms, filing late with the IRS, misclassifying employees, paying the wrong amount, processing payroll after the last date or not at all, and not maintaining adequate payroll records.

Provided you decide to outsource your payroll, you won’t only be reducing the risk of these mistakes. Instead, you’ll also be freeing the time of your HR professionals for business priorities. This, as you might guess, will end up increasing the efficiency of your Human Resources Department.


Improving the efficiency of your Human Resources department takes work. But with the right tools and help, even a small HR department can get big results.  If you’re not sure how well your HR department is performing, or if you know your HR department could be more efficient, make sure to learn about our HR Department Scorecard. This free tool will show you where your HR department can be more efficient and give you specific tips on how to improve your HR efficiency.

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