HR Tech Adoption: Insights From MSME & Startup Survey
At Opportune, we continuously conduct business surveys to understand emerging business trends and new HR scenarios. In a recent survey, we spoke to MSME business owners and Startup founders.
Some interesting insights came up –
3 Top priorities of business leaders
For business owners as well as startup founders, business development is the primary focus. They put most of their time into sales and client relationships. As the setup is small, they themselves get involved in product demonstrations, estimate generation, and negotiations.
Financial management gets the second priority. Taking care of loans and installments, arranging salaries for employees, as well as meeting potential investors.
And then comes HR and admin.
As our focus is specifically on HR tech, we probed further into HR management practices in these organizations. We found contrasting approaches–
First approach: HR is not important.
Many business owners consider HR and admin issues as something eating into their core business focus. So they just ignore it. Sad, but true.
The second approach: HR management can wait
Most of these business owners come from a traditional business background. They think HR policies and processes are important, but they take HR policies and HR automation seriously only when an organization has 300-500 employees.
The third approach: HR is important for business growth.
Progressive business owners and founders go for HR structuring even when the business is very small. It’s not surprising to find an HR manager taking care of a small team of 20 employees. Modern startup founders even go for automation from the very beginning. They opt for payroll, attendance automation, and even the complete HRMS platform.
This difference in attitude towards HR policies and HR tech is remarkable. And worth digging into.
What could be the effect of these differences? How it impacts business growth?
The first group depends on Jugaad HR
They cobble HR policies and documents from samples received from friends and relatives. To them, these policies and documentations are not important from a business growth point of view. It is only a matter of regulatory compliance. Because of this attitude of ‘jugaad’ and contingency management, they lag behind competitors and struggle for survival.
The second group thinks in terms of ROI and trade-off.
These business owners wait for the organization to grow before opting for HR automation. They feel the cost of HR management and HR tech per employee will reduce with size. Also in their reasoning, compliance becomes complicated only after a certain size, with multi-location workstations and multiple levels of employment. They opt for the services of an HR consultant on an hourly basis. Automation is always on the wish list.
But when they want to scale up, especially when there is a sudden surge of product success and big orders roll in, they suffer. Because the HR management is not in place to take care of recruitment, onboarding, and policy documentation.
It is also tough to correct the initial policy mistakes later on. When they should focus on business development, the business owners get involved in clearing the people management mess.
The Third group creates a strong HR foundation
These enterprises, mostly run by professional-turned-entrepreneurs, or young startup founders with ambitious visions, look to HR not as an admin function, but as a strategic foundation for better work culture. That’s why they invest in HR management and HR tech early. It pays them well, as they can always scale without any hitch.
Also, such an approach helps them attract better talent. It’s a known fact that good talent doesn’t go to traditional MSME enterprises. But they join even smaller Startups. The reason is primarily the work culture. HR and automation make a big difference here.
Another significant observation came up when we compared enterprises using HR automation with their peers–
The enterprises that see HR as significant and invest in HR automation do much better business-wise. They score 20% to 50% better than their peers. On all counts: productivity, profitability, market growth, employee retention, and talent attraction.
It’s not surprising. As HR automation helps in many ways–
— The business owners don’t need to put their time and energy into payroll generation. Single-click payroll generation is a norm with enterprise HRMS solutions.
— Attendance management is smooth. In today’s hybrid work culture, attendance automation makes things smooth and real-time. For example: with the Opportune attendance module, the employees on the field can mark their attendance even in the offline mode.
— With good automation solutions, the best HR practices come into the organization from day one. And with SaaS costing models, even small enterprises with fewer employees can go for automation.
— These automation solutions keep employee morale high. Builds professional culture. Helps business owners in analyzing employee costs. And make scaling a smooth process.
The combined effects of these factors help business owners and founders to focus on their core business activities. And that also adds to better business performance.
In summary, it makes sense to go for HR tech as early as possible in your business journey.
Dhwani Mehta is the Director of opportuneHR.com,
India’s leading HRMS solution platform designed for MSMEs and Startups.
An alumnus of Mithibai College, Mumbai,
he is an HR automation thought leader, a mentor to entrepreneurs, and a passionate video gamer.