The world has changed.

It has become more challenging, more dynamic and more aggressive.

Businesses must know how to adapt because if they don’t, they’ll end up like hundreds of others — a failure.

Spreadsheets such as Excel, only work when you have a small team

Years ago, the only way for HR departments to keep records of their employees were spreadsheets, post-it notes and other paper-based systems.

Then came 20^th century when on-site HR systems were introduced. These programs were only available to a selected few, namely: the manager and his small team of HR administrators.

While paper-based and on-site systems served their purposes very well, the 21^st century workforce calls for a new way of keeping their electronic records. And the solution? A cloud-based HR software.

Here are 7 reasons why HR software is the best HR solution in the know.

Reason #1. Better and Efficient Administration

Spreadsheets such as Excel, only work when you have a small team (about 4-10) of people working under your roof.

If you have more than a dozen of employees running your business, managing them — updating employee information and keeping tabs of their absences and leaves — is a nightmare!

Here’s an awesome article about employee time-scheduling nightmares. Relying solely on paper-based systems will soon become very cumbersome and simple questions like:

“Can I have a copy of my last 5 payslips?”or “How much holiday leaves I have left this year?” become very time consuming and expensive — which leads us to reason number two.

Reason #2. Less Expenses

Aside from increased productivity, an efficient HR software can save you a lot of money.

In the United States, a typical benchmark for the number of full-time HR staff working in a company is 1 HR personnel for every 100 employees.

Using an HR software will significantly bring this ratio down to 1 HR professional for every 150 employees.

So if your company has a workforce of 300, that’s 1 less HR professional to pay annually — that’s literally thousands of dollars-worth of savings per year!

Other obvious benefits of an HR software:

• There’s no need for you to hire an Excel expert to assist in data consolidation and recovery
• No need to maintain a central server where spreadsheets are often stored.

All of these benefits (and more!) lead to tangible money savings.

Reason #3. Transparency of Information

A company culture built on trust can do wonders. And you can’t do that by using traditional HR solutions.

For instance, if you rely on spreadsheets to keep track of employee data, you end up blocking or hiding certain information (consciously or unconsciously). Of course, you need to consider the security and sensitivity of your data.

But by keeping basic information such as absences or employee leaves readily available and accessible through a central HR software, you are allowing more people (especially your employees) to make good use of the info you hold.

To top it all, transparency builds trust and confidence among your employees — traits that growing companies badly need to be successful.

 Reason #4. Better Decisions

Consolidating Excel files at the end of every month usually takes a lot of time because many people are involved in the summarizing and editing process.

Did I mention that the entire process is prone to errors too? An HR software makes key data available right away allowing your company’s decision making body to analyze the information and make prompt, informed decisions.

For instance, you discovered that Department A has a very high turnover rate compared to Departments B, C and D.

Why? Did the leavers worked for the same manager? What’s the name of that manager?

Here’s another example. You noticed that Department B’s sales performance is topping the charts.

You might ask yourself several questions like: Who’s their manager? Who are the top performing workers? What are their characteristics? Can I use them to train the other departments?

As you can see, making this kind of analysis and decisions are almost impossible when you use Excel or paper-based systems.

However, with an HR software that’s centrally connected through the cloud, this analysis only takes a few clicks of a button!

Reason #5. Improved Communication

If I’ll ask you to make a list of key strategies that make a company successful, will you write open, fast communication? I will.

Communication is important if you want your company to rise in the competition. And it’s a huge plus if your HR system can provide that feature slash convenience for you.

Here’s a scenario:

Jane wants to update Martha, who belongs to another department, about the status of a very important project.

Jane don’t have Martha’s contact number on hand. But she knows very well that the company keeps a record of every employee’s contact details in a file cabinet, two floors below.

So Jane went down and skimmed through the several-year old files for 20 minutes until she found what she was looking for.

Wouldn’t it be better and more productive if Jane has access to Martha’s number right away?

An HR software that provides this kind of information isn’t a luxury anymore. It’s a need especially for employees and managers who are constantly on the road.

Reason #6. Less Risks

In an unfortunate event of a legal dispute, how will you support your claim that the employee was made aware of a particular policy change or has been previously disciplined due to a serious violation?

Will you spend the time going through your archive of several-years-old documents? Many HR software today allow you to keep in track of every communication and decisions agreed upon by the management and employees.

This makes your company less vulnerable to the risks and legal complications.

Reason #7.  Data Security and Recovery

Excel files can be disastrous. A small copy-paste mistake can cost your business millions of dollars in loses.

You think I’m joking? Check out this article about the cons of Excel where I highlighted some prominent companies who lost millions due to a trivial Excel mistake.

Data security is important. And a locked filing cabinet is not enough to keep fraud, tampering and disasters (fire, earthquake, floods) at bay.

Since HR software, such as CAKE HR, encrypt and store your company’s vital information (like payroll) on the Cloud, you are assured that even in most disastrous calamity, your data is safe and can be recovered in a short amount of time.

Lenmark.