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Do small companies need an Employee Management System?

The Pasig City government will implement an Employment Management System (EMS) in its human resource department. Mayor Vico Sotto (who should be our next president) spearheaded this project to automate clerical human resource transactions and ensure that the HR of Pasig can focus on the development of its employees. The Pasig City Government has almost ten thousand employees, and an EMS would greatly help organize its HRM. However, what if your company is considered a small company? Is it practical to invest in an HR system if you have less than 100 employees? How about if you have less than 50 employees? Before I answer these questions, let me first assess what an EMS can do.

Benefits of EMS

An Employee Management System is a software tool that helps manage the human resource functions of a company. An EMS performs functions such as automating payroll, performance management and monitoring employees’ work. As a result, having an employment management system can improve workforce management, enhance productivity in the workplace, better monitor employees and automates HR transactions. In addition, having an EMS solution eliminates the burden of manual HR procedures, and companies can focus more on HR’s critical functions, which is to manage and develop their workforce.

I see these benefits of having an EMS, especially to small companies. The majority of small companies have a limited number of employees who perform multiple jobs. In most cases, small businesses have no dedicated HR employees and assign numerous responsibilities to the HR staff. They would juggle accomplishing payroll processes, attendance monitoring, hiring, training and employee administration. Due to these multiple roles, there are times that accuracy would suffer.

Moreover, because of this practice of multi-tasking, strategic functions of HR such as recruitment strategies and performance management are not appropriately accomplished. Therefore, by having an Employee Management System, a business can perform HR functions effectively. In addition, Employee Management System would eliminate the majority of the manual HR tasks, making it a helpful tool for small businesses.

Hindrance to having an EMS

The main reason why small companies are hesitant to invest in EMS software is due to financial constraints. Due to the limited budget of small firms, investing in EMS would be their lower priority. A company would have to spend hundreds of thousands in implementing EMS in their business. The additional cost could be burdensome for small companies, particularly during this pandemic. Despite all the benefits that an EMS can bring, investing in EMS software is a costly endeavor, especially for a small company.

Moreover, commitment is also an issue for small companies when it comes to investing in EMS software. Implementing EMS is not just a short-term solution wherein a company can easily back out. You will have to migrate your files, invest in IT infrastructure and train employees using the EMS software. Applying EMS is a long-term commitment, and companies who would want to use EMS should expect to use it for an extended period.

Is EMS beneficial for small companies?

Using cost-benefit analysis, you have to measure the benefit of your decision and deduct the cost involved in that decision. In other words, you know you will make the right choice if the benefits would outweigh the cost. For example, having an EMS has many advantages that a company can utilize. However, investing in an EMS would entail an additional fee for a company. This huge investment is the reason that careful planning is needed before making a decision. In addition, a company should take into account the readiness of the firm. Hence, a company must consider the financial and operational capabilities of a firm before acquiring EMS software.

So, do small companies need an EMS? The answer is it depends. Having an EMS for a small company relies on a company’s readiness. Yes, it has many benefits that a company can utilize. However, solving the HR problem of your company is not just about implementing an EMS and automating your transactions.

A company should carefully plan its strategy before implementing these improvements. Especially for small companies, an investment such as this is a significant capital expense. Therefore, implementing an Employee Management System should precede thorough planning congruent to the goals of the company.

The author is an MBA student at the Ramon V. del Rosario College of Business, DLSU. He can be reached at [email protected]

The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty and its administrators.

Topics: Green Light , Pasig City , Employment Management System , EMS , human resource department , Mayor Vico Sotto
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