Do Small Businesses Need an Employee Management System?


Pasig City Government will implement an Employment Management System (EMS) in its human resources department. Mayor Vico Sotto (who should be our next president) has spearheaded this project to automate office HR transactions and ensure Pasig HR can focus on the development of their employees. . The Pasig city government has nearly ten thousand employees, and an EMS would go a long way in organizing its HRM. However, what if your business is considered a small business? Is it practical to invest in an HR system if you have less than 100 employees? What 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 business. An EMS performs functions such as payroll automation, performance management, and monitoring of employee work. As a result, having an employment management system can improve workforce management, improve workplace productivity, better monitor employees, and automate HR transactions. Additionally, having an EMS solution removes the burden of manual HR procedures and companies can focus more on critical HR functions of managing and developing their workforce. I see these benefits of having an EMS, especially for small businesses. Most small businesses have a limited number of employees who multitask. In most cases, small businesses do not have dedicated HR employees and assign many responsibilities to HR staff. They would juggle the completion of payroll processes, attendance control, hiring, training and administration of employees. Because of these multiple roles, accuracy sometimes suffers. Additionally, due to this multitasking practice, strategic HR functions such as recruiting strategies and performance management are not being accomplished appropriately. Therefore, by having an employee management system, a company can perform HR functions efficiently. In addition, the employee management system would eliminate the majority of manual HR tasks, making it a useful tool for small businesses.

Obstacle to having an EMS

The main reason small businesses are reluctant to invest in EMS software is due to financial constraints. Due to the limited budget of small businesses, investing in EMS would be their lower priority. A business would have to spend hundreds of thousands of dollars to implement an EMS in their business. The additional cost could be heavy for small businesses, especially during this pandemic. Despite all the benefits that an EMS can bring, investing in EMS software is an expensive undertaking, especially for a small business. Additionally, engagement is also an issue for small businesses when it comes to investing in EMS software. Implementing the EMS is not just a short-term solution in which a business can easily turn back. You will need to migrate your files, invest in IT infrastructure, and train employees using EMS software. Applying EMS is a long-term commitment, and companies wishing to use EMS should expect to use it for an extended period.

Is the EMS good for small businesses?

Using cost-benefit analysis, you need to measure the benefit of your decision and deduce the cost involved in that decision. In other words, you know you’ll make the right choice if the benefits outweigh the costs. For example, having an EMS has many advantages that a business can use. However, investing in an EMS would incur additional costs for a business. This huge investment is the reason why careful planning is needed before making a decision. In addition, a business must consider the readiness of the business. Therefore, a business should consider the financial and operational capabilities of a business before acquiring EMS software. So, do small businesses need an EMS? The answer is that it depends. Having an EMS for a small business depends on the preparation of the business. Yes, there are many benefits that a business can use. However, solving your company’s HR problem isn’t just about setting up an EMS and automating your transactions. A business should carefully plan its strategy before implementing these improvements. Especially for small businesses, an investment like this represents a significant capital expenditure. Therefore, the implementation of an employee management system must precede thorough planning in line with business objectives.

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

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

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