HR Digitalization: The Secret Link To Growth For Small And Midsize Businesses

There are many misconceptions about running a small or midsize business (SMB) – too many to list here. But possibly the most damaging myth of all is “small means simple.” In truth, SMBs face just as much complexity as large enterprises, especially in the human resources (HR) function.

HR is unquestionably about talent recruitment, development, and retention, all of which supports a company’s ability to compete. Given the threat of industry disruption plus the constant evolution that are part of doing business in today’s digital economy, HR’s role has never been more critical.

By embracing a digital mindset, HR has an unprecedented opportunity to play a highly visible role in an SMB’s growth and competitiveness. The function can convincingly shift the digital mindset of business leaders and employees by revolutionizing the entire HR services mechanism. Adopting cloud platforms, mobile apps, analytics, and social collaboration could pave the way for transforming core processes, organizational cultures, and systems across all regions.

1. Talent recruitment

Attracting the best talent is a real challenge for SMBs because they do not normally have the brand recognition and strategies enjoyed by larger competitors in the same space. According to the Oxford Economics research, just 58% of executives and 62% of employees agreed or strongly agreed with the statement, “we have the right recruiting strategies in place to hire the skilled workers we need.”

Technology, such as candidate relationship management tools, can help HR find and engage active and passive candidates wherever they are located and when they are most receptive. More important, it can jump-start a level of innovation and creativity that is needed to procure the most qualified talent, despite restrictive budgets that leave little room for hiring mistakes or expensive employee recruitment campaigns.

2. Employee development

In addition, HR plays a fundamental role in fostering continuous engagement between leadership and employees. Oxford Economics revealed that 58% of executives agreed or strongly agreed with the statement “leadership gives ample ongoing feedback to employees,” while 63% of employees responded in the same way.

This responsibility is particularly important to SMBs because it’s not uncommon for people of all levels to wear multiple hats. The key is to promote two-way conversations that foster boundless collaboration, culture transformation, talent development, and growth. By turning away from the traditional annual review, the function can align talent development efforts with the business’ agility through employee performance management systems that allow continuous relationship building throughout the year.

3. Workforce retention

Another source of complexity is employee retention. While most firms are quick to analyze whether employee interactions violate local policies, laws, and traditions, they must also determine how the entire business will communicate across regions and remain engaged. For example, Oxford Economics found that just 35% of executives and 48% of employees stated that their organization provides “technology to facilitate such interactions within and across teams to a great or meaningful extent.”

By partnering with a software provider, SMBs can embed technology and best practices to address concerns – such as compliance and local work customs – that are critical components of supporting standard processes that promote employee retention. This approach not only streamlines processes, enhances communications, and leads to greater engagement, but it also strips away unnecessary complexity with greater insight.

The SMB digital vision is HR’s responsibility too

Whether an SMB requires more competitive recruitment practices, consistent employee development, or ubiquitous access to expertise and data for remote workers, HR leaders should assert those needs into the digital vision of the entire business. Besides, digitalization is not just the preference of your employees – it’s their expectation.


This story originally appeared in Digitalist Magazine (