State of Small Business HR: SMBs Embracing HR Technology Better Positioned to Navigate Great Resignation

While Smaller Businesses Continue to Lag Behind Larger Businesses in Economic Recovery from COVID-19, UKG and HR.com Research Identifies Potential Barrier Slowing Strategic Decisions

UKG, a leading provider of HR, payroll, and workforce management solutions for all people, today announced the results of a new study with HR.com and the HR Research Institute that may help explain why smaller businesses are recovering from the economic impact of the COVID-19 pandemic more slowly than larger businesses.

More than two years after the start of the pandemic, larger businesses are once again thriving, with workforce activity levels measured by UKG as much as 23% above pre-pandemic levels. However, smaller businesses, especially those with fewer than 500 employees, have yet to consistently achieve even the same levels of workforce activity they were experiencing in February 2020, before the pandemic began.

Now, new insights from “The State of the HR Function in Small and Mid-sized Businesses” indicate that, despite the exponential digital transformation undertaken by many organizations to navigate COVID-19, 45% of small and mid-sized businesses are still limited to only partial automation across critical HR, payroll, talent, and timekeeping processes. Another 15% of organizations report that manual and paper-based processes remain the backbone of process and recordkeeping.

“Automation and artificial intelligence (AI) provide a tremendous advantage because HR leaders and people managers can shift focus from being a process manager to problem solver, elevating strategy and execution. This is especially important during times of uncertainty and rapid change,” said Jess Griffin, vice president of product management at UKG. “Small and mid-sized businesses that unburden their teams from time-consuming, repetitive manual work can instead focus on creating employee experiences that enhance business outcomes.”

HR professionals at small and mid-sized business who reported influencing business strategy were nearly twice as likely to have all HR processes automated. They also reported being:

• five times more likely to use their HR data to make actionable recommendations;
• four times more likely to be proactive in aligning people strategy to business strategy and goals;
• three times more likely to be able to easily tie people data to larger business goals; and
• almost three times more likely to use automation to simplify regulatory compliance.

Overall, just over one-third (37%) say they anticipate and participate in defining business strategy for their organizations, while 30% admit they wait to be directed on business strategy. The remaining one-third (33%) fall in a challenging middle ground, where they often wish to contribute but lack access to the right technology and information to have a meaningful impact.

“Many leading HR organizations are embracing technology to transform the profession, which is vital in today’s fast-moving business climate,” said Debbie McGrath, chief instigator and CEO of HR.com. “By leveraging automation and AI, the HR role will have more time and deeper insights to better drive strategic business goals set by the company.”

“Every person deserves a great workplace culture, and small and mid-sized businesses have a tremendous opportunity to create unique experiences for their people,” said Griffin. “The results of this survey uncovered a clear need for modern solutions that empower employees with flexibility and autonomy, foster organizational resilience and agility, and help leaders build a culture of belonging.”

Supporting Resources

• Learn more about UKG and why our purpose is people.
• Download the full report: “The State of the HR Function in Small and Mid-sized Businesses”
• Follow UKG on Facebook, Instagram, LinkedIn, Twitter, and YouTube.

About UKG

At UKG, our purpose is people. As strong believers in the power of culture and belonging as the secret to success, we champion great workplaces and build lifelong partnerships with our customers to show what’s possible when businesses invest in their people. Born from a historic merger that created one of the world’s leading HCM cloud companies, our unique Life-work Technology approach to HR, payroll, and workforce management solutions for all people helps 50,000 organizations around the globe across every industry anticipate and adapt to their employees’ needs beyond just work. To learn more, visit ukg.com.

About HR.com and the HR Research Institute

HR.com’s HR Research Institute helps HR departments keep their finger on the pulse of HR! HR.com is committed to creating inspired and informed workforces by maximizing the potential of HR professionals around the world. Almost two million HR professionals rely on HR.com as the foremost, trusted industry resource for education, career development, and compliance (that many people can’t be wrong!). Offerings include the largest network of HR executives, leading-edge industry research from the HR Research Institute, 13 HR-themed epublications, innovative HR education including 250+ annual webcasts, the most comprehensive HR certification exam preparation program supporting SHRM and HRCI certification, as well as helpful HR tools and legal compliance updates. HR.com has the largest knowledge base of HR practices globally and offers unparalleled training and networking for HR professionals all over the world... 24/7… 365 (just in case you can’t get enough HR). Visit hr.com/hrresearchinstitute to download research (always free) and to maximize HR potential.

Methodology: The “Balancing HR Strategy in Small and Mid-Sized Businesses” survey ran from May to July 2021. We gathered 246 complete and partial responses from HR professionals in companies with 1,500 or fewer employees. Respondents came from virtually every industry vertical. The survey was a collaboration between HR.com’s HR Research Institute and UKG.

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