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.

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