Why SMBs must look to the cloud to unlock their workforce's potential

Small and medium-sized businesses (SMBs) comprise the 'engine room' of the UK's business economy. Recent figures from the Department of Business Skills and Innovation underline their importance and reveal that SMBs make up 99 per cent of all businesses, accounting for 59 per cent of all private sector employment and 49 per cent of all private sector turnover. In other words, there's nothing 'small' about their role in contributing to the UK's economic recovery.

It's also encouraging to see that the number of UK SMBs has grown hugely in the past decade, rising from 3.5 million in 2000 to 4.5 million in 2011, according to figures from the Federation of Small Businesses.

But despite renewed optimism and growth, SMB organisations have endured tough times through the recession and must continue to maintain a tight rein on operational costs and overheads. Budgets for key areas such as HR and IT remain closely guarded and every penny spent must be justified and accounted for.

Against this backdrop, it's perhaps not surprising then that, increasingly, the allure of cloud computing has captured the imagination of SMB owners and managers. They understand that the scalability, ease of use, ease of deployment and pay-per-use model promised by SaaS solutions ticks all the boxes for an SMB focused on controlling costs.

But as well as controlling costs and reducing budget, is it possible for cloud solutions to also drive workforce efficiency, improve productivity and enable better employee engagement?

It is my opinion that the combination of workforce management solutions and the cloud can make all of the above a reality.

The evolution of cloud and workforce management

Controlling labour costs, minimising compliance risk, and improving workforce productivity are all universal business management pain points. Unfortunately, whilst SMBs face the same workforce management challenges as larger companies, they have fewer resources at their disposal to try and solve them. Traditionally, workforce management solutions which address areas such as time and attendance, scheduling and absence management have been too expensive and complex for SMBs to implement - they have been the preserve of large enterprises.

However, the tide is now turning. The proliferation of cloud solutions and deployment amongst innovative SMB organisations means that business owners and managers are now seeking out SaaS-based options for HR and workforce management. According to a study from the Aberdeen Group, organisations with less than 1,000 employees are 45 per cent more likely than larger organisations to indicate that their preferred delivery model for core HR and workforce management solutions is a SaaS or cloud-based model.

The development and adoption of cloud services over the past few years means that small and mid-sized organisations are now able to rent workforce management solutions and enterprise-grade infrastructure just as easily as their larger competitors.

Typically, these technology options do not require as much time or resource investment to implement, and can help reduce the burden on IT to support the software, while also helping businesses remain more flexible as they grow or their needs change.

Workforce management delivered as-a-service can be installed in an organisation and be delivering value and business benefit in a matter of a few days. Because it is delivered as-a-service, there is no need for any capital investment, the running costs are affordable because they operate with a pay per usage model, and there is no need for the business to have specific in-house expertise.

It also simplifies the experience for employees, because they can access their schedules, jobs and holiday records from one place - online. In fact, organisations with automated time and attendance solutions achieved 12 per cent greater workforce capacity utilisation than those with manual time and attendance processes, according to the Aberdeen Group's research.

For the SMB leader looking to foster a culture of openness and collaboration to drive the business forward, it can remove many of the headaches of day-to-day staff administration and deliver the reporting and analytics needed to support decision-making.

Where next?

Cloud-based workforce management solutions bring SMBs an entirely new way of overseeing their workforce, with enterprise-level capabilities in an easy-to-use, easy-to-afford, cloud-based environment.

This functionality and scalability means SMBs can gain a competitive advantage, effectively managing their workforce and unlocking its potential. Solutions - one example of which is Workforce Ready from Kronos - should be seriously considered for forward thinking organisations looking to thrive in the increasingly

Neil Pickering is UK marketing manager for workforce management software and services specialist Kronos.