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Excel spreadsheets vs HR software

Since its inception in 1985, Microsoft Excel has been the go-to program for creating and managing spreadsheets in HR. It has been used to track employee data, manage payrolls, and create staff schedules.

It was revolutionary, and is still widely used by 67% of human resource departments to manage HR administration. However, things are starting to change. With the advancement in technology, the advent of the HR software is giving MS Excel spreadsheets strong competition.

Each application has its own benefits and drawbacks with its usage in HR departments. We find that start-up organisations with just a handful of employees tend to opt for MS Excel spreadsheets as it is cheap and familiar. Whereas, big organisations with thousands of employees who struggle with manual data entry and calculations on spreadsheets find a HR software a better option.

But the question remains: what is the best option for your organisation?

Importance of choosing the right tool for your needs

Selecting the appropriate tool for HR needs is of utmost importance as it directly impacts the efficiency and accuracy of HR processes.

While still functional, traditional processes are limited in data access and prone to human error, leading to wrong decisions that could be fatal to the organisation. However, in a world with disparate teams, remote employees, and flexible work hours, there is no room for errors. Choosing the right HR tool for your business should be a top priority to stay competitive.

The limitations of spreadsheets in HR management

As organisations grow in size and complexity, so do their HR needs. With thousands of data points to manage, manual data entry and spreadsheet calculations can often be more of a hindrance than a help.

Lack of automation and efficiency

Traditional spreadsheets lack automation, resulting in prolonged manual data entry and increased chances of errors. Without automated calculations, real-time data updates, and standardised formats, these spreadsheets severely lack efficiency, complicating HR processes and decision-making.

Human error and version control issues

Human error and version control issues in HR can lead to severe consequences. Take, for instance, Eastman Kodak, a major photography and imaging company, which experienced a costly Excel spreadsheet error in 2005 that resulted in an $11 million severance pay miscalculation. Due to a simple typo in an Excel spreadsheet, where too many zeros were added to a severance accrual record, the company unfortunately suffered exponential consequences.

Difficulty in tracking and analysing data

Excel spreadsheets can only do so much when tracking and analysing data. Even if you have an in-depth knowledge of Excel and can create complex formulas, setting up and maintaining formulas, charts, and graphs takes time to make sense of the data. And once the data is entered and processed, the insights tend to be outdated, making it difficult to make informed decisions in real-time.

The benefits of HR software over spreadsheets

However, with a sophisticated HR software, these problems can be easily addressed. Not only is it designed to streamline your HR processes, but it also eliminates the risk of human error and provides real-time data insights for better decision-making.

Automated processes for scheduling, recruitment, onboarding, and performance management

When you invest in a HR software, you are investing in automated processes that save time and improve accuracy. This includes automating scheduling, recruitment, onboarding, and performance management processes, reducing the administrative burden on your HR team. You get to set your own rules, apply your own criteria, and the software will take care of the rest. This means you can spend more time on strategic tasks that add value to your organisation rather than getting bogged down with administrative tasks.

Advanced analytics and reporting capabilities

On the note of real-time reporting capabilities, due to the advanced algorithms and analytics capabilities of a HR software, you can generate comprehensive reports with the click of a button, easily tracking trends, undergoing root cause identification, and make informed decisions with up-to-date data insights.

You don’t need an advanced understanding of statistical methods, nor do you need to spend hours creating graphs and charts. Just set your parameters, hit ‘generate report,’ and voila! You have all the information you need to make strategic decisions for your organisation.

And if you want to go that one step further, you can even ask ELLA, our AI tool, to generate the report for you. All you need to do is ask the right questions, and she will do the rest.

Cost comparison between spreadsheets and HR software

While spreadsheets may seem like a cheaper option, when you consider the time and effort that goes into maintaining them, a HR software is actually a more cost-effective solution. With a HR software, you are investing in your organisation’s future by streamlining processes, reducing human error, and increasing efficiency.

Initial investment and ongoing maintenance costs

When comparing the financial requirements for Excel versus an HR system, Microsoft Excel is clearly the cheaper option. Of course it would be. Its functionality is limited, and it’s a ‘one size fits all’ solution.

However, when you consider the time and effort that goes into maintaining spreadsheets versus an HR system, the cost comparison changes drastically. With Excel, there is ongoing maintenance required in terms of data entry and updates. And if errors occur or formulas need to be changed, more time and resources need to be invested. Whereas, with a HR software, updates are automatic and data entry is streamlined, saving time and reducing the risk of errors.

Potential cost savings in terms of time and efficiency

But it isn’t just the streamlined processes, time efficiency, and data gathering and reporting automation that will save you money. By investing in secure HR software, you are also saving the company from costly potential cyber-attacks and HR data breaches.

Remember, in March 2023, WH Smith fell victim to a cyber attack that targeted confidential employee data? The hackers gained access to sensitive employee information, including names, addresses, national insurance numbers, and dates of birth. You do not want to risk this with your company’s HR data.

With a HR software that has strict data security policies and regular updates to ensure the latest security measures are in place, you can safeguard your organisation’s sensitive data and avoid a costly breach.

So, without sounding like a broken record, the MS Excel spreadsheet might seem like the cheaper option at a glance. But when you take into account the potential cost savings in both time and efficiency, as well as the risk of human error and data breaches, investing in a HR software is ultimately more cost-effective for your organisation.

Conclusion

In conclusion, while Microsoft Excel may have been the go-to for HR processes in the past, it is no longer a sustainable or efficient solution. As technology continues to advance and businesses become more complex, investing in a HR software is crucial for streamlining processes, increasing efficiency, and reducing costs.

At elementsuite, we have developed an HRMS solution with secure data storage, advanced analytics and reporting capabilities, as well as cost-effective options for businesses of all sizes. We understand the importance of staying ahead of the curve and providing our clients with a comprehensive solution for all their HR needs.

So don’t let outdated methods hold your organisation back – make the switch to a HR software today and see the difference it can make for your business. Contact us today to learn more about how we can help your organisation thrive.

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