Are HR Spreadsheets Restricting Business Growth?

Not evil but better to avoid

Digital spreadsheets were invented and made popular somewhere between 1961 and 1981. They were originally designed for accountants but quickly spread to other professions, too. Teachers, engineers and salespeople all found ways to use digital spreadsheets.

But it’s HR spreadsheets that I want to talk about today. Because spreadsheets are nearly 60 years old now, and while they still have some practical uses, I’m not convinced that HR is one of them.

You see, while HR spreadsheets are a fast and cheap way of getting started with HR admin if you run a small business, most organisations eventually find that spreadsheets complicate HR workflows further down the line

It can be difficult to work out exactly how HR spreadsheets infested your business so deeply. But usually, the answer is that they snuck in through the back door while you were still a start-up.

“When we were a tiny company, using a spreadsheet seemed like the perfect solution” recalls Pete Sosnowski, Head of HR and Co-Founder at Zety. “We were using a spreadsheet to manage time off and holidays for our employees. It was a bit tedious, but manageable.”

When you only employ a handful of people, dedicated HR software can seem a bit extravagant. But the problem is that as your organisation grows, so does your relationship with spreadsheets.

Again, Pete Sosnowski has insight to share.

“As our business scaled, and our headcount exceeded 50+ people, we started to face real challenges” says Pete. “To maintain the spreadsheet, we had to update it, make corrections, and field back-and-forth emails in an effort to piece together who wants time off, and when.”

Pete says that over time, spreadsheets became an extremely time-consuming problem.

“They took us at least an hour a day to look after” he remembers. “It dented our HR staff’s productivity, and caused them to neglect other important areas of the business. 

But lost time is not the only problem HR spreadsheets can cause.

“One of the main issues with using HR spreadsheets” says Pete “was that mistakes would spiral out of control. When you manually enter data into cells, there’s a massive chance you’ll make errors. And the worst part is, there’s no safety net since there’s usually only one person working with the spreadsheet.”

If you remember our infographic on this a while back, you’ll already know that issues associated with using HR spreadsheets can lead to financial loss via human error, penalties or fines via data breaches, and even missed talent via a slow recruitment process.

I really do recognise the speed and flexibility HR spreadsheets can give you early on in your business journey. And that’s why I’ve previously even published advice on using HR spreadsheets, such as how to create a basic shift rota in Excel.

But the speed spreadsheets give you early on is misleading, and they make you slower and slower, the bigger you get.

“If I could go back and change things, we would have just used dedicated HR software from the start” admits Pete. “Usually, these tools help avoid costly mistakes and let you stay on top of things like time off bookings without much effort.”

There is a common misconception that HR software is only suitable for bigger organisations. There was a time when this was true – once upon a time, the only type of business software that existed, was characterised by a gigantic, on-premise solution that you had to install, deploy and maintain via your server room.

But while these solutions still exist, the HR software market has changed considerably.

As we approach 2020, we’re living and working more in the cloud than ever before. And thousands of start-ups are now choosing to start their business using cloud-based HR software right from the start.

Why do they do it? Well, it’s because they want to start as they mean to go on – with a business that is scalable. And cloud HR software is as scalable as it gets. But it’s also affordable, fast, and even easier to set up than a network of HR spreadsheets.

This article first appeared here.