HRMS Software

Here’s how spreadsheets are posing a big threat to your HR functions

Spreadsheets were widely used modes of maintaining data earlier. Companies relied on teams to update and maintain critical data on spreadsheets. However, as businesses evolved and with the advent of new technology, businesses are realizing that spreadsheets are an outdated and unreliable form of data maintenance. It is not suited for modern business requirements and creates an unnecessary nuisance.

JP Morgan Chase lost more than $6 billion in its “London Whale” incident, in part due to Excel spreadsheet errors (including alleged copying and pasting of incorrect information from multiple spreadsheets). In a sad twist of fate, the British bank  Barclays sent an offer to purchase another firm in 2008 that hid—instead of deleted—nearly 200 spreadsheet cells, resulting in unnecessary losses.


Spreadsheets have become synonymous with HR since time immemorial. People have been using spreadsheets to store legacy data of companies and HR professionals have been using it as their default tool for managing basic operations.  But modern business solutions have time and again proved that there are better tools available in the market that can help running your HR functions effectively. Maintaining employee database sheet, attendance sheet, leave timings, tax filing data, all are done and maintained on spreadsheets. 

Therefore, when it comes to payroll processing multiple sheets have to be collated to arrive at the right calculation. Now imagine doing this exercise for all the employees of the organization! Not only is this tedious but also highly time-consuming. Also, the chances of errors become manifold. This can lower employee morale and also destroy the company’s reputation. This herculean task can be easily achieved by software automation.

The major disadvantages of using spreadsheets for HR functions are:

  • Prone to human errors

Multiple people inside and outside the HR team are maintaining data on a single spreadsheet. As such mistakes even if unintentional are bound to happen whether by distraction or by clear oversight. One wrong entry will mean all the corresponding entries or outputs will have erroneous results. Also, due to this being a collaborative effort it becomes difficult to find that singular wrong entry or track the error. Add to that there is confusion and no clear indication of who is working on which data. This can lead to multiple people doing the same work. 

When a staffer accidentally inserted “20,000” into a cell instead of “10,000, the London Olympic Committee ended up selling 10,000 tickets for non-existent seats at four minor heats of synchronized swimming. When the mistake was caught, the committee had to upgrade the ticket holder to tickets for major events—at a loss.

  • Lack of audit trail

Since spreadsheets are a collaborative effort, there should be a tracker for entries but sadly there is none. Audit trail helps in tracking a document thereby catching any erroneous entry. Audit trails help in identifying when and by whom the changes were carried out thereby helping the HR managers to nab the mistake if it occurs. However, spreadsheets do not have any option of audit trail and allow entry and change of data as it is. This adds to the existing woes of HR management.

  • Vulnerable to fraud

This is a major disadvantage of using spreadsheets for updating critical company data. Fraudulent manipulations in spreadsheets can lead to a billion-dollar loss in financial revenue and prove to be a nail in the coffin. The main reason behind this spreadsheet vulnerability is the lack of in-built control which means people can easily change the formulae, data, etc without leaving any evidence.

  • Poor built-in controls

There are no built-in controls to restrict employees from using a spreadsheet making it easy for anybody to edit and manipulate data. While there is a password-protection tool, but once shared one cannot control what data to share and what to hide. Therefore, information can easily be altered without anyone knowing and data becomes less trustworthy.

  • Consolidation worries

The main challenge that one encounters with a spreadsheet is consolidating complex data and producing a single document. The fact that spreadsheets are scattered and not centrally located, one has to go through a complex consolidation process. Users have to summarize, review, and submit data to reporting managers who then compile the data arriving from various sources. This data then has to be scrutinized for errors before the final task is carried out. The entire process is very difficult to execute without a glitch and highly time-consuming.

  • Not suitable for agile businesses

In an age when major changes are sweeping the business world every day, spreadsheets are just not keeping up. The need is arising for smart tools that not only keep up with evolving business needs but also help businesses in decision making. Spreadsheets are generally created by individuals who do not possess the technical knowledge of software documentation. As a result, these files become highly personalized user applications. The problem arises when that particular employee leaves the organization and someone else is supposed to take over. In such a scenario, the newcomer may have to start from scratch thereby reducing the earlier effort completely. 

  • Not scalable

As an organization keeps growing, so does the amount of data. Eventually, it becomes increasingly difficult for HR managers to keep track of data maintained in spreadsheets making it unsuitable for growing business needs. 

In conclusion, spreadsheets are not suitable for growing business demands and are detrimental to an organization’s success. This outdated process of data updates can set a business behind by decades. With the advancement of technology, companies are increasingly embracing agile and modern software to automate their HR functions. Automation of mundane tasks is time-saving, saves you from errors, and is an efficient way of maintaining daily operations.

About Paylite HRMS

Paylite® Human Resource Management Software is an end-to-end HRMS system to meet the ever-growing needs of modern-day workplaces. It has helped companies worldwide in increasing productivity by replacing age-old legacy systems. To adopt Paylite HR management software for your business, Book a Demo here: