What is HR software?

HR Software wraps an array of human resources systems, like recruitment and workforce administration, into one package. When you log onto its centralized platform, you get a clear overview of all the personnel-related elements of your business. Inclusive and intuitive, HR software replaces spreadsheets, memos, photocopied forms and other long-winded manual human resources tools. Data stays secure and easy to find — unlike handwritten lists and post-it notes stuck to pieces of paper, which often get lost in piles and in-trays.

Businesses feel the benefits of HR software more and more the bigger they get. If you’re just beginning to employ people, a simple time tracking application might be all you need. If you need to hire hundreds of people, you’ll probably find the powerful data-management capacity of a more comprehensive HR software very useful.

What are the benefits of HR software?

The first major benefit of HR software is the trouble it saves its users. Payroll automation programs, for example, make accounting much easier because they identify and fix common errors before you run into problems on payday. HR software also saves time: Data lives in one main location, so you can generate reports and analyze trends in seconds.

Another huge HR software advantage emerges when it comes to regulatory compliance. Compliance management tools help businesses stay up to date with state and federal legislation changes, including wage and hour, anti-discrimination, immigration, FMLA and safety laws. Companies that consistently meet or exceed ethics and compliance benchmarks usually experience lower staff turnover—and lower staff turnover means less money spent on recruitment.

Other helpful HR software features include:

• An employee directory: One central place for all personal and employment-related employee data
• Recruitment and onboarding tools: Source candidates, create resume shortlists and orient new employees
• Performance evaluation tools: Keep tabs on employee performance and identify opportunities for coaching
• Absence management tools: Track sick leave, vacation and unauthorized absences
• Training and development tools: Assign development modules, monitor employee progress and plan training schemes

The best HR software for your business will not only reduce the need for paper, but it’ll also help you make better decisions, reduce your HR budget and improve your employee experience. In short, everybody wins.

What are the different types of HR software?

Many different kinds of HR software exist. Some plug into ecommerce platforms, while others stand alone. Still others are modular, so you can build a bespoke HR program to suit your company. Let’s explore some of the most common types here:

HRIS/HRMS

Human Resources Information Systems (HRIS) and Human Resources Management Systems both act as the central nexus for a suite of helpful HR tools. HRIS and HRMSsoftwares are generally multi-person “approval” systems, so sensitive processes can’t move forward unless appropriate permissions are granted.

Recruitment CRM

Recruitment candidate relationship management(CRM) software can help you find great applicants for open positions within your company. The CRM acronym is no coincidence—it’s a play on the customer relations management software commonly found in customer service departments. Using recruitment CRM technology, HR professionals treat candidates like customers, building relationships with them as the hiring process unfolds.

ATS software

ATS (applicant tracking system) software tackles the whole recruitment process, from the moment you receive a resume through onboarding. Tasks like shortlisting, applicant evaluation, interview scheduling and background checks are all included in an ATS. Certain ATS programs are free and open source, while others are paid cloud-based software as a service (SaaS) programs.

Employee scheduling software

Employee scheduling softwareis a neat alternative to manual scheduling, which takes time and effort. You can use the program to automate schedules and analyze scheduling trends. Employee scheduling software also tracks vacation time, sick leave and other forms of absence, and it’ll alert you if there are conflicts.

Payroll software

Businesses use payroll softwareto streamline payroll processes and make sure that employees receive accurate pay. Using payroll software, you can calculate tax withholdings and make direct deposits into staff members’ bank accounts automatically.

Expense management software

Expense management softwaremakes expense tracking much easier. Employees use the software to submit and track outgoings related to work-related hotel, meal, mileage and other expenses. HR managers use the same programs to process and provide reimbursement for submitted expenses.

LMS training software

Extremely popular in the corporate world, learning management systems (LMSs) deal with a range of repetitive administrative tasks related to educational programs and training courses. In layman’s terms, LMS programsuse employee data to identify learning gaps and suggest appropriate training courses.

Benefits administrative software

Benefits administrative softwarecan help you track and manage employee benefits like paid time off, health insurance and 401(k) retirement plans. You can use the software to identify appropriate benefits and to make sure you comply with benefits-related government regulations.

Workforce management software

Companies use workforce management softwareto increase productivity and efficiency in the workplace. Workforce management programs leverage performance-based criteria to match the right people with the right jobs, making it easier for supervisors to monitor projects.

Performance appraisal software

Performance appraisals can be tough. HR managers in the know use performance appraisal softwareto identify their employees’ strengths and weaknesses in advance of reviews. You can also use performance appraisal software to identify candidates for promotion, set objectives and write individual development plans for your employees.

Compensation management

Compensation management softwarecan help you sidestep controversy by providing compensation adjustment recommendations based on logic. You can use this type of HR software to adjust an employee’s regular salary; you can also use compensation management software to calculate bonuses, dividends, equity compensation and merit pay.

Employee recognition software

Managers who want to raise morale in the workplace use employee recognition softwareto ensure that high-performing team players get the rewards they deserve. In the hands of a thoughtful executive team, employee recognition software can enhance a company’s culture and reduce turnover.

Employee engagement software

Like employee recognition software, employee engagement softwareis designed to improve team morale. Program features like gamification technology suggest fun office-based competitions, while employee feedback tools like surveys help employees and managers communicate in a positive, constructive way.

How to buy HR software

If you’re the main decision maker in your company or the head of an HR team with an independent budget, you might decide to go it alone when buying HR software. Still, it can be helpful to have input from other people—department heads, executives, regular employees and other human resources staff, for example—before making a final HR software choice.

Here’s a brief step-by-step guide to help you find the right HR program:

1. Think about your organization’s unique challenges and write them down in detail.
2. Which HR software features might be able to help you solve some of those issues?
3. Come up with a shortlist of potential software contenders and cloud-based SaaS HR platforms.
4. Try to calculate the potential ROI your new HR software might create. Consider the following points:

• How much money would your company save if staff turnover were reduced?
• Would you be able to streamline processes and reduce the number of human hours spent on repetitive projects?
• How quickly do you estimate that you’d recover money spent on an HR platform?

1. Present your HR software proposal, and any related calculations, to internal colleagues (CEO, CIO and other key figures).
2. With colleague blessing, select two or three of your favorite HR programs or platforms. Contact sales reps to set up software demos and create trial accounts with cloud-based providers.
3. Demo each software for several weeks and involve end users in tests so that you get as much useful feedback as possible from the people who’ll be using your final HR program.
4. Collate all feedback at least once a week and hold a corresponding brainstorming session with your team.
5. When you’ve made a decision, contact your enterprise software rep (if applicable) and negotiate an affordable contract with them. If you’ve chosen a cloud based HR platform, select an appropriate monthly or annual service tier.
6. Sign on the dotted line to begin using your new HR software.

Tip: HR software providers that don’t list prices online are usually open to negotiation. Don’t be afraid to bargain with your rep and ask them for a complete breakdown of services and related costs before you commit.

When to replace HR software

Quick, slick software with one centralized database can help streamline everyday HR tasks. Eventually, though, your software will begin to lose its edge. Here are five signs that it’s time to adopt new HR technology:

1. You want to get new office computers, but your HR software is so old that it only works on legacy equipment.
2. Your HR software is incredibly slow, so you end up performing routine tasks manually.
3. Your software provider stops updating or offering support for your HR software.
4. You can’t integrate your HR software with another essential program via API.
5. Your obsolete HR software no longer fulfils your organization’s needs.

Say goodbye to paper trails and hello to a speedy and reliable human resources system with tools designed to streamline repetitive tasks. People management is complicated; in a nutshell, the right HR software makes it easier.