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How to choose HR Software?

Discover how to choose HR Software. Compare HRIS, HCM, and HRMS for your Human Resources needs and make an informed decision on the right system.

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A survey shows 94% of HR pros felt stressed recently. About 88% don't look forward to work. With so many people changing jobs lately, HR teams are super busy and 97% are feeling wiped out from all the extra work this past year.

But with the right technology, you as a HR Professional can be saved from the Great Resignation. HR Software solutions can help you out by automating your daily and recurring HR processes. Before coming to the point of “How to choose HR Software”, let’s discuss HR Software and its types,

What is HR Software?

HR Software is a set of modules, that can simplify and automate HR Processes and operations. Mainly, HR Software like WebHR uses technology to streamline HR management, significantly cuts down on paperwork, simplifies recurring  HR tasks, and helps HR professionals focus on more key tasks that really matter. However, some common names come up while searching for HR Software to choose from,

Types of HR Software

  • Human Resource Management System (HRMS)
  • Human Resource Information System (HRIS)
  • Human Capital Management (HCM)

Human Resource Management System (HRMS)

An HRMS functions as a comprehensive tool, integrating various aspects of workforce management into a single platform. It streamlines and automates processes like payroll, benefits administration, and performance tracking, providing a centralized database for all employee information.

Key features include employee self-service, payroll and benefits management, time and attendance tracking, performance management, and recruitment processes. These software features are designed to enhance HR operational efficiency.

The primary benefits of an HRMS include improved data accuracy, enhanced compliance with labor laws, time-saving through automation, and better employee engagement through self-service portals. It also aids in strategic decision-making by providing detailed analytics and reports.

Human Resource Information System (HRIS)

An HRIS is a software system designed to manage people, policies, and procedures. It serves as a repository for employee data and facilitates the management of HR processes, often offering reporting and analytics capabilities.

Essential features of an HRIS include employee data management, time and attendance, payroll, benefits administration, and sometimes talent management. These features are integral to streamlining HR administrative tasks.

Benefits of using an HRIS include enhanced data management and accuracy, efficient handling of HR tasks, improved regulatory compliance, and better workforce insights through analytics. It also facilitates easier access to employee information, helping in strategic planning and decision-making.

Human Capital Management (HCM)

HCM is a holistic approach that views employees as assets whose value can be enhanced through strategic investment and management. It encompasses all HR functions, integrating them into an overarching strategic framework that aligns with organizational goals.

HCM systems typically include advanced features like talent management, workforce planning, learning and development, succession planning, and comprehensive analytics. These are often supplemented with AI-driven insights for better decision-making.

The benefits of an HCM system lie in its ability to provide a more strategic approach to HR management. It helps in attracting and retaining top talent, improving employee engagement and productivity, and aligning HR strategies with business objectives. Additionally, HCM systems offer robust analytics for informed decision-making and future planning, thereby supporting the overall growth and competitiveness of the organization.

How to Choose the Right HR Software

Choosing the appropriate HR software is a crucial decision that significantly impacts your organization's human resource department's efficiency and effectiveness. Choose HR software that fits what your business needs and aims to do. This way, the software you choose will help make your HR tasks better and also match well with your company's main plans.

Core HR

Core HR consists of basic HR functions like employee data management, payroll, benefits administration, compliance management, and HR reporting. It forms the backbone of HR operations, centralizing essential data and processes. These functionalities ensure efficient management of basic HR tasks.

Core HR software streamlines critical administrative tasks, reduces errors, ensures compliance with regulations, and provides accessible data for strategic decision-making. This efficiency directly supports HR professionals and enhances overall company operations.

Recruitment (Applicant Tracking System)

An Applicant Tracking System (ATS) is a software tool that automates the recruitment process. It assists in managing job postings, collecting applications, screening candidates, and tracking the hiring process.

Key functionalities include job posting distribution, resume parsing, candidate tracking, communication tools, and reporting analytics. These enable efficient management of the recruitment process from start to finish.

ATS streamlines the recruitment process, improves candidate experience, reduces time-to-hire, and aids in acquiring the best talent. It also provides analytics for better decision-making in recruitment strategies.

Onboarding and Offboarding

Onboarding is when you help a new employee start working in your company, and offboarding is the organized way you say goodbye to an employee who is leaving. HR Software must contain these types of features as it automates task management, electronic document management, training and developmentment for onboarding, and exit interviews, and data retention for offboarding.

Effective onboarding and offboarding HR software ensures a smooth transition for employees, enhances engagement and maintains continuity. It also safeguards company data and provides insights into workforce dynamics.

Employee Self-Service (ESS)

An HR Software must have ESS as it allows employees to access and manage their personal HR-related information like payroll, benefits, and personal data, fostering a more direct engagement with their HR data. Key features include access to personal and payroll information, benefits management, time-off requests, and document uploading capabilities. ESS empowers employees by giving them control over their information, reduces HR administrative workload, and improves data accuracy and employee satisfaction.

Time and Attendance

Time and attendance systems track employee work hours, while PTO (Paid Time Off) management handles employee leave requests and approvals. Important features that the right HR Software should include are time tracking, leave request and approval processes, holiday calendars, and integration with payroll systems. These systems enhance workforce management efficiency, ensure accurate payroll processing, and help maintain compliance with labor laws.

Employee Engagement Software

Employee engagement software is designed to enhance employee satisfaction and engagement through feedback, recognition, and communication tools. Key functionalities include surveys, feedback tools, recognition and rewards systems, and communication platforms. This software improves employee morale, encourages a positive workplace culture, and provides valuable insights into employee satisfaction, leading to higher productivity and retention.

Learning Management System (LMS)

A Learning Management System (LMS) is a platform for delivering, tracking, and managing training and development programs within an organization. Essential features include course creation and management, tracking learner progress, assessment tools, and reporting analytics. An LMS facilitates continuous learning and skill development, aligns employee growth with organizational goals, and tracks the effectiveness of training programs.

Performance Review

A performance review is a regular evaluation of an employee's job performance and overall contribution to the organization. Key features include goal setting and tracking, feedback mechanisms, performance appraisal forms, and review cycle management. Performance review software standardizes evaluations, provides actionable feedback, and aids in identifying areas for employee development, ultimately driving organizational growth.

Integration and Customization

Integration means the HR software can easily work together with other systems in your business. Customization means changing the software to fit your company's specific needs. Key things to look for are how well it works with systems you already have if you can change how it looks and works, and if it can grow with your business. When your HR software can integrate and be customized, it makes everything run smoother, solves specific problems you have, and changes as your business changes.

Data Security

Data security involves protecting sensitive information from unauthorized access, corruption, or theft. Data Security is crucial in safeguarding employee and company data. Key features include encryption, access controls, regular security audits, and compliance with data protection regulations.

These ensure that personal and financial information remains confidential and secure. Robust data security in HR software protects against data breaches, maintains employee trust, and ensures legal compliance, thereby safeguarding both the employees' personal information and the company's reputation.

How much will HR software cost?

Most of the SaaS-based (Software as a Service) HR Software cost is based on the workforce in the organization. It might cost you from $2 to $18 per employee per month. Also make sure to add implementation, migration, or any other hidden cost that can vary from $500 all the way to $4,000.

Based on the pricing we have shared compare the HR software reputation, features, and level of support that the vendor is ready to provide you. By exploring different options, you will be able to negotiate with potential vendors.

Make sure you are not limiting yourself to the available budget. Think of parameters such as reducing manual tasks, cutting labor costs, time savings, risk reductions, and improving HR and employee productivity. Also, consider other factors such as scalability and migration to another HRIS software if things don’t work out which can help your organization in the future.

Most importantly, pay serious attention to terms and conditions. As some of the vendors might tie you with a couple of years’ contract that can result In penalties if the contract is terminated before the end date.