Keeping up with employee requirements, benefits and compliance may be a walk in the park if you have staff you can count on the fingers of one hand. What if, one day, management doubles down on the number of employees to meet the organization’s growth spurt?
Not the least, the big bosses ask of you to prepare training and leadership programs to kickstart the company’s internal promotion gear. On top of these challenges, you are expected to lay down an efficient hiring process that guarantees only the best talents. You know Excel won’t cut it.
You might be asking: what exactly does an HR software do? How can it help you manage your human resources? Will it make a good investment for your company?
Poor employee retention rates, productivity loss, and difficulty in talent recruitment and retention are all dead giveaways that you are using an outdated and ineffective approach to managing your human resources. If you are ticking all these boxes, then maybe it’s high time for you to consider using an apt HR software.
In this post, you’ll find out the answers to all those questions and more. We’ll discuss what HR software is, its key features, and how you can benefit from using one. Our goal is to give you a better understanding of how this software works and to guide you in choosing the ideal HR software for your company.
What Is HR Software?
HR software is a digitized solution that streamlines human resource management. It helps HR departments handle all aspects of the employee life cycle from hiring, onboarding, and culture-building to payroll and benefits and compensation management. It covers the basic HR record-keeping tasks and assists HR teams in managing employee training and development.
Watch out for modern HR solutions that include other business capabilities to give a unified application experience. If your business needs are expansive, this is a useful proposition, especially if getting multiple applications from different vendors to work together could be an issue.
List of Best HR Software
Our team of SaaS experts ranked the following list of the leading HR solutions based on their user scores, key features, and unique propositions. If you want to investigate their features firsthand, you can always reach out to the vendor and sign up for a free trial.
- Gusto. Gusto is an HR tool built to simplify payroll, benefits, and HR processes for modern businesses. It offers automated calculation of payroll and taxes, ensuring that you stay compliant with internal and legal regulations. The vendor offers several pricing plans, starting from $6/person ($39/month base price) to $12/person ($149/month base price).
- BambooHR. Built for small- to medium-sized businesses, BambooHR is an HR software that offers the essential tools to assist you throughout the entire employee lifecycle. It has a wide array of features that cover hiring, onboarding, compensation, and culture building. For the pricing details, you need to contact the vendor and request a quote.
- Zenefits. Zenefits is a complete HR platform that streamlines onboarding, benefits, PTO, payroll, and HR processes. It also has powerful compliance features that keep you on top of all your internal and legal requirements. The product is priced from $10 to $27 monthly.
- Freshteam. Freshteam combines an applicant tracking system, onboarding and offboarding tools, and an employee information system in one HR platform. It has a variety of hiring tools as well, including resume optimization, candidate engagement, and job listing templates. In addition, it has a time-off management feature, making it easier for you to create custom policies and monitor employee availability. The product is available by quote.
- Bitrix24. Bitrix24 is a social enterprise platform that offers HR management, collaboration, and communication tools at no cost. It provides users with a single platform where they can consolidate all their files, projects, tasks, contacts, and messages. The vendor offers a free version of the software, but you can avail of special subscription plans ranging from $19/month to $159/month.
- Kronos Workforce Management. This application helps you get out of trouble dealing with compliance issues while covering all the modern requirements of managing a diverse workforce, from attendance and absence management to data collection and analytics for productivity and performance insights. Kronos pricing details are available when you contact the vendor for a quote.
- SmartRecruiters. This cloud-based HR software is fully loaded with all the features you need to draw in job candidates, pick the best applicant, and get them to sign onboard. It comes with smart modules you’d expect to handle the complexities of modern recruitment. For pricing, you need to contact the vendor for a quote.
- Namely. This is a powerful HR solution best suited for mid-sized companies. Aside from full talent hiring and time management, it is also packed with payroll and benefits administration capabilities, among other things. Pricing is by quote for this software.
- Zoho People. From the software stable of Zoho, this HR tool is specially designed for businesses of any size and scale. As with all Zoho solutions, this one is also easy to use, allowing users to work with the complete HR app right out of the box. There are pricing plans for SMBs up to enterprises. A free trial is available for the pricing plans, with the startup-friendly Essential HR starting at just $1 per employee per month.
- Atomic Hire. This well-regarded HR application will help you to structure your entire hiring workflow, create an attractive career page to impress candidates, and provide performance insights to the whole process. Pricing is by quote.
- EddyHR. This cloud-based HRM application will help recruiters through the entire process of hiring, onboarding, and employee management. The user interface is easy to get along, to help HR managers run the application in as little time as possible. EddyHR pricing is also by quote only.
- CakeHR. Another cloud-based system, CakeHR offers six modules—from Recruitment Management, Expenses Management, Timesheets Management, Shift Scheduling, Leave Management, to Performance Management—to ensure nothing is left uncovered to get your HR needs to its highest level. Each module comes with a price tag, while pricing for the core application starts at €3.50 per employee per month.
- ClearCompany. This HR software automates applicant tracking and talent acquisition, functions that can help small businesses that have no dedicated recruitment personnel to speak of. It’s mobile capable too, useful for businesspe0ple who are always on the move. Pricing for this software is by quote only.
- Paycor. A unified HCM application, Paycor offers applicant tracking, candidate screening, onboarding, and human resource management among others. It covers compliance and comes with time clock software, excellent values for any company. As with most products here, pricing for Paycor is by quote only.
- Workday. This cloud-based HR software is packed with features that you will hardly need to turn your head for any functionality that might come to your mind. There’s the usual recruitment tools, time tracking, and people management, but tools for business management, invoicing, procurement, workforce analytics, global payroll tools among many others will likely make you take a close look at this solution. As expected, pricing for the multiple capabilities requires you to reach out to the vendor for the specific package you might have in mind.
- Empuls. This is an employee engagement software solution. It allows HR teams to engage employees in different ways. Key features include chat, comments, media sharing, and reactions. As they are reminiscent of popular social media platforms, they are very intuitive to use. Plus, the product also has a neat feature that collects data on user experience. This enables companies to generate actionable insights into KPIs such as productivity, attrition, and satisfaction among many. It also has custom rewards automation solutions.
- Zappyhire is a recruitment automation platform with a suite of tools to better engage candidates, shorten time-to-fill and deliver a top-notch end-to-end experience. Empower your teams with advanced ATS + CRM functionality that adapts to your workflow, and get access to the right talent with the never-seen-before combo of end-to-end automation, data intelligence, and unmatched user experience. Along with social recruiting & recruitment marketing capabilities, you’ll get automated candidate assessment reports, robotic video interviews, and recruiting chatbots – all at a very affordable price.’
UPDF. This is an HR document management tool that can help HR departments edit PDF files, copy and paste PDF texts, convert PDF to any editable format, and compress PDF files to ease email sending and sharing files via link, QR code, or email. It can also help store your PDF files in UPDFCloud where you can access them at any device. UPDF offers a free trial version with limited features and the paid version costs $39.99 per year and $59.99 for a lifetime license.
Benefits of an HR Software
HR solutions bring to the table myriad benefits for enterprise clients, managers, and HR teams. For one, they help companies automate HR tasks such as email alerts, updating the company’s database, equipment distribution, shift scheduling, and more. This reduces the amount of manual, repetitive, and tedious workload for HR departments, saving companies much time and allowing employees to focus instead on more productive tasks.
Also, HR solutions keep your employee database organized in one centralized platform, making it easier to track each employee’s data and records whenever you need them. No matter the size of your workforce, you can easily consolidate all company records and information in a single database for a faster and better HR management.
Most HR solutions also provide powerful analytics and actionable insights for businesses, enabling them to make strategic and data-driven decisions. Demographic details of applicants, employee performance, and productivity reports are only some of the beneficial data points that HR teams use to facilitate better work environments and maximize employee potential.
HR platforms also help ease compliance worries. Aside from wage and hour law compliance, cloud-based HR solutions usually have updated compliance information, allowing you to keep up with changing laws and regulations.
Other benefits of HR software include the following:
- Eliminates the need for paper documents
- Allows HR to focus on more productive tasks and long-term strategic goals.
- Reduces human errors
- Increases the efficiency of your HR department
- Gives employees access to their personal information and other important company data
- Manages payroll and benefits enrollment in a breeze
Different Types of HR Software
There are three main types of HR solutions recognized by industry experts—HRIS, HRMS, and HCM. Some solutions offer a comprehensive set of features, but you can also find some platforms that cater to a limited and specific set of functions.
- Human resource information system (HRIS). HR tools that fall under this category focus on personnel information. These tools are used to update and record employees’ birth dates, Social Security numbers, addresses, national identification numbers, and other required information in the company database. Some also handle payroll and salary information, compliance, and benefits management. These functions are usually enough for small to midsize businesses to kickstart their HR management.
- Human resource management system (HRMS). HRMS is basically an extended version of HRIS, adding recruitment, performance evaluations, and training tools into the mix of a single HR platform. This type of HR software helps companies achieve an efficient and competent workforce by providing talent-focused tools like applicant tracking, employee engagement, and learning management features. It usually comes with a recruitment system that assists you throughout the entire process—from attracting the perfect candidates to administering internal training programs. These tools are perfect for companies looking for continuous growth and employee development.
- Human capital management (HCM). HCM solutions combine HRIS and HRMS function in one platform. They are the most employee-centric type of HR software. They offer tools to help you manage and track each employee’s performance through time and attendance tracking, compliance tools, shift scheduling, and more. These tools allow HR teams to monitor your company’s workforce and align employee performance with company-specific goals.
Common Features of an HR Software
Having an effective HR software in place brings out the full potential and efficiency of your HR team. The majority of businesses nowadays have made the switch from spreadsheets and filing cabinets to functional HR software. Here are the most common features you can find in HR software.
An essential feature of HR software is its recruitment tool, which handles job postings and helps HR teams attract top talents. It gives you a central database where you can organize job openings and applicant information, making it easier for you to keep tabs on potential employee information for future reference.
In most cases, HR solutions offer an applicant tracking system that streamlines your hiring processes. It automates receiving and sorting of job applications, which makes it especially helpful to larger enterprises that have to sort through hundreds of resumes daily.
This is a nifty feature that helps new hires go through their first day without any confusion on company workflows. Most HR solutions allow you to automate onboarding tasks. For instance, they can automatically send new employees welcome emails and tasks. Some even enable e-signatures to help you complete paperwork faster.
Modern HRIS systems now offer an employee self-service HR portal. This saves HR departments a lot of time dealing with trivial employee questions and inquiries. It gives employees access to their own payroll, schedules, and benefits information. They can also update their personal information from the portal at any given time to ensure accurate record-keeping and to reduce entry errors.
With the time tracking feature, employees can easily clock in and out or enter manual hours in the system you are using. Some time tracking tools record work hours in real-time as employees start their shift, but other solutions offer timesheets that employees can submit for editing or approval. This feature helps employees keep an accurate record of their work hours and prevent forgotten entries.
Most HR solutions have a performance evaluation feature to help HR managers during employee appraisals. With it, you can easily access each employee’s performance reports and identify productive employees. Some tools also offer performance evaluation on a larger, organizational-level scale, showing you departmental and company-wide appraisal.
As one of the most critical aspects of HR management, automating payroll processes can be a gamechanger for many. Payroll systems sync hours and automatically calculate wages and taxes. Some also cover tax filing, where they file your taxes to the right government agencies.
Reporting and analytics
Another important function of HR software is its ability to generate reports—for employee absence, performance, workforce planning, approval tracking, and other relevant information. Generally, you can use templates to easily create HR analytics reports at the last minute in time for a presentation. Having HR data accessible anytime, you can make strategic, proactive business decisions based on accurate figures and statistics rather than guesswork.
A centralized hub for employee training allows you to hone the skills of your existing employees and align their performance with your company’s needs and objectives. A number of HR solutions offer this feature, allowing HR teams to develop the company’s talent pool from a single platform.
Using HR software for benefits management offers employees new and faster ways to enroll in your benefits programs. For the HR team, this means less burden and a smoother process of benefits enrollment.
Implementing an HR management software for your company is a massive step towards a more efficient HR department. If you play your cards right, an effective HR solution can only lead you to a higher productivity rate and better ROI. But what happens if the tool you have picked does not live up to your expectations?
To answer that, here are some potential issues you may encounter when you go for an HR tool:
- Excessive time spent on software adaptation. Switching from manual processes to a digital solution can be overwhelming for some employees. Expect to hear complaints, especially when it turns out that you are using a complicated HR platform.
- Unscalable systems. Some companies often make the mistake of choosing an unscalable solution for their business. When you only have a handful of employees, you might think that it’s useless to pay for additional HR tools you might not be using anytime soon. The catch is that an unscalable system won’t fit growing businesses. This leaves you with two dreadful options when you need a bigger platform. Either you invest in an additional tool that’s different, or you start from scratch to use a new one.
- Switching between different systems. The HR department covers a wide range of tasks—recruitment, employee management, and payroll are only a few of them. Chances are you already have an existing software that covers some HR functions. While these tools streamline business processes, using too many systems can be a cause of confusion for HR personnel.
- Compliance issues. Running a business does not stop at having enough customers buying your products and services—you also need to follow a number of federal, state, and local employment regulations. It can be tricky to handle compliance tasks when you have an outdated, non-integrated HR system.
Factors to Consider in Choosing an HR Software
To overcome the complications in using an HR software, check the list below for things to consider when picking out an HR software for your company:
- User-friendly platform. It’s important to consider the software’s ease of use before implementing them. Employees and managers, as much as possible, must be involved with the adaptation of the software, and a fair amount of time must be allotted for everyone to get used to the system.
- Scalability. A good tactic is to consider your company’s growth and future endeavors—a scalable HR system will allow you to easily handle a bigger team. Plus, it saves you the time and cost of starting from scratch all over again with a new software once your business requires more functions.
- Included features. You may want to stick to an all-in-one HR platform. It usually covers all aspects of your processes. This way, you can prevent having to use different systems. There are a number of HR platforms that offer a complete suite for all aspects of HR management, from recruitment and onboarding to employee management and payroll processing.
- Compliance tools. With the help of a robust HR platform with compliance features, you will not have to worry about missing any legal requirements. Some solutions even cover tax filing—they automatically calculate your taxes and submits them to the right government agencies.
- Data and analytics. Any great HR software should be able to provide advanced analytics and reporting tools. Having the essential employee data right at your fingertips can give you a competitive advantage. For instance, performance reports can help you identify the more productive employees, or you can spot factors that affect the productivity of your workforce.
Latest HR Trends
The HR industry is evolving at a rapid pace. From record-keeping of employee information and simple manpower development, we now see a far more automated and cost-cutting HR management in various businesses. Keeping tabs on the latest HR trends will allow you to leverage modern approaches in your processes and have better chances of improving the efficiency of your HR team. Here are the latest HR trends you need to look out for:
AI application in HR
AI in the HR space is no longer in the experimental stage. Most businesses have already jumped the gun and adopted AI in their HR processes, especially in administrative tasks, recruitment, and talent acquisition. With the help of AI algorithms, companies can personalize onboarding, relieve the HR staff of manual workload, and build highly effective learning pathways for employees.
AI-based analytics is also emerging as a key driver of business growth. HR leaders and managers leverage AI-based data to augment business decisions and strategies.
One example is the multinational IT company IBM. Using AI, they analyzed employee performance and behavior. This allowed them to predict which employees are likely to get a raise or resign from their post. After a series of experimental programs and data point analyses, IBM’s artificial intelligence technology devoted to employee retention successfully delivered a 95% accuracy on predicting employee flight risk. This technology saved the company about $300 million in retention costs.
While others are worried about AI taking over HR jobs, industry experts are positive that the human aspect of human resources will remain at all costs. AI technology relies heavily on pattern recognition and data processing. However, hiring, engaging employees and making business decisions stay as crucial jobs for HR personnel.
Employee experience, or “EX,” is the newest buzzword in the HR industry. It is derived from the concept of user experience in software design and customer experience in marketing. This trend refers to how employees perceive their interaction with their employers throughout the entire employee lifecycle, from recruitment to exit. There are three main areas of work that make up the entire employee experience: physical, cultural, and technological workplace environments.
That said, the HR industry is seeing a drastic shift in its retention and employer branding approach. From employee engagement, it is now leaning toward employee experience. By delivering a positive employee experience, companies ensure that their brand is perceived as a great place to work at by existing and future employees. Considering that today’s workers switch jobs every five years or less, a favorable employee experience also gives your company better chances of retaining employees.
Compared to employee engagement, employee experience is more about how employees’ satisfaction with their work and companies affects their performance. Employee engagement focuses on the relationship between an organization and its employees. However, it is only a byproduct of positive employee experience. The latter, meanwhile, pinpoints the factors that keep employees engaged at work.
Focus on talent acquisition and retention
New and improved technology has only made the war for talent even more competitive. These days, resumes are flooding recruiters’ inboxes at increasing rates. Thus, modern tools have become much-needed solutions to help businesses find the right talents. Using applicant tracking systems, online assessment tools, electronic reference checking, and other tools to streamline hiring processes is the new norm in running an HR department.
However, a global survey on talent acquisition by The Talent Forecast reveals that about 10% to 25% of new hires quit their jobs within the first six months. Hence, most businesses have their HR teams more focused on talent acquisition and retention. They offer candidates more flexible work options, cultivate an open culture in the workplace, and provide competitive benefits.
By applying these innovative approaches to attract and retain top candidates, companies prevent costly and disruptive turnovers.