HR Software: What It Is And How To Choose The Best Solution In 2023
By: Brian Habibi -
Modified Date: October 25, 2023
Table of contents
HR management involves a lot of tasks, from finding new talent to ensuring current employees are looked after. It’s a lot of paperwork and communication with different players within an organization. The business world has been through a lot in the past decade. The department that has gone through the biggest transformation is undoubtedly the Human Resources department. They have had to adapt to the changing workplace and learn to deal with an increasingly connected and digital world. It’s not a surprise that many organizations are turning towards HR software to keep going.
What Is HR Software?
HR software is an online cloud-based software solution used for managing employee information and HR-related tasks for most large and small-scale businesses. These include everything from basic software that tracks employee data to complex solutions that manage your entire human resources department. The role of HR software is to help with these processes and, preferably, make them smoother and more efficient. When HR software works well, it makes the daily tasks of HR professionals easier – helping them save time and resources.
HR tools started using technology ever since computers first made their way into the workplace. As technology developed, software systems also became more complex and more available. The real explosion of HR software began in the 1980s, and the web-based systems of the 1990s increased the usability of the systems.
Nowadays, most HR tools are cloud-based. Cloud HR systems integrate with other data management systems and are often customizable.
What Are the Different Types of HR Software?
Modern Human Resource Software comes in all shapes and sizes. Just as there are numerous different HR tasks, so are there countless software solutions to dealing with these products.
The most common HR software types are:
Human Resource Information Systems (HRIS) – A comprehensive and popular choice that covers many HR functionalities, from recruitment to workflow and payroll.
Human Capital Management (HCM) – HCM includes all the functionalities of HRIS but also adds talent management to the list. The software can provide more functionality for multinational companies, as it is very often a multi-lingual and multi-currency HR platform.
Human Resource Management Systems (HRMS) – HRMS builds up on the above two, combining HRIS and many functionalities of HCM.
Applicant Tracking Systems (ATS) – A centralized platform where companies manage recruitment. ATS can post job openings, store job applications, and track applicants through the hiring funnel.
Payroll Systems – Tracks employee wage and salary information. Payroll software can calculate total compensation, transfer funds, and stay on top of tax and other information.
In essence, there are many types of software, from the more comprehensive systems, such as HRMS and HRIS, to the more specific systems, like payroll or recruitment software.
Key Features of an HR Software
The features of your HR software depend on the type of software you use. As the above showed, countless different types of platforms perform unique functionalities. A comprehensive HR software can cover everything from talent management to payroll. On the other hand, many specialized software systems can only focus on one aspect of the HR department. For example, payroll systems could include attendance tracking and vacation pay calculations but have nothing to do with new talent recruitment.
The most common HR software features include the following:
Employee data management
Document storage and management
Reporting and analytics
Workflows and approvals
Letters and documents requests
While a specific software may not have all the features, it could still integrate with other HR platforms. Essentially, your payroll system might communicate with your talent management system and vice versa.
Integrated vs Segregated HR Systems
Choosing between integrated and segregated systems is a key part of selecting the right HR software.
A segregated system is often called standalone software. These are the more specified solutions that often focus on a single function. The benefit of a segregated system was that it would provide specialized solutions to dealing with specific HR problems. You would enjoy a professional system that would be easy to use and understand.
More recently, integrated HR systems have become much more popular. These are solutions that include a lot more functionality, allowing organizations to use a single software to deal with HR problems. The benefit is that you only need to learn to use a single system, making it easier for HR professionals to stay on top of things. But you also add complexity which is something to keep in mind.
Why Do You Need an HR System Software?
But what is the benefit of HR software? Do businesses need to consider adding technology to HR operations?
To answer that question, you need to understand the current challenges HR teams must face going forward. One of the biggest concerns HR professionals have in today’s workplace is:
Talent acquisition – Finding the right candidate, vetting, and securing commitment can take time. LinkedIn Data shows that the hiring process takes around 47 days compared to just 25 in 2014. The longer times can add a lot of pressure on the existing workforce.
Talent retention – Many organizations are dealing with high turnover, as people aren’t staying put these days. Loyalty can be hard to obtain, and HR professionals need to find ways to maintain morale and retain top talent.
Remote work – Although the days of the pandemic lockdowns are more or less a thing of the past, remote work is here to stay. Studies have shown that employees want more flexibility and often even prefer remote work. But working from home isn’t without its challenges.
Corporate responsibility – Customers and employees are concerned about corporate responsibility and ethics. People are looking for sustainable organizations that care for their communities. HR professionals are often at the forefront of showing corporate responsibility, adding additional pressure on them.
These challenges mean that HR professionals need to ensure they are cultivating talent and keeping employees happy. In order to do that, they don’t want to sit around and waste a lot of time on manual tasks like inputting employee information into a system. But just because a task is mundane or time-consuming, it isn’t necessarily unimportant. For example, issues with payroll could hurt employee morale and lead to even further talent retention. HR technology plays a crucial part in allowing HR professionals to respond to these challenges without overlooking those vital tasks.
What are the benefits of HR software?
HR software allows you to automate certain tasks, freeing your HR professionals to focus on the most pressing matters. Payroll is a great example of this. Payroll software can automate absence tracking and holiday pay calculations which are time-consuming to do manually. With the extra time, your HR department can instead focus on things like recruitment or talent retention.
2. Reduce errors
Technology is excellent at reducing costly errors. Manually inputting lots of data can result in minor mistakes. But even the slightest of typing errors could end up costing a lot of money for your business. With HR software, you can be sure information is accurate and compliant with the latest local rules and regulations.
3. Develop your employees
HR systems put a lot of focus on employee development. Having a good employee development program will help your business in the long run. It improves the talent pool at your disposal and helps motivate your employees. As a result, you’ll have more productive, skilled and satisfied workers.
4. Improve security
Just as HR tools can reduce risks, they can also improve your overall security. Cloud HR systems can help ensure your data is stored safely. Since you’re not manually holding onto files in a cabinet locked away in your office, you don’t need to put as much money into the security systems. You are protected against things such as fires or even malicious actors accessing the files. Good HR software always follows the latest security protocols and can help boost your data safety.
5. Boost wellbeing
It might seem silly, but HR software can have a significant impact on employee wellbeing. First, the tools let you look after your employees’ health in many ways. You can monitor and set up proper health insurance systems, ensure employees take enough vacation days, and can look into issues if specific employees are always taking time off. But you’ll also introduce a lot more employee agencies to your systems. Modern HR software lets employees control their data and be part of things like inputting feedback. This control will lead to happier employees who feel like part of your business.
What are you looking for in HR Software?
HR software is an essential part of a modern business. The benefits are impressive and can help a small business survive the storms. But picking the right software shouldn’t be an afterthought. The fact is that there are many types of software solutions out there. Not all of them will be good for your business.
The main things you need to keep in mind when buying HR software are:
1. Integration with existing tools
Your HR tools should work with any other technology and software you are using. If you already have a payroll system in place that you don’t want to replace, it’s essential to ensure your new recruitment system will make onboarding and sharing information more accessible. Consider which software you need to share information with and then make it so that your new software is capable of this.
2. Ease of setup and migration
Overall, you want to consider how easy it’ll be to introduce the new software to your business. Adapting new software will always have a few bumps in the road. But you don’t want to pick a solution that requires your HR professionals to spend six months struggling to learn it. It is a great idea to involve the users (HR professionals) into the choosing process. Their input in terms of what software would work the best can be invaluable.
HR management is a global field, and your location has enormous implications for the work the HR department has to do. Regional compliance issues can be fundamental in things like labour laws and payroll. But even data storage now has major implications, especially after the EU’s introduction of the GDPR rules. Compliance can be made more complicated if your business also operates on a global scale. It is crucial to pick HR software that understands regional compliance issues. While American HR software might look good on paper, it might not be as good as dealing with UAE compliance issues. It all depends on the software and its take on dealing with rules and regulations.
4. ROI of using HRMS
You shouldn’t pick HR software and simply stare at the price tag. The truth is that price alone won’t really reveal to you the cost of the software. HR software should be thought of as an investment. The automation and ease of use will start paying themselves back. The recruitment software could help you save money in the long run because you are hiring talent that fits your company and sees your retention rates improve. So ensure you are calculating and considering the monetary impact of the software and not just the upfront cost.
Human resource management software can seem like an additional technology you don’t need. But it is actually the most important tool at your disposal. It can transform your organization into a better-functioning business with happier employees.
A comprehensive and integrated system like Bayzat looks after your payroll, benefits, health insurance and performance management. Because of the cloud-based nature, you can grow your business further, and the software will grow and expand with you. These are the types of features that can really help your business foster.
The future is full of HR challenges that you need to overcome. The fight for top talent is increasingly tough, and businesses need to be mindful of their resources. HR software can help guarantee your resources are going towards the most important thing: keeping your employees motivated and productive.