The reason an HR software came into existence was to support the HR department to streamline their processes and automate their micromanagement activities.
The focus of HR software is to relieve the HRs from their mundane activities so that they could focus on their real function. The real function of an HR is to attract and retain the right talent, to build up a healthy work environment, to keep an eye on the well-being of the employees and also add up to the internal and external branding of the organization.
An HR software should automate processes right from payroll to performance management system. In other words, it should provide an end to end solution for HRs.
How to identify the Best HR Software
Question and things to consider when looking for the best HR software:
- Should I go for Software-as-a-Service or on-premise?
- Chose All-in-one or best-of-breed?
- Where is your business (and subsidiaries) located?
- Which features are most important to you?
- Price? (How much does it cost)
Here’s a detailed guide on how to go about it.
SaaS vs. on-premise
This one is pretty easy when you’re a small company. On-premise is usually much more expensive and takes much longer to set up. You’ll probably want to go for software-as-a-service.
All-in-one vs. best-of-breed
You can either combine the best recruitment tool with the best feedback to and the most suitable payroll tool or just go with one tool that covers all/most areas but probably not as good as the specialists.
Pros and Cons of All-in-one Vs Best-of-breed
Best-of-breed will result in the best possible individual features but leads to a lot of dependencies between tools. This is generally harder to set up and can be more costly. Data quality can become an issue.
An all-in-one tool usually offers less functionality but is easier to work with. You’ll finally have all the data in one place which is necessary if you want to have overarching reports. Basic functionality will probably do for you if you’re an SME.
Where is your business located?
Are you operating in the US only? Do you have subsidiaries outside of the US? Is your headquarters in Europe?
If your employees are all based in the US it’s easy: go with an American tool. BambooHR and Namely are safe bets here.
If you employ people in Europe, for example, you’ll have to keep in mind the legal requirements that most US-based providers fail to meet. Data security plays a huge role here. You’re likely better of choosing a European tool like Personio.
Which features do you need?
This is where most people start. I guess you don’t need much help here. Talk to at least 3 vendors and test them thoroughly. Don’t just rely on an online demo but invest a couple of hours to test each one.
Not much to explain here. But price shouldn’t be your major priority, though it’s should be for startups but not for big and growing businesses.
Features of a Good HR Software
Payroll management: Processing payroll is the most complex and time-consuming task. It is one of the top concerns of an organization and is a highly sensitive process. An HR software should have a payroll management system that should not only simplify the process of monthly payroll but also carry it out in the most effective and efficient manner.
Payroll management should be at the top of the feature list while searching for HR software.
Performance management: Employees are the most important asset to an organization. Monitoring their productivity, keeping a track of their performance matrix, aligning their goals with the goals of the organization and also mentoring them towards their personal growth. All these activities need an intelligent and robust Performance management system.
I would say the Performance management system is important to run a healthy organization, and it should be in the feature checklist for HR software.
Leave management: I have seen HRs frustrated, keeping a track of their employee’s leave packet and approving leaves for them. The leave system of an organization should be fully automated with no unnecessary dependencies.
Thus, leave management system should be one of the important features to look for in an HR software.
Attendance management: An HR software should have a fully integrated attendance management system that could capture real-time attendance and could be integrated with all standard biometric devices.
A fully functional real-time attendance management system removes almost half of the burden on an HR person. Thus, an attendance management system is also an important feature.
Analytics and Reports: Analytics and Reports, or you may call it MIS(Management Information System) is one of the important features one should be looking for in an HR software. Analytics in HR system gives deep insights into the internal functioning of an organization.
It gives insights about the financial aspect of the organization and its employees, insights about the projects and work allocations, insights about leaves and attendance of the employees, insights about retention and attrition rate and much more. In other words, analytics and reports of this kind are very important for an organization for effective decision-making.
These are the prominent features which an HR software must-have. Along with these, few more micro-features I would like to add up are:
- Web Clock-In system
- Remote Login system
- Tax management system
- Expenses and Reimbursement system
- Loan and Bonuses management system
- Asset management system
- Employee Engagement module
- Grievance management
I believe it should be one of the special features to consider while selecting an HR software.
These features I listed above are important ones that every HR software must-have. There are other customized features as well but it would be industry/segment-specific so I have not mentioned them. The above feature list is a generalized one.
Key Criteria for choosing an HR Software
So, how to start your search for the perfect HR software? We are here to help you in selecting a core HR software with all important features and functionalities. Let’s have a look at the five important factors, which you need to consider when purchasing HR software.
HR departments are often struggling to find a scalable software solution to manage their expanding workforce. According to a survey conducted by Human Capital Institute, only 43 percent of companies agree that they have found a scalable solution for human resource management. Many are still struggling to zero in on an HR solution with scalable features. If you ask these questions at the time of purchase, then you can be on the profitable side:
Is there any limit to the maximum number of employees the software can support in the coming time? Will it be able to align with other business processes, as the company grows? Are its features scalable, and what new features can be added up with time?
It is important that the features of HR software scale-up, as your company grows. Else, it will not align with the benefits which you intend to provide your employees with every growing stage.
A right HCM will not only make the HR ecosystem in your office easier but will also integrate seamlessly with other business processes. An HR software that serves your HR department well but obstructs the functioning of other internal systems is not worth considering. Look for an HR software that is flexible enough to be a part of the existing pack.
Ask the vendor about custom integration feature, so that you can build your own integration between different systems in your office. But, if you lack the IT support in-house, ask third-party vendors for smart integration features.
Intuitive User Interface
A good HR software is expected to make the life of HR professionals easier. But when they choose an HCM that is hard to navigate, their work is bound to double up. Frequent queries of employees about how to use the HR software can disrupt their productivity. Only an HR software with an intuitive user interface can serve the purpose right.
The user interface should be easy to navigate and help employees in facilitating different actions. Go for an intuitive system that can anticipate the needs of users and provide them easy access to important modules.
HR Data & Analytics
The increased importance of HR data can be felt in the corporate world, and so reporting tools are increasingly in demand. In the age of the data revolution, HR professionals are often left perplexed with big data. An HR software with advanced reporting and analytics tools can help professionals in getting rid of administrative tasks finally so that they can focus more on strategic leadership and decision-making tasks.
A good HCM with advanced reporting tools also provides HR professionals a competitive advantage, as they can manage employee data efficiently and have a better understanding of their work profile.
Along with the easy and intuitive user interface, competent customer service at hand is equally important. A great HR software needs to come in the package of great customer service to help its users at every stage of implementation. Users often deal with simple issues themselves, but as the problem gets complex, they need expert assistance.
So, check if the customer service team of an HR software vendor is competitive enough to address the issues of your users, as they navigate through different modules.
Picking the right HR software may take some time, but the shortcut route with little research may land you in trouble. So, make sure to consider all factors before making an investment in HR software.
Demo/Free Trial: Nothing is better than having a firsthand experience of the software. Generally, good software vendors give a free trial experience to its users.
The Top 8 Best HR Software
Here’s the list…
For your essential HR software needs, BambooHR provides personnel data modules, tracking, and advanced reporting capabilities. The system utilizes a stripped-down mechanism to follow the performance, which makes it a good choice for growing your company. It covers remote and decentralized teams with flawlessly performing apps for all operational systems.
For applicant tracking, BambooHR displays job openings in a separate tab, where you get to see all applications, applicant leads, and select or eliminate applications as they arrive. Likewise, you can add new job openings with such relevant details as salary, title, duration, contract type, etc. You can do this via a filtered dropdown menu or the system’s special text editor to add a longer description.
Once you have the list ready and completed, you can share it on all social networks or popular job boards to properly launch your applicant search.
The newest addition to the Freshworks productivity family, Freshteam presents a compact implementation of core applicant tracking and recruitment CRM features. The platform makes it easy for you to focus on quality candidates and retain control over the hiring process, and do so in line with your own rules and policies.
Suitable for businesses from all scales and industries, Freshteam is moderately priced and offers a free package for small teams with basic necessities.
Tightly integrated with other solutions in Freshworks’ landscape, Freshteam assesses suitable candidates and shows the information in functional units to accelerate feedback and interviewing. At the same time, Freshteam makes it possible to engage with candidates about the provision of professional service, and make decisions straight within the team with all details considered.
It stores those relevant records in a searchable candidate database, all of which are protected according to the highest security standards. This makes Freshteam ideal for HR teams, for those recruitment-exclusive agencies that wish to manage work from a single, unified dashboard.
Freshteam is essentially agnostic in terms of verticals, industries, and companies, meaning it delivers just as well for teams/businesses of all sizes and companies.
#3: Gusto HR
Gusto HR delivers all the essential HCM functionalities for successful onboarding and performance management in a modern, easy-to-use console that also features rich industry-leading benefits and payroll administration functions.
Gusto HR covers onboarding, PTO and compliance along with just the right amount of customization to adapt to your specific needs and requirements. Gusto is lauded for significantly improving the hiring experience while ensuring that compliance is handled accurately and on time.
New hires receive slick offer letters and welcoming messages with the necessary instructions, and then invited to sign their forms and contracts online within a secure environment.
Each new hire’s record and a detailed profile in the system is automatically synced with the payroll and benefits module, with the option to add and modify data using the self-onboarding functionality.
Gusto will also allow them to subscribe for particular benefits without your supervision, and to submit time-off requests aligned with current schedules to spare you the efforts of approving them. You can monitor their progress too, and even conduct anonymous surveys to understand how they’re performing.
Zenefits is a popular choice among companies looking for a comprehensive payroll, employee benefits, and compliance tool. It assists you with hiring, payroll, time tracking, and lot more. With Zenefits, users can now manage all of their employees from a single HRIS hub.
Zenefits ensures paperless employee onboarding. The employees can e-sign company contracts and submit them online. Through its self-service portal, employees can manage their own accounts. The app stores data at a centralized location, accessible to all having access permit. The tax calculations, deductions and tax filing are automatically computed without an HR having to sit and do it manually.
The iOS and Android version of Zenefits let employees pull out insurance data, review pay stubs, submit a vacation request, sign-in and sign-out of shifts, and a lot more, using their mobile devices.
It has API and integrates with various apps such as Expensify, Xero, JazzHR, QuickBooks Online, Salesforce Sales Cloud, Microsoft Office 365, G Suite, Gusto, RUN Powered by ADP, Slack, Abacus, Lattice, Greenhouse, Bonusly, Officevibe, Lever, etc.
#5: Zoho People
Zoho People is Zoho’s flagship HR management product, and another very successful story in this industry. Crafted as a comprehensive online HR package, Zoho People centralizes and secures all of your employees’ data, and enables a true self-service portal where they can access and modify information, and have their requests instantly approved.
At the same time, Zoho People makes it easy to identify skills and reward talented performers with 360-degree insights and manage your workforce on the go with attractive time and attendance features.
This system is also our number one suggestion for advanced leave management, as it lets you govern custom leave types (individual employee, location, role & experience level), manage holidays based on locations, import/export leave data from third=party systems, and much more. Zoho People is also one of the most affordable systems on this list, as pricing begins at only $0.83 per employee per month.
#6: APS Online
The second highest-rated alternative is APS. One of the reasons it is rated so well is its highly rated customer service. After all, what good is a payroll or HR system if there is no one to help you whenever a problem arises? While APS is mostly known for its payroll capabilities, it offers a variety of HR applications such as performance reviews, applicant tracking, onboarding, and more.
SumHR is the cloud-based HR software that lets startups and SMEs to view and manage daily HR chorus. It is a comprehensive platform that lets businesses collate their employee and organizational data and streamline all HR process in one place. The web-based HR software is easily accessible from any corner of the world, which means 24/7 connectivity and access to valuable information right from this platform. Communication, organization, and operations were never this easy.