Choosing the Best HR Software for Your Business Needs
December 31st, 2018 • HR Process
HR software is a hot topic right now. The concept of using technology to digitize some of the core HR activities has been around for a couple of decades. More recently, organizations have truly begun to benefit from a growing choice of software on the market. Many of these programs offer customizable and flexible solutions for all requirements and budgets.
What Is HR Software?
HR software is a digital platform that allows businesses to manage key tasks and processes relating to managing employees. It supports the team in carrying out these activities, adding automation to what are otherwise time-consuming and labor-intensive processes. Typically, these processes involve a lot of paperwork and manual record-keeping.
HR software enables the HR processes that are otherwise carried out manually to be automated, meaning that they can be conducted more quickly, accurately and consistently. Many companies of varying sizes and from different industries have begun to see the benefits that HR software can bring to their organization. Hence the HR software market has grown enormously.
Types of HR Software
With the rapid advancements in HR software over recent years, there not only seems to be a never-ending list of companies offering such platforms, but multiple styles of systems as well. A simple internet search will yield scores of different HR software providers, each offering a host of benefits to your company. Since it can be difficult for a novice to get accustomed to the different features of each system, here is a simple summary of the main types to get you started.
HR Workflow Software
HR workflow software tends to focus exclusively on adding automation to the business processes to simplify existing manual procedures. Common workflows that such software focuses on are recruitment, onboarding, time and leave management and performance management. Most systems offer a standard or “vanilla” system with options to add customization so that the workflows are in tune with the existing HR processes in your business. It’s usually also possible to pay more to bolt-on extra modules so that you are only using the workflows that benefit your business.
Human Resource Information Software and Human Capital Management Software
Human Resource Information Software (HRIS) and Human Capital Management Software (HCM) are broadly similar, in that they deal with the automation of the leading HR processes of an organization. They also add template documents, forms, etc. However, HCM usually adds an extra element to this functionality by also focusing on helping the organization achieve its wider goals through workforce management.
Workforce management refers to the way that an organization manages the efficiency and productivity of its staff. Processes that form part of broader workforce management include forecasting future employee headcount, talent and succession management and ensuring that the business aligns its human resources strategy with the organization’s overall business strategy.
Human Resource Management Software
Human Resource Management Software (HRMS) is similar, but it also includes payroll, time, and attendance modules. These modules are usually offered as additional or bolt-on options as they are generally a little more complex to run as part of HR software and require more detailed customization to ensure that they mirror the organization’s processes and rules. For example, it’s essential that the software recognizes and can deal with the various rules that make up the overtime payment policy of the company, which may differ depending on the time of day, the level of employee and other factors.
Benefits of HR Software
It’s good to understand the different types of HR software out there, but the million-dollar question is: “How will using HR software make my life and the lives of my team and employees easier?”
There are many benefits to using HR software, but some of them will resonate more deeply with you, depending on the setup and style of your business and the particular areas you are struggling with. Here are some of the most common benefits:
Less paperwork and a liberated HR team
HR software automates many of the tedious administrative tasks performed by an HR team and therefore affords them more time to add real value to your business by supporting and coaching employees and line managers.
Faster and more reliable data for your organization
Run reports at the touch of a button to get specific data about different areas of your business – from employee turnover to recruitment lead time, and much more.
Reduction in HR headcount costs
Thanks to the time and money that you will save by automating many of your HR functions, it’s highly likely that you will need fewer HR administration staff to carry out tasks manually, thus reducing your employee costs in this department.
Increase in accuracy
Since many HR processes will be carried out automatically, following predetermined workflows and set rules, fewer errors are likely to occur compared with the same processes being carried out manually by an HR Administrator. A reduction in the error rate of the HR department can have many knock-on benefits. For example, more accuracy within the payroll process could lead to fewer staff complaints, or a slicker recruitment process could incentivize potential employees to work for your company. Naturally, of course, fewer errors also generally means fewer costs in correcting them.
Improvement in staff morale
Linked to the concept of fewer errors, HR software can create smooth and streamlined processes that can have a demonstrable impact on staff morale. If an employee has faith that the company that they work for can process their overtime payments quickly and correctly, offers them a structured and transparent performance appraisal process and allows them to request annual leave easily, they are likely to feel more motivated and invested in.
Opportunities to future-proof your business
Your organization is likely to grow in the future, bringing with it great opportunities but also some challenges regarding the administration of new HR procedures, increased headcount or more complex payroll rules. HR software is designed to grow in tandem with your business, allowing you to add extra features that you may not have previously needed, redesign existing workflows and increase your employee record capacity, allowing you to more efficiently manage this challenging time.
Functions of HR Software
The HR management software that you choose will vary in its features and functionalities from others on the market – that’s why you need to carefully look at the options available before you invest. There are several key functions that the majority of systems cover to a greater or lesser extent, as follows:
Keeping track of the various parts of the recruitment process can be time-consuming and messy. With HR software, you can quickly create job ads from templates, track candidate response, and simplify shortlisting. You can then immediately send automated interview invitations by email, log interview feedback and generate new employee records before the start of the onboarding process.
When you have hired a new employee, it’s essential to coordinate the activities that need to be carried out across different departments to ensure that they have a seamless and enjoyable start to their employment with you. HR software allows you to automate your onboarding process and easily create new employee records and generate contract and letter templates at the touch of a button. You can also arrange the induction for your new team member by booking their place on training courses, ordering their IT equipment and even automatically sending them a welcome email on their first day.
You can set up performance appraisal reminders for employees and managers so that they don’t miss appraisal meetings. Moreover, HR software enables you to automatically collate feedback and objective scores and report on team performance quickly and easily.
A great benefit of HR software is that it allows employees to request leave online and managers to digitally authorize it, massively speeding up what can otherwise be an extraordinarily manual and labor-intensive leave management process for all parties.
Let the system coordinate working schedules within departments, work with your organization’s built-in rules to automatically calculate overtime and time owing, and ensure adequate staff cover across the working week, leading to fewer staff shortages and greater productivity.
Automate the exit process by automatically archiving and storing records, creating template letters and forms to aid with the exit processes, and managing and reporting on key trends gained from exit interviews with the aim of addressing critical areas of employee dissatisfaction to reduce staff turnover.
Features to Look For in HR Software
Before you choose the HR software for your organization, ask yourself the following questions.
- Does the system meet my budget for both ongoing costs and implementation/set up costs?
- Does the system offer the key functionalities that are needed to fix problems or improve efficiencies across the HR team?
- Does the HR software’s reporting capabilities offer good variation and options?
- Can the HR system grow with my business if necessary, offering extra bolt-on features and scalable functions?
- Does the HR software provider offer comprehensive and easily accessible customer support so that I can resolve issues quickly and ensure that I am getting the most from my investment?
- Are there good enough options for employee and manager self-service within the system, to move accountability from the HR team where necessary?
HR software can offer dramatic benefits to businesses of all shapes and sizes. This valuable software can automate processes, saving the time and resources of the HR team, and contributing positively towards wider business success by providing meaningful data to managers to address strengths and weaknesses within the people function of the business.