Human resource management is the most significant function of a company crossing every other functional area and impacting every employee in the company. It refers to how companies manage their workforce from hire to retire.
However, with the complexity of businesses on the rise, it becomes overwhelming for HR administrators to manage these functions optimally and satisfy each employee. The ‘Great Resignation’ isn’t just a hyped-up trend.
The 2021 Microsoft Work Trend Index report states that 41% of employees are considering quitting their jobs and another by Gallup says that 85% of the employees aren’t engaged at work. HR administrators can use powerful HCM tools like pulse surveys, employee benefits, recognition schemes, etc., to bridge the engagement gap and retain employees.
What is a Human Capital Management (HCM) software system?
A human capital management software or HCM system is an integrated suite of technologies that transforms conventional HR administrative functions such as recruitment, training, compensation, and performance management to bolster productivity, drive engagement, and add business value.
By considering the challenges of managing these traditional HR functions as an opportunity to drive employee morale and productivity, HCM expands and maximizes the core asset value of the workforce via strategic investment.
A good HCM system will implement the HCM strategy of any organization using a set of modern IT applications in hiring, benefits and compensation management, HR compliance, training and development, and performance reporting.
How are HCM software systems compared?
For any firm looking to onboard an HCM software solution, sifting through a barrage of options and narrowing down to the final choice can be a tedious task.
However, HR administrators can use some concrete criteria to gauge the worth of each HCM software based on the features and functions each offers and the key differences between the two.
A data-driven comprehensive analysis laden with facts and metrics will give a true-blue picture of the comparison and the ultimate winner for human capital management software. A few of these criteria involve questions like
- Whether the software is compatible with a desktop or is available as an iOS or Android app?.
- Whether it is cloud-based? Does it have AI capabilities?
- Does it serve small, mid-size, or enterprise-level organizations – the level of customization available per the workforce count?
- What kind of price pricing options does it offer? Is there a free trial available?
- Which markets does it serve? Will there be an acclimatized version available for each country and region?
- Is the software available in multiple languages?
- What do the community reviews say about the software?
- How’s the customer service? Will there be dedicated customer support?
- Does the HCM solution offer value for money and ease of use?
- Who will handle the implementation – the HCM vendor or a third party?
- How many modules and functions can the software solution handle? These may include functions like:
- Talent acquisition
- Core HR
- Talent management
- Workforce management
- Employee self-service
- Product technology
Key Features to look for in HCM software
Comparing different HCM solutions can help you narrow down your search for the best HCM software solution. But it is essential that you evaluate the software based on the current and future HCM requirements for your organization. Some of these features include
A software solution that meets the needs of an organization across its hierarchy and can be personalized by function, location, team, and individual. The solution must be built to handle multiple functions such as benefits management, compensation management, workforce management, and talent management.
For any organization whose operations are spread across diverse locations, a compliant HCM solution is necessary. HCM software must comply with the changing regulatory requirements at all levels – state, national and global. Also, the system must be capable of handling diverse workforce requirements like multilingual payroll and support.
#3 Security and Privacy
An HCM system must come with robust security measures to safeguard the business process, infrastructure, and sensitive employee data against hacks and other security risks. Make sure the HCM system has multiple security and backup layers and system redundancy to handle an influx of critical information.
Also, as organizations get more complex and more sophisticated by the day, an HCM system with advanced services such as privacy, fraud, and crisis management should be preferred.
#4 Proven Implementation Model
Always opt for vendors with a proven track record of successful data conversions and third-party integrations. An HCM system that looks forward to continuously innovating its offerings and enhancing employee engagement can be a great fit for any organization.
#5 Data analytics
An HCM system that transforms real-time data into insights to promote better decision-making is the right fit for any organization looking to build its capabilities further. While looking for such solutions, organizations should prefer those with a centralized data set, configurable analytics, industry-wide comparative analytics, and predictive analytics for forecasting.
#6 Employee support
A great HCM software solution should help employees evolve and grow during their lifecycle as an employee. Such software should help foster employee engagement, performance, and overall development.
Top 7 Best HCM Software for Organizations
Here are the 7 HCM software solutions that fit the criteria for the best HRM solutions for any organization. Let’s decode each HCM vendor, its salient features, pros, and cons, one by one:
Rippling is one of the easiest-to-use HCM software. By giving businesses a single center to run HR, IT, and Finance, Rippling allows for the integration of workforce systems scattered across the company, including payroll, employee benefits, expenses, computers, etc.
- Organizes employees in an organizational structure that can be used for reporting and permissions within the application.
- Tracks key employee metrics, including time, attendance, sick time, schedules, paid time off, and other related information.
- Helps employees to submit expense reports and track reimbursements.
- Fully-compliant tracking and reporting
- Helps employees to manage their benefit plans
- Assists employers in managing and reporting payroll deductions
|Customizes and accommodates unique administrative processes of organizations||The task notifications are outdated.|
|Integrates and communicates well with other software and APIs||Limited automation available compared to other HRM software.|
|Multi-lingual and supports multi-currency transactions||The system gets a bit clunky at times.|
|Consistent and reliable|
|Accessible from a mobile device|
Pricing is available on request.
BambooHR is an award-winning HCM software that helps organizations to automate, connect, and centralize employee data in one place, find and hire the best talent, and gather valuable insights. It has clients like Fitbit, Fab, FreshBooks, and Squarespace, among others, spread across 150 countries.
- Offers an expansive marketplace for pre-built integrations to keep all HR processes connected and aligned.
- Manages and integrates employee data
- Helps to hire and onboard qualified candidates
- Tracks and gathers valuable metrics and insights
- Allows user, role, and access management
|User-friendly interface with a centralized dashboard||Limited filters and customizations|
|Personalized reports and performance appraisals||Less developed ATS|
|Automated team introductions and onboarding workflows||Some setting up functions are complex to understand|
|Efficient onboarding and hiring functions||Tedious and limited in-platform customizations|
|Great customer service|
BambooHR Essential plan and Advantage plan start at $5.25 per month and $8.55 per month.
#3 CAVU HCM
CAVU, an acronym for Ceiling and Visibility Unlimited, is a national boutique payroll and HR technology and services firm. It provides all-in-one tech suites for recruiting, HR, and payroll Each client gets a dedicated Payroll Guide to help them wade through the functionalities and utilities of the application.
- Automates and manages payroll administration
- Payroll tax calculation
- Business intelligence suite with real-time dashboards
- Integrates the company’s general ledger into Quickbooks
- Custom reports and real-time access to standardized reports
- Payroll debit cards for employees
- Well suited for growing companies
|Easy-to-use payroll and HR management||Occasional delayed response from the support team|
|Efficient web clock and time-keeping system to manage remote employees|
|Additional self-service portal for W2s|
|Quick access to payroll reports|
|Dedicated customer support|
CAVU HCM software for a firm with more than 50 employees is available at $10.99 per employee per month. The price is available on request for companies with less than 50 employees looking to onboard CAVU HCM.
Paylocity is an all-in-one human capital management software for HR functions like payroll and compensation management, benefits, talent acquisition, and workforce management. The company acts as an HCM partner for its clients in helping them handle day-to-day tasks while they work on their core functions.
- Real-time reporting and intuitive dashboards
- Suitable for small to enterprise-level businesses.
- Helps to administer payroll functions like time, attendance, sick leaves, etc.
- Manages position descriptions and pay grades for each role
- Allows employees to manage their benefit plans
- Customizes processes to create custom fields, objects, rules, calculations
|Distinct modules for different HR functions help to segregate and ease navigation||Lacks efficient and dedicated customer support|
|Consistent and reliable performance||Complex and overwhelming module configuration|
|Accessible via a mobile device or tablet||Steep learning curve|
|Helps tracks performance using pre-built and customized reports||Insufficient integration with Paylocity’s other services|
|Scalable to suit growing workforce needs and payroll processes as the company grows|
Pricing is available on demand.
Gartner placed Workday HCM the highest in execution on its 2022 Magic Quadrant list for Cloud HCM suites. Some of the biggest names in the corporate world, including Dell, Humana, Gap Inc., Comcast, Adobe, and General Electric, use Workday to manage their HR operations. Workday offers an HCM system based on a single data model to streamline HR processes and improve employee engagement.
- Ideal for mid-size to large organizations
- Optmizes HR processes and delivers seamless workforce management
- Offers strategic workforce planning capabilities
- Integrates pay, performance, learning and development, and training of employees in a single system
- Combines financial, HR, and operational data to provide a unified source of true insights
|Simple and intuitive interface||Not suitable for small and retail businesses|
|Single setup with one login for all HR functions||Limited customization available on reporting function|
|AI-enabled automation across the HR processes||Web version is more difficult to use than the mobile app|
|Real-time employee engagement|
|Secures organization’s data against cyber attacks|
|Augmented analytics allow visibility across vast data sets|
|Compensation and benefits tools for all kinds of workers|
|Best HCM software for large companies|
Pricing available on request. Workday does not offer a free trial period.
#6 Ceridian Dayforce
One of the best and superior human capital management software, Ceridian Dayforce is a master cloud HCM with an expanded feature set and intelligent human capital management strategies. HR administrators can reduce the clutter and concentrate more on the overall vision and expansion to let their staff grow, adapt, and succeed using Ceridan’s capabilities.
- High-level human capital management features
- AI-enabled capabilities for workflow automation
- Real-time payroll, HR, benefits, workforce management, and talent management via a single solution
- Suitable for all kinds of organizations – small to global scale
- Data-driven insights
- Dayforce wallet for employees
- Streamlines HR silos into one centralized, real-time solution
|Easy to use||Scheduling interface is less user-friendly|
|Fully-compliant with payroll and tax rules across regions||Steep learning curve|
|Automated tasks help HR to focus more on growth and strategy|
|Manages entire employee life cycle|
|Empowers employees to choose the right plan and reach their full potential|
Ceridian Dayforce subscription is available at $21 to $29 per employee per month. The vendor also charges an implementation fee of 40-60% of the annual software fee.
#7 iSolved People Cloud
iSolved is another top-ranked HCM software for large organizations. It provides intuitive, people-first HCM technology solutions to over 5 million employees and 145,000 employers across 50 States.
- Intelligently integrates the levels in employee journey – talent acquisition, payroll, benefits, work performance, etc.
- Manages and connects HR workflows
- Effective talent acquisition and onboarding
- Comprehensive payroll with POS integration or Spreadsheet upload
- Labor tracking for time management
- Scalable and configurable HCM software
- Multi-level performance management capabilities
|Less time-consuming and user-friendly||Lacks in dedicated customer support|
|Consistent cloud-hosted solutions allow constant uptime||Less structured updates|
|Affordable||No mobile app|
|Seamless management of entire HR journey|
|Securely stores and shares data|
|Fully-compliant across all processes|
Pricing is available on request.
A Mordor Intelligence report states that the HCM software industry is expected to grow at a CAGR of 6.7% from 2020 to 2026, i.e., witness an expansion from $16.7 billion in 2020 to $24.6 billion in 2026. This is because organizations today are more committed to their human resource strategy.
Rightly so, an HCM solution can be crucial to enable strategic growth and improve employee engagement. A good HCM system can help strategize mundane HR processes into meaningful ways to connect people and workflows across the organization.
FAQs on HCM Software
What is human capital software?
An HCM software offers an integrated suite of technologies to help businesses manage their HR functions from hire to retirement, including recruitment, payroll, benefits, compensation, and performance management.
What are the four core HRM functions?
The four core HRM systems include – (i)recruitment, selection, and onboarding, (ii) rewards and recognition, (iii) performance management, and (iv) learning and development.
Which are the best 3 HCM software?
Rippling, Paylocity, and Workday HCM are said to be the top three HCM software suitable for small to enterprise-level organizations per user reviews and popularity.
Why do companies use HR software?
An HCM or HR software helps to automate and streamline workflows, save time, and provide important insights and reports on employee performance. HCM systems integrate payroll and benefits management, time-tracking, and performance reporting in a single suite of functionalities to bring efficiency and productivity to HR processes.
What is Gartner Magic Quadrant HCM?
Gartner Magic Quadrant HCM is a trusted source for companies to identify vendors to build their cloud HCM strategy. The Quadrant provides great perspectives on how these vendors execute the vision of the companies and add business value to their processes.