What is HR Software and How to Select the Right One?

In a competitive candidate-driven market, businesses need to focus on how the human resource department performs and adds productivity to the overall business. On the other hand, HR teams and professionals understand the pressure and responsibilities that they need to execute to keep up with the growing competition and the need to hunt and acquire the best talent. The role of an HR today isn’t just about getting the interviews done and filling up the empty job positions, but a lot more. According to Gartner reports, HR technology is the top investment area for HR leaders in 2023 and 46% of them plan to increase investment

In simplest terms, talent acquisition teams and the HR department are responsible for managing the employee life cycle which includes recruiting, hiring, training, onboarding, and administering employee benefits, as well as offboarding. Additionally, they also have to update policies, maintain employee records and protect the well-being of the employees. 

All this can be a bit challenging without any technical help. Hence, many HR teams and hiring managers today make use of HR software that automates certain daily tasks and helps HR professionals to be productive and efficient in what they do.Verified Market Research reports that the HR software market was valued at USD 20.51 billion in 2024 and is projected to reach USD 44.28 billion by 2031, with an anticipated CAGR of 10.10% from 2024 to 2031.According to Forbes Advisor, 80% of businesses use HR software, owning to its usefulness for finding and retaining talent, onboarding, and tracking performance.

What is HR Software?

HR software is a digital tool that helps HR professionals to manage and optimize administrative tasks and achieve HR goals for their organization. With the help of this software, HR professionals and staff can allocate their time and resources to more productive and profitable efforts. 

Historically, HR software has been used since the 1970s.  By the 1980s, they became more common and today many companies make use of the software to manage their HR tasks and projects. 

Today, with the advent of new technology, most HR programs and systems are cloud-based and subscription-based and they can easily integrate with local data management programs making it easier for the HR staff and managers to optimize their time and achieve their targets and goals without a lot of fuss. 

What Can HR Software Help You With?

We live in a world where information is the key to better employee experience and improving HR service delivery functions. Using HR software can make things easier as HR staff and managers can accumulate and use collated data to make the right choices and decisions to improve their processes, complete tasks, and achieve company-related goals. 

HR software can provide you with multiple core HR features and benefits. Hence, you must look for HR programs and systems that allow you to manage more activities within the department. 

#1 Store Employee Information Securely

Data is the most important thing in the world we live in, especially when it comes to business. Like any other department, HR staff and managers also have to store all the employee data and information that they would need to access as and when required. With the right HR software, you can do that efficiently and without losing time. Most HR software is cloud-based and therefore the information is securely stored on the cloud server helping you to retrieve the data whenever you want it.

#2 Create HR Workflow

HR professionals often have to go through the repetitive tasks of attracting, assessing, and acquiring talent for the company. This can get monotonous and time-consuming. However, with the help of HR software, you can speed up the process and create an HR workflow that allows you to automate some of the predictive tasks within the HR process. Creating this workflow doesn’t require any coding. In most cases, HR staff can use drag-and-drop wizards to create a workflow.

#3 Track Approvals

Like any other department in the company, HR managers and professionals have to work in sync with other departments. Hence, they need to send requests and track approvals to ensure that they can work efficiently. With the help of HR software, HR staff can keep track of all the approvals that are pending within the company. 

#4 Employee Self-Service Time Tracking 

HR staff also has to focus on recording attendance and application for leaves and so on. With the right HR software, you can automate all the processes and ensure that all the employees can keep track of their time. Also, you can avoid time-tracking fraud as various self-service time-tracking systems add another layer of security and send notifications and alerts when timelines are not matching. 

#5 Tracking Employee Training

Training employees is essential for the company and HR staff has to ensure that the training process is on-time and continuous. HR software can make things easier for the HR staff to keep track of the employee training process and make sure that the training is done in compliance with the company rules and regulations. 

#6 Gauge Employee Satisfaction

Employee engagement and satisfaction are critical to retaining talent within the company.. Hence, HR professionals have to focus on how they can improve employee experience and satisfaction. HR software comes with various tools and must-have features that help HR teams to gauge and find out more about employee satisfaction. 

#7 HR Performance and Goal Tracking

Companies today expect HR teams and managers to perform. However, with so much to handle things can get out of control. With HR software, HR teams and managers can keep track of their performance and goals while handling other priorities. 

#8 Benefits Administration and Management 

It is the HR department that has to manage employee benefits and with the help of HR software HR executives can administer and manage all of this. HR teams have to design and manage employee benefits and have to track all the details. The cost of providing health care coverage to employees is one of the top challenges. With HR software, HR managers can automate calculations of benefits eligibility and let employees choose coverage. Also, the HR software can integrate all these benefits with payroll to deduct the right amount from the employee’s paycheck.

#9 Pre-boarding and On-boarding Automation

When it comes to hiring, HR teams have to keep track of pre-boarding and onboarding activities. Also, they have to track and maintain the process to ensure better employee retention and satisfaction. Streamlining the employee onboarding process with HR automation can boost the new hire retention rate and refine the hiring process.The software can also help you impress new hires and send offer letters and welcome emails and much more. This can help you to eliminate redundant documentation and paperwork and allocate more time to answer queries from new hires and gather relevant data.

#10 Third-Party Application Integrations

Different businesses make use of different applications for managing their daily business work. With the right HR software, HR staff can integrate the software with the third-party applications and programs that they use to store and collect information. This can make the process easier and quick as they don’t have to manually transfer all data. HR software can help with integrating information related to payroll, recruitment and boarding process, attendance and scheduling, employee benefits, health and safety, employee and talent management, and background checks. 

#11 Monitoring Data Changes

Updating employee information and keeping track of activities within the company can be challenging. With HR software, HR staff can keep track of all the information changes that are made later on. The software is integrated with various systems within the company allowing the changes to happen on all connected programs and systems automatically. This also helps HR to audit all the new information and verify it as well. With a constant data monitoring option you can minimize errors in your workflow.

#12 Creating Reports for Insights

Strategic and operational reports are invaluable tools to boost your business. With the right data and reports, organizations can get insights on how they can make decisions to find the right path to increase productivity and acquire and retain the best talent. The software can help with administration reports, compensation reports, recruitment reports, onboarding, and pre-boarding reports, performance management reports, and many others.

Also read: 5 Recruiting Reports Every Manager Should be Running

Types of HR Software

Using the right software can make all the difference when you are handling an HR job. Hence, you need to look out for the best systems and programs that can help manage applicant tracking, employee engagement, onboarding process, and performance-related issues.

Here are 5 types of HR software that you can find to manage your HR process and workflow.

#1 Applicant Tracking System

Popularly known as ATS, Applicant Tracking System is a great digital solution that can help you streamline the recruitment process. With the right applicant tracking system, HR staff can manage posting job openings on various online platforms and even different social media accounts. Also, the software can help with screening applicants based on the set criteria and store applicant data when needed in the future.

#2 Human Resource Information Systems

When it comes to data management, having an HRIS can make it easier for the HR teams and staff to manage to recruit, and track applicants. This can be standalone software that can work in sync with other HR programs and integrate with other systems like Google Calendar and Microsoft Outlook. Having an HRIS or Human Resource Information System can help you manage payroll, and maintain regulatory and legal compliance and requirements

#3 Onboarding Software

HR teams also have to focus on how they can improve the onboarding process which can lead to a better candidate experience. Onboarding software can help HR staff with pre-boarding packages, electronic signatures of documents, setting up employee questionnaires and surveys, and tracking training activities. Good onboarding software can help new hires to know more about the company, form connections, and smoothly complete all the paperwork.

#4 Employee Engagement

HR teams also require HR programs and software that can help with team engagement, coaching, and analytics.

#5Performance Management

You can also find a human resource management system (HRMS) and software to evaluate employee skills, performance, and goals and track improvement. With better employee evaluation it becomes easier for the company to identify top performers from employees that need additional help.

How to Select HR Software?

With plenty of HR software available, you need to focus on how you can invest in the right HR software that works for your business. 

#1 Know What You Want

With plenty of HR software options things can get confusing and overwhelming. However, you need to put your needs first and decide what you expect from the software. Take time to understand your organization’s requirements and write down all the details to have a clear picture.

Ask questions like:

• What are the shortcomings of your existing HR software?
• What challenges does the HR team face currently and why?
• How can you provide a better employee experience?
• What are the most common HR-related complaints?
• How can you streamline certain HR processes?
• Is your HR team tech-savvy?
• How much can you invest in new HR software?

#2 Evaluate Top Vendors

Once you have listed all the core points and factors to get a clear picture you need to start looking for the top vendors that can provide you with the right HR software. Research the company and the software they develop. You can also read reviews and ratings about those programs to help you understand the quality of their previous software solutions. You can read blogs and case studies that tell more about the software’s ROI. Look for sites that compare different HR software and find out if there is a demo or free trial available.

#3 Shortlist Few Programs

Once you are done with the reviews you need to shortlist some of the HR software that matches your requirements. This would allow you to make the most of the options you have. To begin with, you can talk to your fellow HR personnel and team and get their opinions and know what they think is the best choice. You can schedule a call with their sales personnel and ask questions you have.

#4 Opt for Free Trials and Demos

If you have the liberty to try some of the HR software for free you should try them first. This would provide you with the opportunity to play around and know their user interface and implement all the tests that you want to do on a small scale. If you feel the software has all it takes you can go ahead and buy the subscription.

#5 Implement and Training

Implementing and integrating the software into your current business system can be tricky. Hence, you need to do that the right way and ensure that HR and other employees are confident and comfortable using the software. For this, you need to communicate effectively to all in the company that you will be switching to a new HR software and how it will positively affect the company and employees at large. Invite questions from employees and answer them thoroughly. 

Conclusion

The process of selecting HR software is as critical as the HR software itself. Hence, you need to ensure that you make the right choices even before you go ahead with the purchase decision. Today, HR software has become an integral and indispensable part of the HR process allowing HR staff and managers to handle workforce management, talent management, employee engagement, and benefits administration and automate various HR service delivery functions. 

FAQs on HR Software