Technology is changing the way companies hire and manage personnel. It has simplified the entire HR process, from resume screening to employee offboarding, allowing HR professionals to focus on human-centric activities.
In this article, we’ll explore the varied types and trends of HR Software, essential factors for selection, implementation guidelines, and best practices for the optimal use of your chosen platform.
TL;DR
- HR software simplifies various HR processes like recruitment, onboarding, payroll, performance management, and benefits administration.
- HR software can be cloud-based or on-premise, often offering integrated functions.
- An HR platform should be able to integrate with other apps, be easy to use, offer customization options, fit a company’s budget, and have a good reputation for customer service.
What is HR Software?
Human Resources (HR) software refers to a suite of digital solutions that help simplify HR tasks such as recruitment, onboarding/offboarding, employee scheduling, performance management, training, payroll processing, and benefits administration.
By taking away the repetitive and tedious tasks in these employee management processes, HR professionals are able to devote more time to workforce planning, performance coaching, and talent management.
HR software comes in different shapes and sizes. Some are on-premise. Some are cloud-based. They can also be categorized based on their core HR capabilities. However, many of them are integrated platforms that can perform a variety of functions.
The Different Types of HR Software
Recruiting and Applicant Tracking Systems (ATS)
HR teams receive a high volume of applicants, averaging 118 candidates for every job position. Recruiting and ATS software tools can optimize the entire recruitment process and increase pipeline efficiency.
Many of these tools handle repetitive tasks involved in job posting, reviewing candidate applications, resume screening, interview scheduling, and correspondence.
Large and mid-sized businesses need an advanced and scalable ATS, such as Greenhouse and Jobvite. These tools offer HR features such as automated workflows, candidate relationship management, and bias blockers.
Employee onboarding solutions
An effective onboarding process elicits 18x more workplace commitment from employees compared to those who’ve gone through less effective onboarding. It goes to show that a smooth onboarding experience is vital to employee engagement.
Employee onboarding software helps new hires integrate smoothly into an organization. It provides them with information, training materials, system access–everything they could need to settle into the job.
As for the HR team, it minimizes administrative work and makes pre-start date communication easier. For instance, the onboarding and offboarding tool, BambooHR, has a built-in electronic signature that tracks signatures. Therefore, new employees don’t have to fill out mountains of paperwork on their first day. Added bonus: It also offers templates for new hire packets.
Performance management tools
Providing meaningful feedback should be done at least a few times a week, according to Gallup. And feedback should be given immediately after the action.
To keep up with the suggested tempo, HR staff need performance management tool features to track employee output, set goals for them, review their progress, and provide feedback.
Tools like Leapsome and Lattice, facilitate team and individual performance reviews, identify opportunities for improvement, and give credit when and where it is due.
Payroll systems
Two payroll errors—that’s all it takes to prod an employee to seek employment elsewhere. Meanwhile, the US Internal Revenue Service assessed nearly $23.8 billion in additional penalties for late filings.
To prevent the chaos originating from blending a complex process with manual operations, HR teams rely on automated payroll systems.
Payroll software, such as Gusto and Rippling, assists employers in calculating and distributing salaries, taxes, deductions, and employee benefits, as well as complying with tax regulations. Tools, like Gusto, aso feature attendance tracking modules. Paid time off (PTO), sick days, and other leaves are automatically accounted for during payroll processing.
Your HR platform should also integrate with your payment platforms. Through integration, payroll information, deductions, and tax details are automatically transferred from the HR system to the payment platform. It ensures accuracy and timely payment to employees and reduces the potential for errors.
Benefits administration
Surveyed employees have recently expressed lower benefits satisfaction, characterized by a 2% decline in 2023. It’s the lowest it has ever been in a decade. Yet, 83% of employers claim their employees are satisfied with their benefits. Benefits administration software can help close the disconnect.
Benefits management tools promote compliance with government regulations. They also streamline program enrollment, track employee eligibility, process payroll deductions, and more. For instance, Rippling also provides third-party broker support. Some tools, such as ADP Workforce, analyze which benefits your employees value most, so you can cut costs by focusing on those.
Learning and development platforms
89% of L&D professionals believe that proactively preparing employees for today and tomorrow is vital to navigating work in the future. As such, learning and developmental tools play a crucial role in creating a competitive workforce in today’s dynamic environment.
Human capital development tools bolster employee skills and keep them abreast of industry trends. These tools also help companies align employee performance with their short- and long-term goals.
Learning and development platforms often include key features, such as course libraries, certification tracking, and progress monitoring. Various types exist, such as learning management software, learning experience platforms, course authoring tools, virtual training tools, and more.
Reporting and analytics tools
Employers can use HR data to measure employee life cycles, hiring success, staff turnover, diversity in the workplace, and so much more. Data-gathering tools include the Human Resources Information system (HRIS) and Human Resource Management System (HRMS)—both track and maintain relevant employee data.
A human resources software tool can provide real-time reports about key metrics such as demographic data, turnover rates, training effectiveness, and compensation analysis. Pairing your data with analytics creates clear narratives, promoting data-driven decision-making.
Latest Trends in HR Technology
The rise of artificial intelligence (AI) and automation
In a 2022 survey, at least 92% of HR leaders intend to increase AI adoption. It has transformed various HR functions, including recruitment, candidate screening, onboarding, performance management, employee monitoring, and payroll and benefits processing.
For example, automation simplifies tedious routine tasks, predictive hiring predicts an employee’s future performance in a given role and data analytics aid workforce planning.
Better employee experience platforms
Engaged employees lead to 81% fewer absences and 14% more productivity. HR departments seeing the value have begun shifting their focus from development to engagement programs. The focus on engagement and productivity has gone up by 15% in 2022, while interest in development programs went down by 18%.
Using employee experience platforms, an organization can manage various aspects of their employees’ journeys. Many of these tools feature feedback and praise collection, engagement surveys, milestone celebrations, and more.
More remote work solutions
COVID-19 accelerated the adoption of remote work, and it’s here to stay. Tools for collaborative work, project management, video conferencing, and time tracking have become essential for remote or hybrid working environments.
Among companies surveyed, only 3% aren’t planning to implement software to improve remote work management. Meanwhile, 37% of companies have already done so, with 57% in the process of developing a plan or already have one in place.
Increased data security and compliance
Feeding sensitive employee records, including contact information and salaries, into a system has its risks. If someone misuses the information, it can put your employees and business at risk. HR software platforms are incorporating more robust measures, such as data encryption and secure cloud storage, to support companies handling employee data digitally.
Higher diversity and inclusion goals
Gartner predicted 75% of organizations with diverse and inclusive decision-making teams would surpass their financial goals. Moreover, creating an inclusive environment promotes employee well-being, which in turn, positively impacts retention.
Recruitment and employee evaluation software innovations remove biases in the hiring process and performance appraisals. HR tech tools also support tracking and promoting DEI metrics to remove blind spots related to promotion, pay, benefits, etc, and drive positive change.
Factors to Consider When Choosing HR Software
The best HR software solution can enhance an organization’s workforce management efficiency and effectiveness. When choosing one, consider the following factors:
Company size and needs
Knowing your organization’s requirements will help you narrow down your selection. Small businesses would want to focus on a tool that covers key HR functions and enables them to make the most of their limited resources. But medium-sized and larger organizations prioritize a tool’s scalability and ability to perform complex processes.
Software integration capabilities
Siloed systems can slow you down. Fortunately, integrations break down these data silos allowing your data to flow from one platform to another. They’re essential for enhanced data accuracy, flexibility, and efficient workflows. Some vendors can build APIs manually to connect your platforms. But we recommend introducing an HR platform readily compatible with your current business infrastructure.
Ease of use
Complicated software makes adoption difficult for your HR team. A well-designed and well-supported HR solution is essential to their user experience. Some features to look out for are user-friendly interfaces, an employee self-service portal, mobile app access, workflow automations, and clear tutorials and job aids.
Customization options
Since HR workflows aren’t universal, your HR software should be able to adapt to your existing processes. Customizable solutions match your specific needs. But if you need a more standardized functionality with some flexibility, a configurable tool makes the most sense.
Budget and pricing models
HR software tools follow different pricing models: monthly or annual subscriptions, per-user charges, or one-time licensing fees. Long-term and short-term, which one fits your company best? Assess your organization’s budget and financial needs to decide which pricing model is right for it.
Vendor reputation and support
Examining vendors’ reputations gives you a sneak peek at their reliability, platform usability, longevity, security, and support.
Speaking of support, look into providers with dedicated customer success teams and specialists so your HR department has peace of mind that they’ll get support during tricky times.
Implementing HR Software in Your Organization
Introducing HR software into your business requires following these key steps. Keep in mind, however, that this isn’t an exhaustive guide.
Assess the current HR workflow
Assessment will help you tailor the implementation to your specific needs. Poring over your people management processes can help reveal your HR team’s current pain points and inefficiencies. These gaps can indicate which HR software and features can perk up your overall accuracy and performance.
Set goals and expectations
Bringing into mind your current workflow situation, it’s more feasible to set SMART objectives for the implementation process. Identify the most important functions you’re looking for from the new addition to your tech stack. It’s also the perfect time to set a project timeline, define your budget, and delegate tasks.
Select the right vendor
This is where everything comes to a partial conclusion. The first two steps help you work out what you need in a tool. But aside from features, you’ll have to check other factors, such as scalability, integration capabilities, and vendor reputation. Take your time to research and evaluate HR software vendors. Request product demos or free trials if necessary.
Train your HR team and employees
Provide comprehensive system training and onboarding support to your HR team and everyone who will be using it. Your HR vendor can support you on this, by sharing relevant documentation and training sessions. Make sure the training isn’t one-size-fits-all. Every employee should receive material and support tailored to their tool use. Last but not least, identify a point of contact for employees to ask questions and receive support throughout the implementation phase.
Monitor and evaluate success
It’s best to implement HR systems in stages, evaluating each one as you go. Phased implementation gives you time to tweak and test the system. Additionally, your HR team won’t have to digest everything all at once. Keeping an eye on operational efficiency even after rollout should be a priority.
Best Practices for Utilizing HR Software
Learn how to make full use of your system after implementation. These best practices will help ensure your HR tech solutions evolve along with your organization’s goals and culture:
Perform regular updates and maintenance
Maintaining HR software upkeep requires installing the latest updates, patches, and upgrades provided by your vendor. Note: Customized software will need more support and extra measures, including backups and recovery plans.
Regular software maintenance ensures your tool is up-to-date, secure, and aligned with your evolving business demands. Keep your IT team or software provider informed of any issues as soon as possible.
Ensure employee data privacy
Keeping employee information private is crucial. Ensure your HR software complies with local laws, GDPR, and HIPAA.
Updates and patches also boost data protection. As an extra precaution, you can implement measures, such as strict access controls and user authentication. It’s also important to teach employees about the value of using complex passwords and changing them on a regular basis through data security awareness and training.
Engage employees and use feedback to improve infrastructure
Talk to HR professionals and employees using the tool, and listen to their feedback about its usability, functionality, and impact on HR processes. Their insights will help determine what enhancements or updates need to be made.
You can also measure the effectiveness of employee engagement initiatives and use feedback to rectify shortcomings. See what add-ons are available to help you. For example, internal social networks, employee recognition platforms, and assessment tools to support a positive, productive, and engaged working environment.
Final Words
Human resource software enhances productivity and reduces administrative burdens. It simplifies recruitment and applicant tracking while fostering a learning culture and ensuring a satisfied, financially secure workforce.
Start by introducing an HR solution that works well with your payment platform. You’re in luck: Stax integrates with leading HR platforms. Contact us to learn how we can help create a positive work environment for your employees.
FAQs about HR Software
Q: What is HR Software?
Human Resources (HR) software is a suite of digital tools designed to streamline various HR tasks. These tasks include recruitment, onboarding/offboarding, employee scheduling, performance management, training, payroll processing, and benefits administration. The software enables HR professionals to focus more on human-centric activities by removing repetitive duties.
Q: What are the different types of HR Software?
HR Software can be categorized based on its core functionalities. Some of the common types include Recruiting and Applicant Tracking Systems (ATS), Employee Onboarding Solutions, Performance Management Tools, Payroll Systems, Benefits Administration Tools, Learning and Development Platforms, and Reporting and Analytics Tools.
Q: How is artificial intelligence (AI) impacting HR Technology?
AI has transformed various HR functions such as recruitment, candidate screening, onboarding, performance management, employee monitoring, payroll and benefits processing. For example, automation simplifies tedious routine tasks, predictive hiring predicts an employee’s future performance in a given role and data analytics aid in workforce planning.
Q: What are the factors to consider when choosing HR Software?
Some of the key considerations while choosing HR software include the company’s size and needs, software integration capabilities, ease of use, customization options, budget and pricing models, and vendor reputation and support. The chosen HR Software should be in line with an organization’s workforce management efficiency and effectiveness.
Q: What are the steps involved in implementing HR Software in an organization?
Implementing HR software involves a series of steps starting from assessing the current HR workflow and setting goals. Then it requires selecting the right vendor, training your HR team and employees, and continuously monitoring and evaluating the system’s success.
Q: What are some best practices for utilizing HR Software?
Some of the best practices for using HR software are performing regular updates and maintenance, ensuring data privacy, seeking constant feedback from employees to improve infrastructure, and aligning the usage of software with the organization’s overall goals and culture.
Q: How does HR software enhance productivity in an organization?
HR software simplifies numerous HR processes like recruitment, onboarding, payroll, and performance management. It helps in fostering a learning culture, ensuring a comfortable working environment for employees, reducing administrative burdens, and thereby enhancing overall productivity.
Q: What are the latest trends in HR Technology?
Key trends in HR technology include the rise of artificial intelligence and automation, increased focus on employee experience platforms, widespread adoption of remote work solutions, heightened attention to data security and compliance, and higher diversity and inclusion goals.
Q: Why is ease of use important when choosing HR Software?
Ease of use is important because complex software may be difficult for your HR team to adopt. A well-designed, user-friendly HR solution supports an outstanding user experience, fostering improved efficiency and productivity.
Q: What is the role of HR software in data security and compliance?
HR software platforms are now incorporating robust measures such as data encryption and secure cloud storage to support companies handling employee data digitally. This ensures strict adherence to data security norms and compliance with regulations.
