What You Need to Know Before Buying HR Software
Choosing the right software for your HR team will help your business to attract better talent while automating key tasks that are ordinarily the responsibility of HR personnel.
Software is the most powerful way of improving the productivity of your HR team. With the right HR technology, your organization can recruit better talent without spending as much time on recruitment processes. It can also streamline day-to-day employee management tasks that HR departments are ordinarily responsible for, such as completing payroll, processing timesheets, and managing employee referrals.
There are hundreds of technology providers available, so you will need to invest significant effort into selecting the software that is an optimal match for your organization. Some software tools can be very expensive, but these costs can yield a return on investment for large organizations that need to attract world-class talent. However, any HR team can significantly boost productivity with the help of modern software.
The Value of HR Software
Software for HR management has become so effective that companies can no longer expect to stay competitive without using it. Effective implementation of HR software can help your organization to identify ideal job candidates better than your competitors. Software can help your HR team to keep employees engaged, so they can be retained longer. Overhead costs associated with managing employees can also be drastically reduced. Overall, software can multiply performance in almost every area that HR teams are responsible for, including:
Lower error rate: Mistakes will often be made when routine HR tasks are done by hand. Unfortunately, errors in HR can lead to unnecessary lawsuits, loss of talent, and even increased exposure to fraud. Automated HR software systems can correctly complete routine tasks every time.
Fewer compliance mistakes: HR technology can help HR teams to ensure that all compliance requirements are met when actions are taken. Most HR professionals are not licensed attorneys, so they often make mistakes when attempting to interpret and apply the law. Software can guide an HR professional through the steps necessary to achieve full compliance and help your team know with greater certainty when legal help is needed.
Better HR administration: In addition to reducing the costs associated with HR administration, an HR software can help your HR team to perform their responsibilities more effectively. Powerful modern software can help to filter out potential job candidates so that your organization can grow by improving the quality of talent that you attract. Software can even help companies to bring in talent through their best employees while improving how existing talent is utilized.
Metrics and analytics: High performance necessitates leveraging available data to discover shortfalls and opportunities for improvement. A good software provider will be able track metrics to provide your HR team with real-time feedback on how effectively their actions are helping to achieve your company’s mission and your HR team’s objectives. You can also use the software to gather and analyze HR data that can be used to improve performance throughout your organization.
Types of Software for HR
Not all software is the same. Many programs are designed for specific HR functions. Some software tools aim to act as full-service solutions, but HR teams almost always end up using multiple programs.
Applicant Tracking System
Applicant tracking systems create and manage databases of talent available to your organization. Leading ATS systems can help your business to find talent by considering people who have been interviewed in the past. An ATS can also help with filtering out people who apply for a role by automatically running background checks and checking applicants against public information.
HR Onboarding Software
Onboarding software helps new hires to understand your company’s culture more effectively in less time. This software can significantly reduce the costs associated with hiring new talent since training costs can be drastically reduced. Software-based onboarding also helps to ensure consistency in training new personnel. Engagement data generated through your onboarding modules can then be analyzed to improve training quality.
Accurately measuring employee performance is ordinarily challenging since the personal biases of managers can significantly impact perceptions of employee performance. Performance management software helps organizations to consistently measure the performance of their employees. More objective performance assessments can increase employee satisfaction and motivation. Performance management software also empowers your business to accurately score the performance of managers. The data provided by performance management software can usually be viewed in real time, so senior executives in your company can easily understand how individual teams are performing and actively implement changes.
Benefits administration software automates the management of employee benefits, such as vacation time, sick leave, and 401(k) plans. Employees can use this software to automatically schedule time off. Your team will then only have to actually meet with an employee who is taking time off when unusual requests are made or when the system flags an action for manual review.
Advantages of Software for Large Businesses
Large businesses have a wide range of stakeholders to manage, so they need software to track all of their relationships. Software can help HR teams in large organizations to keep track of the thousands of people who they interview so that the value of these interactions can be maximized. Large businesses also benefit from software because it offers a scalable way of managing and engaging with an entire workforce. If enough data is collected, large organizations can even use artificial intelligence to improve their interactions with stakeholders.
Advantages of Software for Startups and Small Businesses
Smaller businesses can also derive enormous benefit from software that is designed for HR applications. HR software systems for small businesses can automate many HR roles to reduce overhead. There is also HR software online that small businesses can use to do key HR activities on their own in a matter of minutes.
Features to Look for When Choosing Software
Finding the right HR technology can be a challenging process for businesses of all sizes. It is also crucial to choose a software package that precisely matches your needs. Software tools are designed to serve different purposes, so you will need to identify the software that is right for you.
1. Talent Management
Talent management is a core feature of an HR management system that all organizations should fully utilize. The goal of talent management software is to improve the performance of your existing talent by monitoring the performance of your employees and helping these individuals to develop professionally. Many of the best talent management systems attempt to actively monitor employee satisfaction so that managers or HR professionals can intervene by providing the resources needed to address pain points that employees are experiencing.
A major part of employee satisfaction is compensation management, and talent management systems usually provide advanced insights on how compensation can be adjusted to improve motivation and increase retention. The bottom line is that making full use of a talent management system can help your organization to attract and retain better talent.
2. Time and Attendance Tracking
HR teams are usually responsible for making timesheets and tracking employee attendance. Time and attendance tracking systems can fully automate attendance tracking to increase timesheet accuracy while reducing overhead. Artificial intelligence can also be used to determine when patterns of poor attendance should warrant confronting an employee or a manager.
The data gathered by time and attendance tracking systems can also be easily integrated into performance assessments so that employees can be rewarded for excellent attendance. By tracking attendance accurately, you can identify employees who are not working as hard as your company expects while giving employees a stronger incentive to show up to work on time.
3. Metric Identification
Metric identification is an HR software management feature that helps businesses to determine what metrics drive the performance quality of their HR activities. When your business knows what metrics to monitor, you can get managers focused on improving results in the right areas.
Metric identification usually works by leveraging data collected from throughout your organization and from your HR management system. Advanced analytics tools can then be used to explore collected data in ways that enable senior executives in your organization to decide what metrics managers should focus on. In today’s data-driven economy, metric identification features can help organizations of all sizes to improve the effectiveness of the full range of their HR activities.
4. Live Performance Tracking
One of the best aspects of modern software tools is that they can provide immediate feedback on performance. In the recent past, managers would have to manually evaluate available data on a quarterly basis to make key assessments. Modern software, on the other hand, can provide live feedback that can be used to respond quickly and improve continuously.
When you buy software for HR management, make sure that the software you are considering comes with live performance tracking. Members of your HR team at every level can then use this feature to understand how every action they take impacts overall performance. Your employees can then experiment with solutions, and they can quickly learn what achieves the results your organization needs.
5. Employee Referral Features
In any organization, the employees who you already have are always your best source of new talent. Your best employees usually associate with other people who have similar characteristics, so they usually can connect your company with excellent talent in highly specialized fields. As long as referrers only recommend individuals who they know well, you can be almost certain that a referred candidate will be a perfect match for a new position.
Software for HR management can help your business to encourage people who are likely to know talented individuals to recommend associates who match your hiring criteria. These software tools can send targeted messages to people in similar roles so that they can be aware that your company is looking for new talent.
6. Advanced Candidate Selection
HR management systems have been around for over two decades, but this software initially only offered basic functionality. For instance, older systems can usually scan resumes with OCR and look for relevant keywords. Unfortunately, basic scanning features are not enough to keep your business competitive in today’s world.
Modern software can look deeper at resumes to recognize when major resume mistakes have been made and use external data sources to understand more about a candidate. This software can also help at all stages of the hiring process. For instance, a modern system can help hiring managers to ask the right questions during an interview and to select the right candidate after interviews have been conducted.
7. Payroll Automation
In today’s digital economy, no business should still be doing payroll manually. However, you also should not have to shell out an enormous amount of money on payroll management services. Instead, you can manage payroll in-house with the help of payroll automation software. This software can quickly and accurately calculate deductions while telling you exactly how much money to send to each party, such as an employee, a 401(k) fund, or various governments.
Doing payroll in-house is beneficial because doing so gives you full control over payroll decisions. Using modern payroll software usually takes no more time than sending your payroll data to conventional third-party providers. Therefore, payroll automation is always a feature that you should look for when purchasing software for your HR department.
Factors to Consider Before Making a Final Decision
Since software is so important in HR management, choosing a software package is a major decision that your organization should consider very seriously. Some of the main factors that you should keep in mind before you make a final decision are listed below.
Customization: If you have a large organization, you will usually need the software developer to help your company to integrate your new solution with your existing data systems and other HR programs. Make sure that the software developer is willing to work directly with your company to customize its software specifically for your organization.
Scalability: Businesses of all sizes change rapidly, so the software that you choose should always be able to scale with your company’s most optimistic future outlook. Look for software that supports an unlimited number of seats. A provider should at least offer your company a reasonable fixed price for additional seats so that your contract will accommodate future growth.
Fitness for purpose: The most important factor to consider is whether HR software will achieve your organization’s objectives. Try to find HR software free of gaps that will force your business to use multiple software packages. Deploying multiple software tools at scale can be difficult to maintain and introduce potential security issues.
Cost: Value should always be your main concern when buying software. Nevertheless, cost should still be an issue that your business considers carefully when buying software for your HR department. Also, make sure that you consider HR software management costs. You may need significant assistance from developers or your IT department to deploy software properly, and the costs associated with such technical assistance can lead to cost overruns.
Selecting the Right Software for Your Company
As long as you conduct thorough research before buying software for your HR team, your odds of being satisfied with your investment will be very high. The best path forward, therefore, is to understand what features your organization needs and to consider a wide range of providers. Once you make the right decision, your organization can reap the benefits of your due diligence for years to come with an effective software solution that dramatically improves the performance of your business.
Originally from Brisbane, Australia, Majella completed her studies with a Bachelor of Business majoring in advertising from Queensland's University of Technology. After a few years of working in the gaming and entertainment industry in the APAC market, she moved to Vienna, Austria and joined the Firstbird team as a copywriter in 2016. She has never looked back, and now works across marketing, partnerships and sales in Firstbird’s international team.