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Human Resources (HR) Software

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Buyer's Guide

There are currently more than 230 human resources (HR) software systems available today, and the market is growing. HR software companies offer a range of solutions, from best-of-breed point solutions to functionally broad, integrated suites. With these tools, organizations can offer employees more HR services and manage them more effectively. Finding the right software for your organization is essential to implementing and executing a transition from the old to the new, and your time is valuable, and there are many human resources software reviews out there. So, we've written this buyer's guide to assist you in your search for top human resources solution.

Here’s what we’ll cover:

What Is Human Resources Software?
Application Categories
What Type of Buyer Are You?

Market Trends You Should Understand
Benefits & Potential Issues

What is HR Software?

Industry watchers have broken HR Software down into two main categories:

Core HR encompasses the traditional HR functions (i.e. personnel tracking, payroll, and benefits administration); and,
Strategic HR encompasses evolving HR functions and concepts (i.e. talent management, learning management, and workforce management).

Of course, core and strategic HR often overlap. While there are best-of-breed solutions for individual functions in either category, there are also integrated suites boasting across-the-board functionality and automation. Offering solutions in both core and strategic human resources, such suites are categorized as human capital management (HCM) systems.

The HR software market is growing, and the emergence of new strategic HR software companies has pushed all vendors to increase the pace of innovation. One major change in HR software has been the move toward cloud computing. Cloud computing, also known as Software as a Service (SaaS), is a model where the application is accessed through a web browser and hosted by the software vendor. The web-based nature of SaaS systems allows more users to access HR systems and mobile HR applications.

With this model, managers can automate their processes for hiring, review performance, and schedule their workforce from virtually anywhere there’s an Internet connection. Employees can update their records, request vacation time, view pay stubs, and access their benefits easily as well. Traditionally, these activities were more limited to the HR department, where a much smaller set of employees had access to older client/server systems.

Application Categories

Core HR
Human resources information systems	Offers a centralized location for employee information with advanced personnel tracking and OFCCP compliance tracking. This module is typically the hub of HR software with additional applications for payroll, talent management, and compensation management integrating easily with it. Example vendors include: Sage Abra HRMS, Ascentis HR, and Lawson Talent Management.
Payroll	These applications track employee salaries, bonuses, contributions to 401(k), health savings and other savings plans, as well as withholding for taxes and insurance policies. They provide integration for direct deposit payments as well. Example vendors include: ADP, Halogen, and Vista HRMS.
Benefits administration	Manages benefits offered by the enterprise to employees, ranging from paid time off, medical/dental/life insurance policies, and 401(k) participation to non-standard benefits such as paid employee parking and fitness center memberships. Example vendors include: Omniprise, Infinity HR, and Epicor.
Strategic HR
Talent management	Helps HR managers in the acquisition of new hires and development of employees. Features include online applications, candidate tracking, real-time performance documentation, and employee self-service. Example vendors include: Lawson HCM, Taleo, and aQayo.
Applicant tracking	Provides a centralized database to allow recruiters to store applicants' information and applications for employment. Features include online applications, candidate tracking, applicant status monitoring, and direct integration with other HR applications. Example vendors include: myStaffingPro, PCRecruiter, and HRsmart Applicant Tracking.
Employee evaluation	Offers centralized system for managers to conduct and track reviews with employees. Features performance measuring, tracking, and reporting to monitor trends over time. Allows for performance measures, such as employees' improvement or regression with respect to their goals. Example vendors include: iCIMS Talent Platform, Sonar6, and Plateau.
Learning management	Manages centralized hub to monitor training of new employees as well as the ongoing training of existing ones. Features include documentation management, monitoring, and reporting on training programs. Most systems will also offer self-service capabilities for employees. Example vendors include: Inquisiq R3, SuccessFactors, Digital Chalk.
Workforce management	Automates the full spectrum of processes required to effectively schedule and manage your workforce, including tracking time and attendance. Features include employee self-service interface, clock-in/clock-out functions, and real-time attendance reports. Example vendors include: TimeForce, Omniprise, and Ascent Workzone.
Time & attendance	Helps managers efficiently track employee attendance and absences and enables employees to clock in and out. Rules-based engines provide alerts when employees miss or perform established amounts of work. These systems typically offer integration with other HR modules, including payroll. Example vendors include: TimeForce, Acumen Data Systems, and Kronos Workforce Management.
Employee scheduling	Provide straightforward functionality for scheduling employee shifts and attendance to ensure compliance with staffing needs. Systems can schedule employees across departments, locations, and projects, and provide alerts to employees when schedules change and to managers when staffing levels are inadequate. Example vendors include: WFM Wisdom, adiOffice, Ascent Workzone.

What Type of Buyer Are You?

Before evaluating examples of HR software, you'll need to determine what kind of buyer you are. We believe over 90% of buyers in this market fall into one of these categories:

Enterprise Buyers. These buyers invested in an all-inclusive enterprise resource planning (ERP) package years ago. Over the years, their organizations have grown but their ERP is now a bit dated making it hard to access the exact scope and functionality they need to execute their day-to-day tasks. Given time and budget constraints, these enterprises may not be ready for a complete ERP overhaul. But they definitely need an update to ensure they have the right HR tools in place to keep pace with a changing environment. These buyers are usually better served by checking with their ERP vendor for HR software, as they often offer top-of-the-line integrated suite solutions.
Core HR Buyers. These buyers are typically interested in streamlining their most basic of HR functions. They are often looking for better record-keeping, more efficient payroll, and adopting a user-friendly self-service system for employee benefits. Streamlining these processes is key, and adopting a complete solution that offers more functionality and increases efficiency would be ideal. That’s why straightforward integrated HR management suites are usually the best option.
Talent Management Buyers. These buyers are focused on building and developing their talent base. They are interested in programs offering their recruiting team the best and most efficient methods for posting jobs, tracking candidates, and on-boarding new employees. They are also looking for programs that will allow HR to easily track training and development for employees, while streamlining the review process for managers with multiple employees and varying goals. Best-of-breed providers offer great solutions for these buyers, delivering high functionality with the right blend of features needed to tend to the many facets of HR programs.
Workforce Management Buyers. These buyers are faced with the task of staffing a daily operation and need better tools to manage their workforce. Workforce buyers, such as those in retail or health care, typically have multiple shifts to assign, time-off requests to approve, and massive payrolls to run. Therefore, they need more efficient solutions that empower their managers to make the most effective decisions for the operation. These buyers are interested in best-of-breed providers, and given that SaaS is Web-based, it’s often a good solution for managers with teams in various locations.

Market Trends You Should Understand

As you evaluate HR software, it is important that you understand the current trends in this industry:

Consolidation: Recently, HR software companies have focused on developing integrated suites that allow you to manage an employee’s entire life-cycle within your organization. From recruiting to on-boarding to training and assessment, the trend has been to offer a single software solution for your HR needs. As such, many best-of-breed providers have been acquired by larger vendors looking to extend the breadth of their integrated suite solutions. For buyers, this offers the opportunity to tap into larger resources, but this can also lead to disruptions as acquired companies are integrated and product offerings are rationalized. In anticipation, buyers should lock in rates and service/maintenance terms in their contract as this can save them a headache down the line.
Software as a Service: With adoption of SaaS on the rise, cost-effective, feature-rich HR solutions are easier to implement than ever. SaaS provides a user-friendly, Internet-based option for adding new functionality and accessibility to your employees. Self-service capabilities allow managers and employees alike to utilize the software. Although the best-of-breed SaaS options offer best practices and allow for configuration to meet your needs, it's important to note that specific customization options can be limited.
Enterprise Resource Planning and Human Capital Management: Having the right human capital management (HCM) software is a key component of any ERP. Although HR systems have traditionally been transactional in nature, the recent evolution of strategic HR has inspired greater functionality in HCM software. You may have invested heavily in your ERP system, but ERP software offerings are sometimes hard pressed to keep up with the developments in HCM. As such, be objective as you weigh your options and decide how to develop your HR services, and investigate a few best-of-breed systems before making a decision. Find the option that will effectively compliment and support your growth plan today and in the years to come.

Benefits & Potential Issues

Streamlining personnel tracking, payroll, and benefits administration, and centralizing acquisition, development, and retention efforts are all key to harnessing your most valuable resource: your people. Integrating core HR functions and strategic HR processes will allow you to focus your resources on more valuable labor, saving you time and money and allowing your company to flourish. Don’t assume it’s all or nothing, however. The vast majority of companies do not need a complete overhaul of their HCM. To avoid overspending or overshooting your needs, focus on the processes that will most benefit your organization and the features that can help streamline your core HR functions.