Sometimes, businesses lack efficiency, flexibility and accountability in their processes. This results in delays, high costs and low productivity. In such cases, it’s easy for your employees to be dissatisfied with your business practices. Coupled with low engagement levels, this trend can be detrimental to the business.
This is why businesses should digitize their processes. With automation and smart machines, businesses can be more efficient. This will help employees be more productive and motivated, and you can turn this increased worker satisfaction into higher retention numbers through human resource management software.
In this article, we’ll show you the essential features of HR software that will help you be more efficient and improve your employees’ engagement levels.
This report is exclusively based on top-performing products in the FrontRunners for HRIS Management. However, in this article, we have researched further into the features of these HR systems and categorized them into two specific groups:
- Essential-for-All Features: These are key and indispensable functionalities that small and midsize businesses (SMBs) must look for in an HR system.
- Essential-for-Some Features: These functionalities become important as your business’s needs and revenue grow over time. That’s why it’s good to have at least one of these features in your HR system.
Here’s a graphical representation of all the important HR features:
Here’s what we’ll cover:
Essential-for-All HR Features
Essential-for-Some HR Features
What Solution Do I Choose?
Additional Resources
Essential-for-All HR Features
The basis of most HR software, these must-have features address basic employment management needs—storing employee information, organizing their benefits programs and mining insights from employee data. When your HR staff uses these features, the benefits trickle down to other employees, who can then better understand HR policies and procedures.
Personnel Tracking
Also known as personnel management, this feature centralizes employee information, such as their SSNs, contact information, previous employment details and demographic data. It helps businesses track work hours and employees’ physical locations (to track remote salespeople, for example). Managers can set timelines, plan for absentees, anticipate delays and re-assign resources to more immediate tasks.
Benefits Administration
This feature helps manage your company’s various benefits programs, such as paid time off, medical, dental and life insurance policies and 401k. It helps keep track of all your current vendors and existing plans. It also allows you to monitor expenses of these plans and understand which plans are preferred by your employees.
For example, if your company switches its dental coverage provider, the system could automatically transfer employee information to the new vendor database. You wouldn’t have to manually copy or re-enter all the information.
Reporting
HR collects and manages a lot of data, and reporting helps identify trends and action points within this data. For example, analyzing current employee types and skills can help you define your future hiring requirements. Similarly, the HR team can identify the root of common issues and use the software to identify the right resolution strategy.
Based on Gartner’s “Market Guide for HCM Suite Applications” report (content available to Gartner clients), numerous chief HR officers and HR IT leaders prefer getting these core HR capabilities as a suite from a single vendor. This ensures seamless data transfer and ease of use for your employees.
However, some solutions offer an open API, which makes it easy to integrate with other software solutions. If you’re following a build-as-you-grow model, this approach may be preferable to you.
TOP PRODUCTS: Based on their value scores in the FrontRunners matrix, the top-rated products offering these features are UltiPro, Dayforce HCM, BambooHR and Cornerstone OnDemand.
Essential-for-Some HR Features
The Software Advice Buyer’s Guide for HR software categorizes the following features into workforce management and strategic HR. They tend to be add-on features that you can adopt as your business grows.
Employee Management
This feature involves managing employee workload and compensation. Many companies manage compensation manually, but, it’s hard to do that when you factor in benefits, taxes, overtime and PTO. Also, manually calculating compensation for hourly or contract employees can be difficult.
When your employee size or benefits needs increase, payroll software integrated with the benefits administration feature can reduce the complexity. You can also integrate payroll with the employee scheduling feature in personnel tracking to calculate PTO and overtime.
This feature can also help calculate the withholding for tax and create paychecks. While payroll can be outsourced, software makes it easy to manage in-house, thus saving you additional costs.
Recruiting
This feature uses a centralized database for candidate information. Recruiters and managers refer to and update this database throughout the application process to make notes. It automates the time- and labor-intensive processes of job posting, resume browsing, candidate shortlisting, interviewing and tests, scheduling and even onboarding.
Searching for the right candidates is burdensome if you do it one resume at a time. Software makes the whole process efficient, cost effective and easy to use for both HR and managers.
Benefits Management
The easiest way to manage benefits is by letting employees choose their preferences—via a self-service portal. As we’ve noted before, companies commonly use self-service portals to help employees select insurance options and check allotted PTO. These portals can enhance employee satisfaction in your organization.
Gartner’s “Why You Need to Rethink Your Customer Self-Service Strategy” report (content available to Gartner clients) recommends that organizations should strive to offer self-service portals, which both better serve customers and save costs. You can also save your HR department’s time with self-service portals by using automated query resolution and a ticket system to resolve basic employee queries.
Learning and Development (L&D)
This category includes a wide gamut of features that link learning to performance review so that employees are encouraged to grow and are consistently provided the right resources. Learning management solutions (LMS) are essential to impart training across the organization in a uniform and organized manner.
Gartner’s “Overview on How to Plan, Recruit, Develop and Retain a Skilled Workforce in the GCC Region” report (content available to Gartner clients) found that the top reason for retention among IT professionals was a formal career development program. Such a program reduces the chance that your best talent will get poached.
Most useful for: Businesses that constantly require employees to be certified as per market standards, such as in aviation and food preparation.
However, some small businesses may not be able to afford a system due to lack of budget. In that case, you can consider MOOCs (massive open online courses).
Some level of LMS is essential for all organizations. You should tie learning management to the evaluation process. This way, your employees and managers know exactly what areas to improve and what resources can help them do that.
TOP PRODUCTS: Based on their functionality breadth scores, some solutions you can consider are Namely, Workday, ADP Vantage HCM and SAP SuccessFactors.
What Solution Do I Choose?
While we’ve listed some of the most popular HR features and the possible benefits you can gain, your business likely has its own specific needs.
To get more guidance about where your business needs lie, give us a call at (844) 675-2849 for a free consultation with a software adviser.
Additionally, you can download a checklist of the above features to quickly understand if a vendor you’re considering offers these functionalities in their HR solution.
- Download the checklist and send it to all vendors whose HR systems you are considering purchasing.
- Ask the vendors to add a “Yes” or “No” for each of the features on the list to indicate whether the tool offers that feature or not.
- Ask the vendor to add details about the feature in the “Comments” section.
- Once you receive the filled-in checklists back from the vendors, check the total score (generated automatically) for all HR products and make your buying decision based on your requirements.
Additional Resources
To further help you understand the landscape of HRM software, we have created a number of detailed buyer guides. Here’s a quick list you can choose to read from:
By Application:
By Specialty:
