It’s always hard to work under a budget. We look for deals, coupons, seasonal discounts and special offers everywhere. This is especially true when purchasing HR software. Since the human resources department is so important, businesses of all sizes need to identify and prioritize the most important features of HR software to improve operations without overspending.
But choosing the right HR software for your company is no small task, especially for resource-strapped small and midsize businesses. There are hundreds of options and lots of features to understand. It’s easy to get confused, which is where this guide comes in.
We’ll show you ways to save money and stay within your budget when purchasing HR software.
Here’s what we’ll cover:
Use a Features Checklist
Check Out Free and Open Source Tools
Use a Features Checklist
The most important way to save money is to figure out exactly what you need, and choose accordingly. For example, an HR software user called us saying she wanted to switch software because her company’s HR solution had too many features that were barely being used! They wanted to ditch it to save costs.
Our “Essential Features Checklist” for SMB HR solution buyers is a great place to start. The features listed here are categorized into two distinct types. While essential-for-all features are must-haves for small businesses, essential-for-some features will be relevant to specific use cases.
Below mentioned is a quick summary of these features. You can match these with your specific requirements from HR software.
|Feature type||Feature name||Feature description|
|Essential-for-All Features||Personnel Tracking||Centralizes employee information and helps track employees’ work hours and locations.|
|Benefits Administration||Manages benefits programs, tracks vendors, monitors expenses and tracks employee preferences.|
|Reporting||Identifies trends and action points from employee data so you can better understand common issues.|
|Essential-for-Some Features||Employee Management||Manages employee workload and compensation.|
|Recruiting||Automates the processes of job posting, resume browsing, candidate shortlisting and more.|
|Benefits Management||Provides a self-service portal that lets employees manage their benefits on their own.|
|Learning and Development||Manages training initiatives across the organization in a uniform, organized and trackable manner.|
Questions to ask yourself when considering features:
- Does your current software plan include the Essential-for-All Features mentioned above?
- Are the functionalities built-in or offered as third-party integrations, for which you have to pay extra?
- Would buying the software as a bundle result in cost savings?
Refer to this list when choosing what features your business needs. You can also call us at (844) 675-2849 for a free consultation with a software adviser to ask about the pricing of a specific tool.
We encourage organizations that call us for advice to check out more than one option. Some already have alternative software in mind, while others come with a blank slate. Whichever position you are in, checking out the alternatives is a good way to arrive at a final decision that suits your needs.
One of the primary reasons for reviewing alternatives is to manage costs. For that reason, you should review at least five vendors before you decide. To help you make the most cost-effective decision, we have identified alternatives to some of the most popular HR software solutions by comparing products with similar capabilities.
Here are three tools, and their alternatives, that rank high on our HRIS Management FrontRunners Quadrant:
Note: you can learn more about our alternatives methodology here.
What is BambooHR?: The cloud-based software ranks as a Leader in our FrontRunners Quadrant and is widely used. Its offerings include employee data management, an applicant tracking system (ATS), employee self-onboarding, time off tracking and pre-built reports.
Business need: BambooHR’s native application programming interface (API) easily integrates with third-party software. The ability to integrate allows users to purchase upgrades/add-ons as and when needed.
What is Cornerstone OnDemand?: Cornerstone OnDemand offers end-to-end employee management. Its key applications are recruiting, learning management system (LMS), performance management and human capital management.
Business need: The solution helps HR departments search, hire, train, engage and retain talent. It also has a mobile-friendly interface, an e-learning module and data visualization tools that makes it easy to plan career growth and track daily tasks.
What is Gusto?: Even after the name change, Gusto remains a highly popular solution in the market. However, it does not offer some common HR features such as ATS, compensation management and performance review.
Business need: Gusto can be a cost-effective solution for small businesses and independent contractors who want to manage payroll, 401k, deduction management and wage garnishment among other things.
Many times, when you make an impulse purchase, you reevaluate your choice and think: Did I really need that? The same thing can be said about software. Companies often overspend on suites without understanding the benefits of add-on features that are bundled in the package.
For that reason, here are some questions you should ask during the software selection stage:
- Do I need to change/upgrade all of my existing software?
- Can I use an existing software application, such as the current accounting system, with the new HR solution?
- Does the vendor offer a one-time license or subscription payment method? Also, are there any deployment costs?
- Do my employees need an advanced feature such as a certified HR consultant to help manage compliance with state and federal tax rules? How would I rate this requirement against my company’s needs?
- Are there any hidden costs? What will be the total cost of ownership?
You won’t always find everything you need in bundles, so you need workarounds. Some features may be more affordable in a dedicated software suite, rather than as a module within a larger HR system. Alternatives like the ones below can help you address the most pressing needs without burning a hole in your pocket.
Priority business need: Employee scheduling
WORKAROUND: You could use a cloud-based solution like Ascentis and TimeAttend by Replicon to automate employee schedules, which helps managers plan for contingencies. These solutions can notify employees about any schedule changes or if they’re needed to come to work urgently. Also, you can automate salaries and calculate final payment based on paid time off, benefits, taxes etc.
Priority business need: Learning management
WORKAROUND: Some industries, such as food manufacturing, have to prioritize training and certifying employees to match the latest standards. They also need to train new hires quickly so that they can start working soon. But businesses of all types have training and onboarding requirements for their new hires.
Learning management software saves managers a lot of time; they can train and mentor new hires one-on-one and online. Solutions, such as Litmos and iSpring Learn, have easy-to-use interfaces that help new hires navigate through the course library and complete onboarding quickly.
If you want to learn more about common workarounds for HR software in detail, call us at (844) 675-2849 for a free consultation with a software advisor.
Check Out Free and Open Source Tools
There are some free and open source software options that offer basic functionality to manage HR tasks. While some of them are good solutions, you may not always get all that you want for free. Also, even though the code to open source software is free, implementation and upkeep is not. Here are the key differences between free and open source software:
Free HR software
These are cloud-based tools that may have a forever-free plan, which businesses can use without paying an upfront fee. These are often limited-feature versions of paid software. Most vendors offer basic features up front, which can be upgraded to paid versions as your business grows.
- No software cost and none of the installation charges typical of open source tools
- Simple and easy to use, as most free tools are designed to be user-friendly
- Option for upgrade available for those who want the tool to scale as the business grows
- Functionality can be crippled as free solutions limit the number of users and features
- Additional costs can accrue, related to support requests, data storage and other functionality
- Zoho People: It is a web-based integrated HR suite that offers integral features such as employee self-service, leave management, attendance management and time tracker. The software is free for up to five employees.
- Zenefits: It offers user dashboards, core HR functions, benefits administration, onboarding and employee scheduling. Zenefits integrates with payroll, health insurance and other systems. Its free plan is called Lite HR.
Open source HR software
These tools come with freely available source code, which businesses alter to create a customized HR solution that meets their business requirements.
- No license fee as the source code is free
- Customization of features is possible by making changes to the source code
- Strong user communities can answer frequently asked questions
- Service can be an issue, if you are totally dependent on the user community
- Software can be vulnerable to threats, unless you have an experienced IT security team
- High total cost of ownership (TCO), as you have to take care of software maintenance and data management
- OrangeHRM: This solution includes core HR functionality as well as the ability to customize workflows.
- Sentrifugo HRMS: Offers key HR features such as performance appraisal, employee self-service, leave management and time tracking.
In the past, we’ve talked about some of the top HR solutions that are offered for free. Free or open source software often comes with a catch—or at least limited functionality—so check out this article to understand what to expect.
You can find out whether or not open source HR software is right for your business by giving us a call at (844) 675-2849 to talk to a software adviser.
Additional Tips and Next Steps
Software buyers are always looking for ways to save money. By employing a variety of money-saving methods, such as those mentioned above, you can cut costs in your budget. Here are some more tips:
- Check out demos and free trials: When you’re demoing software, make a note of all the features and costs and trial the software for employees. Collect feedback from the team members who will use the software. The demo can help you anticipate costs, deployment times, any disruption to work etc.
- Look into software bundles: Make a list of all the features you need, and determine which can be purchased as add-ons to lower the costs. However, be sure to keep an eye on the TCO to avoid going over budget.
- Choose the best deployment option: A pay-as-you-grow model will help make sure that your costs don’t overshadow earnings. This is easy to manage in a cloud-based solution. You can avoid recurring license and hidden hardware costs. No matter what deployment you choose, be sure you pay for what you use, when you’re using it.
While this report intends to give you general tips on saving money when buying HR software, you can also read our detailed buyer guide. Fill out this short questionnaire to receive custom price quotes delivered to your inbox, or call us at (844) 675-2849 for a free consultation with an HR software adviser.