What Is HR software?

If your business is struggling with high turnover rates, time-consuming processes, and compliance issues, you’re either not using HR software or you’re using the wrong HR software for your business needs.

Our aim is to break down the key features and aims of HR software so that you can make an informed decision on what system will drive the future success of your business.


What is HR software?


Human resources (HR) software acts as a centralized system of record for employee data. It also helps HR leaders and personnel with the attraction, recruitment, management, engagement, and development of employees.

HR software is intended to save time through automated processes, and to also help HR leaders make workforce, financial, and hiring decisions.

Don’t fall into the trap of purchasing one-size-fits-all HR software—this simply won’t benefit your unique business needs and will result in wasted software spend and unhappy employees. Here we’ll look at the key features and considerations for businesses looking to invest in HR software.

Key Takeaways


  • The HR software landscape has experienced a period of rapid change over the last few years, but the emergence of cloud-based HR software has allowed HR departments to automate manual processes, improve the employee experience, and move away from expensive legacy systems.
  • Twenty-seven percent of HR leaders report that “insufficient technology” is a cause of burnout in employees, demonstrating how important HR software has become to the modern workforce.
  • Your employees are the most important resource you have, and your company’s success depends on your ability to manage them effectively.

Why does HR software matter for your business?

The global HR software market is currently valued at $15.8 billion, and with good reason. HR software is the only tool you’ll use that has an effect on almost every department of your business. But—because of the broad and extensive functionality of HR software and the amount of different types of systems—it can be difficult for buyers to make a final selection.

Your employees are your most important asset, and your success depends on your ability to manage them effectively. HR software gives you a competitive advantage in getting the most out of your workforce by improving decision making and saving time on repetitive tasks.

Features that distinguish HR software

While many HR systems come with vast functionality there are two core features that any HR software worth its salt should have: employee profiles and an employee database. Depending on your business’s needs, you might be looking for extra functionality, but the following features are non-negotiable.

Employee profiles: Searchable record keeping

Employee profiles are like a virtual filing cabinet, and arguably one of the most important HR software features. These profiles contain key employee data such as job title, manager, contact information and store it in one place for a comprehensive view of all employees.

Ceridian Dayforce‘s employee cards store key employee data in one place (Source)

Having this kind of digital directory where everything is stored in one place is vital for any company. Even smaller companies who want to scale will soon falter if they’re using actual filing cabinets for keeping tabs of who’s who in their organization due to inevitable human errors.

Filing cabinets are also just straight up inefficient. Need to quickly look up some employee information? This will likely take you mere seconds when using employee profiles in HR software, compared to at least a few minutes when searching through paper files. Storing employee data in software is also highly secure, unlike paper-based records.

Employee profiles will save you time when searching for employee information, and reduce the probability of making mistakes when recording information.

Employee database: Maintain accuracy of employee data

Employee databases also store important employee information, plus important employee records such as resumes, I-9s, W-2s, social security numbers, healthcare data, and more.

BambooHR‘s employee databases store important employee records (Source)

Similar to employee profiles, employee databases are another type of virtual filing cabinet for storing essential employee records in a unified hub with quick access. The maintenance and accuracy of employee data is a top priority for any HR department, and with one single source of data, managers are better placed to fulfill this role.

Additionally, if your company has employees in multiple locations, storing records in different countries or continents makes little to no sense. With a single database spanning multiple locations, employee records are much easier to consolidate and access.

Employee databases also help drive talent decisions. When hiring, managers have quick access to past employee profiles and skill-data to help them make hiring decisions, and can plan the future workforce based on employee information.

Importantly, in many cases, the maintenance and management of employee records is a legal obligation for employers. Without accurate employee databases, companies risk fines or penalties for failing to secure sensitive employee data.

The future of HR software

The HR market has grown exponentially, and is predicted to grow to $30 billion by 2025. HR software has been maturing constantly since its emergence in the 1980s. Cloud-based software, the rise of artificial intelligence, mobile access and video have all guided the shift in the traditional HR software landscape. Let’s take a look at some of the big trends impacting the future of HR software.


Mobile HR management


“Be where the people are”—that mantra is the catalyst behind mobile HR management. As people rely on their smartphones for more and more aspects of their lives, HR managers are focusing on mobile-accessible applications that can help them communicate and collaborate with their workforce better.

Mobile HR management is also responding to the need to improve employee experience and engagement with employee self-service by enabling employees to manage their HR profiles from anywhere. HR managers see significant benefit as well: mobile recruitment, onboarding, and analytics are also driving the mobile revolution.

Because most workforces are now mobile-dependent, a mobile-first strategy can keep your employees engaged and increase productivity.


Video interviewing


The use of video to interview candidates has been a game changer for recruitment. While many applicant tracking systems and standalone video interviewing platforms are already offering this functionality, it’s very likely that more HR suites will add this to their recruitment modules,

Video interviews allow for more transparent recruiting methods, and saves time and expenses during the recruiting process. Adapting to video interviewing is a must in order to stay ahead of the recruiting curve.


Real-time feedback


Employees have long complained about the lack of periodic feedback they receive from their managers. HR systems now facilitate real-time feedback, which helps both employee and employer to have more constructive and regular conversations about performance and development.

Regular feedback can enhance employee engagement and motivation—it’s time to move away from the yearly performance reviews and get on board with more regular feedback cycles.

Next steps in your HR software journey

So, now that you’re more prepped in what HR software can do for your business, what’s next? First, take a look at our 2019 recruiting trends analysis which will further flesh out the HR software landscape.

Then, take a look at our HR Buyers Guide which can provide you with more info on common features, how HR software is priced and hosted, and how much you can expect to budget.

Next, give our HR software advisors a call on (844) 675-2849. They’ll ask you a few questions about your business and recommend a list of HR software that best fit your needs.

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