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If your HR team is new to an HR system or looking to improve your business’s tools, they may not know what to look for. This article examines different types of HR software and describes their key features and benefits. Knowing what's out there will give you a better understanding of how HR software can support your business and help you get time-consuming tasks off your plate.

What is HR Software?

Any program that handles employee information and helps with people management and other HR tasks can be considered HR software. Some HR tools focus on specific functions of human resource management, while others try to provide a comprehensive HR solution.

HRIS, HRMS, and HCM Software

Arguably, one of the most important types of HR software is the HR database category. The three main types of HR databases are:

  • Human resource information systems (HRIS)
  • Human resource management systems (HRMS)
  • Human capital management (HCM) systems

All three of these HR systems support the same core HR functions, including managing employee data, processing payroll, storing employee training records, tracking performance information, and offering employee self-service options.

The main difference between HRIS, HCM, and HRMS tools is the depth and breadth of their HR coverage. An HRIS handles core HR functions, while HCMs drill down into more employee-centric processes, with HRMS software offering even more comprehensive features.

  • Human resource information systems (HRIS) cover all basic HR functions but from a data management and data capture perspective. All of your employee details are in one place, but you have fewer tools to take action with that data. They are more frequently used by small businesses because their pricing is lower.
  • Human resource management systems (HRMS) are comprehensive HR solutions that typically offer more features than an HRIS system would. HRMS software can support the full suite of talent management activities, including recruiting, benefits management, performance management, resource management, and employee training.
  • Human capital management (HCM) software gives you the ability to engage fully on an employee-specific level in areas like employee performance, analytics, and onboarding, offering tools for a more strategic approach to these aspects of HR.

All of them are cloud-based and offer a collection of integrated modules that assist with managing core HR data, functions, and workflows.

We also have a breakdown of the difference between an HRIS, HRMS, and HCM system if you'd like to get deeper into the details.

Benefits

The benefits of HRIS software include the ability to have all your employees’ information in a central database that integrates with other HR systems so that HR professionals can store and access information, perform HR activities, and manage data more efficiently. This streamlines organizational processes and functions.

The benefits of an HRMS include improved data management practices, automatic compliance monitoring flags, enhanced employee self-service and engagement tools, and support for better data-driven decision-making.

The benefits of an HCM include more advanced data and analytics to support better workforce planning, and improved employee satisfaction and retention rates.

Key and Advanced Features

HR information software has some baseline features. A few of those key features are the following:

  • Employee database
  • Absence and leave management
  • Benefits administration
  • Performance management tools
  • Recruiting and applicant tracking
  • Hiring process automations
  • Reporting & analytics
  • Employee self-service portal
  • Manager self-service portal
  • Talent pool searchability
  • Employee onboarding & offboarding
  • Employee development
  • Document management and storage
  • Training management
  • Employee scheduling software
  • Integrations with other HR software

More advanced features often included in HRMS or HCM software include:

  • Employee engagement platform
  • Employee satisfaction surveys
  • Custom workflow tools
  • Built-in training tools

Even within HR database software, there are additional sub-types, such as enterprise HR software, Canadian HR software, and free HR software.

HR Software for Recruiting & Hiring

The two main types of HR software that support hiring are recruitment software and applicant tracking systems (ATS). They both help businesses source job applicants and track candidates through the application, interview, and hiring process.

Recruiting software is more focused on the front-end of the hiring process, such as sourcing candidates, marketing job openings to potential candidates, promoting your employer brand, and engaging with potential candidates.

ATS software, on the other hand, is more focused on tracking candidates as they move through the recruiting process, from their initial application to the acceptance of a job offer.

Both types of software can posts advertisements for open jobs to multiple job boards (both third-party job boards and your own job board) and track those postings.

Benefits

Recruiting software creates an automated, more streamlined recruiting process, including automatic job postings and resume collection. This software can even eliminate unqualified candidates before your hiring manager even receives their applications.

ATS software saves time and energy so that you can reduce the time-to-hire for your business. Additionally, candidates will have a better applicant experience as they move through the process. Some of these systems can even provide HR data and reports on the types of candidates you are attracting and which candidate profiles are likely to receive and accept offers.

Key and Advanced Features

You can expect to find the following key features within both recruiting and ATS software:

  • Development of a job posting to attract job seekers
  • Applicant tracking tools
  • Candidate screening
  • Resume parsing tools
  • Ranking and sorting qualified candidates
  • Interview process management
  • Interview scheduling
  • Recruitment templates and guidance
  • Integration and support for existing job boards
  • Internal review and evaluation tools

Recruitment or ATS software may also include these advanced features:

  • Recruitment marketing tools
  • Recruiting process automation tools
  • Candidate engagement tools
  • Recruiting through social media or direct messaging
  • Two-way HR software integrations
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HR Software for Onboarding and Offboarding

Onboarding and offboarding software support HR in bringing on a new employee or offboarding them when they leave the company. They ensure compliance with all parts of onboarding and offboarding, such as collecting direct deposit information, tax forms, or opening/closing employee email accounts.

Benefits

This type of software automates the cumbersome HR processes of onboarding and offboarding. The element of compliance is particularly beneficial so no loose ends are left in the processes.

Key and Advanced Features

Onboarding software and offboarding software focus on the beginning and end of an employee’s tenure. These systems will include the following key features:

  • Document storage
  • Onboarding checklist
  • Knowledge management
  • Self-service app
  • Onboarding and offboarding checklists
  • Benefits selection

In addition, employee onboarding software might also include the advanced feature of role-specific training for use during the onboarding process. 

HR Software for Employee Engagement

Employee engagement software is intended to support employees in feeling purpose at work. It assists the organization in open communication with employees, employee recognition, gathering and acting on feedback, and creating an excellent employee experience.

Benefits

An engaged employee outperforms one who isn’t. When used well, employee engagement software can help an employer build effective teams that are motivated to help the company achieve strategic goals.

Key and Advanced Features

An employee engagement tool will include these key features:

  • Engagement dashboards, gamification, and activity feeds 
  • Employee engagement survey and feedback options
  • Employee recognition tools
  • Tools for goal setting and tracking
  • Visualization of employee goals
  • Performance evaluation tools
  • Training tools
  • Integrations with other HR and business platforms

HR Software for Employee Training and Development

Training software is used to manage the learning of employees and to create and manage an employee training program. These types of software include tools to deliver third-party training programs, create and deliver proprietary training materials, support onboarding, and track an employee’s learning journey and career development.

Benefits

Employee training software can ensure a new hires receive the appropriate training and knowledge. It also ensures that employees are following company or legal policies. For example, if your company requires cybersecurity training, this software enables you to provide that training and track employees who successfully complete it.

Key and Advanced Features

Training software focuses on employee learning and development. These systems will include these key features:

  • Online learning portals
  • Employee data tracking
  • Automated notifications for learners
  • HR reporting and HR analytics
  • Compliance tracking
  • Assessment tools

In addition to these key features, training software may also include these advanced features:

  • Personalized user experience
  • Course authoring
  • Integrations with other learning and HR management software

HR Software for Performance Management

A performance management system focuses on the performance of individual employees, helping you track, measure, and reward employees for high performance. They can also help you conduct a performance appraisal, monitor employee performance, and deliver performance reviews. Other performance-focused tools enable you to collect employee feedback or reviews of employees from others.

Benefits

A major benefit of these systems is their ability to standardize, formalize, and automate employee reviews and the performance review process. This is beneficial for the HR department, managers, and employees. 

Key and Advanced Features

Performance software includes these key features:

  • Review and feedback processing
  • Improvement plan creation
  • Reporting and workforce analytics

A performance management tool may also include these advanced features:

  • Built-in employee training software
  • Integrations with other HR software

HR Software for Employee Scheduling

Employee scheduling software supports businesses in managing the work schedules of their employees. They provided user-friendly interfaces for managers and staff to view and manage schedules.

Benefits

An employee shift scheduling software provides visibility into each individual employee's schedule while providing tools to manage business-wide staff scheduling. Employees can easily view and make changes to their schedules, while managers can ensure shift coverage.

Key and Advanced Features

Many employee scheduling software packages include the following key features:

  • Scheduling templates
  • Employee scheduling app
  • Shift assigning
  • Shift swapping
  • Worker profiles
  • Resource forecasting 

A scheduling tool may also include these advanced features:

  • Attendance tracking
  • Leave management
  • Integrations with other business systems
  • Multiplatform support, including mobile, for use with different devices and operating systems

HR Software for Payroll and Accounting

Payroll and accounting software automates the payroll process for small and large businesses. Processing payroll can be very labor-intensive and complicated without a payroll system.

Benefits

The benefit of a payroll tool is the automation it provides. This not only saves time but also reduces errors, and it can assist with compliance and payroll taxes.

Key and Advanced Features

Payroll and accounting software should include these key features:

  • Wage calculation
  • Employee payment processing
  • Integration with time clock systems and attendance apps
  • Tax document storage

Payroll software may also include these advanced features:

  • Compliance support
  • Tax filing tools and support

HR Software for Benefits Administration

Benefits administration software includes tools to help manage a benefits package. These HR tools assist with payroll processing, health insurance, paid time off, retirement accounts, and different forms of employee benefits like bonuses or commissions.

Benefits

A benefits administration system can manage the full compensation of employees on one platform. This saves time for the HR department and employees, who can access compensation materials on one platform.

Key and Advanced Features

Benefits software focuses on all methods of employee compensation. These systems will include the following:

  • Self-service portal for employees
  • Payroll deductions
  • Total compensation management
  • Automation of rewards management, pay programs, and incentives

Benefits software may also include these advanced features:

  • Built-in integrations with payroll service and other HR systems
  • Strategic insights to inform your compensation strategy

HR Software for Reporting Strategic Insights

Human resources reporting software and HR analytics software are intended to support your business by providing business performance insights. These types of software can collect and analyze data about your business, presenting the data in digestible HR reports to inform strategic planning.

Benefits

The computing power of this type of software enables it to distinguish patterns and uncover strategic insight from data that would not be discernible to the naked eye.

Key and Advanced Features

HR reporting and analytics software focus on providing strategic insights. These systems include these key features:

  • Data and document storage
  • Feedback and review tools
  • Goal maps
  • Analysis of HR metrics and reporting

HR reporting software may also include these advanced features:

  • Custom dashboards
  • Integrations with other HR and business platforms

Need expert help selecting the right Human Resources (HR) Software?

If you’re struggling to choose the right software, let us help you. Just share your needs in the form below and you’ll get free access to our dedicated software advisors who match and connect you with the best vendors for your needs.

Get on Track with HR Software

By now, you should have a better understanding of the different types of HR software, including their main features and benefits. Think about whether you need software with a narrow focus, like a simple onboarding tool, or more comprehensive HR software that will assist greatly with your human resource strategy.

Also, before you go, I recommend subscribing to our weekly People Managing People newsletter. We'll keep you up-to-date on the latest trends facing HR, including tips to wow your new hires, improve your employee retention, and make better data-driven decisions.

By Finn Bartram

Finn is an editor at People Managing People. He's passionate about growing organizations where people are empowered to continuously improve and genuinely enjoy coming to work. If not at his desk, you can find him playing sports or enjoying the great outdoors.