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What Is HR Software And How Can It Benefit Your Business?

Put simply, HR software enables HR professionals to easier manage the human resource function of their organization. 

But, as we’ll see, it’s not just HR teams that benefit, it’s managers, employees, and, ultimately, the business overall that can benefit from HR software.

In this article, we’ll explore the uses, benefits, and types of HR software so that you get an idea of which will be most beneficial to your company.

What is HR Software?

HR software refers to any software application that assists with the human resources function of an organization. The aim of HR software is to make processes more efficient and improve the workplace for both HR and non-HR staff.

Who uses HR software?

Organizations of all shapes, sizes, and industries use HR software in its various manifestations. HR software first cropped up in the 1970s when companies needed to store employee data on large mainframe computers to help meet regulatory standards.

Further, HR software isn’t only used by members of the HR department. It’s likely that all members of an organization will use HR software to some degree, and this is something to consider when choosing the appropriate option for your organization.

What can HR software do?

HR software will instantly allay all your HR woes and turn your organization into the most desirable place to work in the whole universe!

Fallacy, of course, but it can certainly help with this process.

As touched upon, the objective of HR software is to enable the more efficient handling of administrative processes and, closely related, to provide insights and tools to improve the employee experience.

HR software comes in many different flavors, from vast enterprise-level human resource management systems (HRMS) to fun little virtual water coolers. Here are some of the core functions:

Benefits and payroll management

A core function of a lot of HR software is helping you keep track of all the information that employees need to get paid properly. 

This includes details such as their name and address and social security number, as well as the types of benefits being used by each employee.

Perfect hiring and retention

When it comes to hiring, you can use HR software to create a job posting and then distribute it online to where your potential recruits are hanging out.

Then you can use HR software, such as an applicant tracking system (ATS), to keep track of the progress of each candidate and get insights to identify where your process might need some improvement.

When it comes to retention, HR software can be used to improve the employee experience and therefore increase retention. 

Further, you can also glean insights such as how long workers are likely to stay at your company (maybe you find people are most likely to leave after two years) and then plan accordingly.

Enable employee training and development

When it comes to training and development, you can use HR software for everything from tracking attendance at training sessions to creating employee profiles containing information such as qualifications or interests.

Some systems will also come with tools workers can use to tailor and track their own development and learn new skills through online courses.

Improve the employee experience

In modern times, especially since COVID-19, HR departments and organizations as a whole are becoming much more intentional and experimental with their approach to managing employees. 

This is characterized by activities such as employee journey mapping and collecting feedback through regular pulse surveys

HR software can help with this by providing digital methods of collecting anonymous feedback on everything from engagement to stress levels to benefits packages. In short, it helps HR departments put together business cases for new products and initiatives.

From an employee perspective, it’s also nice to be able to book a vacation and update details and benefits without having to send off a load of emails!

Further Reading: HR Software Requirements

Benefits of HR software

As you’ve probably come to realize, HR software can benefit individuals and teams across your business in a (growing) number of ways. 

How can HR software benefit HR?

Human resource management can be broken down into three distinct parts. 

  • HR admin – keeping track of employee data, payroll, compliance, hiring, resourcing, etc.
  • Human ops – being a coach, listening, supporting, showing empathy, making strong positions for a business’s ethics and values.
  • People ops – the ‘product’ that employees subscribe to when they join a business e.g. culture, training and development, opportunities, perks.

HR software can help everyone within your HR department by helping them to work more efficiently. 

A lot of the power of modern HR software, such as a human resource management system, is that all employee information is held in one centralized database where it can be easily accessed, updated, and analyzed.

For example, an HR administrator will use HR software to pay all employees correctly, track important information, and report anything unusual to human resources. 

People ops can also utilize HR software, for example, pulse surveys, to gather employee feedback/data and monitor the success of HR products and initiatives.

Human ops isn’t really a function per se and can’t be automated (at least not yet anyway). However, by allowing HR team members to work more efficiently, HR software affords more time for listening and empathy.

What are the benefits of HR software for employees?

HR should benefit employees, so it figures that HR software should too. As well as enabling HR and managers to better serve the workforce, employees can directly benefit from features such as self-service when it comes to updating their personal info or booking time off.

As aforementioned, some also empower employees to take control of their own learning and development, access online resources, or jump into projects of interest.

What are the major benefits of HR software for businesses?

HR software can help you hire, manage, develop and retain talent more effectively and efficiently. Making use of the tools and data offered by the myriad of solutions available (more on that soon) will help you build happier, healthier, more engaged teams that are motivated to work. 

Of course, the automation of manual, time-consuming processes will save the business money. Some solutions will also help you stay on the right side of compliance, too.

Types of HR software

There are a lot of HR software solutions available on the market. Some companies, such as Cisco, choose to develop their own.

Common types of HR software include:

How to choose the right HR software for your business

With so many options to choose from, it’s work taking time to research the market and find the right solution, or combination of solutions, that work for your organization.

For example, one system alone might not have all the features your team needs or, conversely, too many you don’t.

Ultimately it’s up to you and your stakeholders to decide: Is it worth the cost?

As well as cost, other factors to consider include:

  • Usability – is it easy to learn and master? Does the company offer good tech support, user support, tutorials, and training? 
  • Scalability/flexibility – is the software equipped to grow and expand with you as your company and HR needs change over time?
  • Reporting and analytics (for bigger systems mainly) – does the software offer real-time and actionable insights using the data you provide it? Are reports customizable, easily exportable, and otherwise flexible?
  • Integrations – is it easy to connect with other tools? Any pre-built integrations? Does it connect to any job boards for easy recruitment?
  • Value for $ – how appropriate is the price for the features, capabilities, and use case? Is pricing clear, transparent, and flexible?

Next steps

HR software isn’t a magic bullet, but try asking an HR professional, manager, or employee to give up a solution that they like and you better have a good case for doing so.

We encourage you to explore the world of HR software further. People Managing People is replete with resources to help you discover and assess new tools.

Businesses of all sizes are now utilizing human resource management systems (HRMS) that encompass many of the core HR software tools and provide increasingly powerful data analysis tools. 

We’d recommend this article introducing HRMSs as a good next step. 

Alternatively, head over to the People Managing People community to get advice from other HR and business leaders, including conversations about the latest tools available in the HR world.

Worth Checking Out: What Is A Professional Employer Organization?