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In this guide, I'll walk you through the essentials of HR software costs, helping you understand how to make a cost-effective decision that aligns with our shared goal: enhancing our HR operations without breaking the bank.

Don’t worry—we’re here to walk you through what you need to know and consider when it comes to this significant investment. 

Here I’ll take you through:

Let’s dive in!

HR Software Cost Examples

Here's a summary table showing the top 10 HR software types and their costs, to give you a baseline for what to expect.

Type of HR SoftwareSmall / Medium Enterprise Cost ExampleEnterprise Cost Example*
Human Resources Information System (HRIS)From $8 per user, per month
Reference: Rippling
Pricing upon request (quote based)
Human Capital Management (HCM)From $8 per user, per month
Reference: Eddy
From $13 per user, per month (minimum 1,000 employees)
Reference: Oracle HCM Cloud
Human Resource Management Systems (HRMS)From $7 per user, per month
Reference: SageHRMS
Pricing upon request (quote based)
Applicant Tracking Systems (ATS)From $15 per user, per month
Reference: Manatal
From $600/month
Reference: Pinpoint
Learning Management Systems (LMS)From $4.08 per user, per month (100 users)
Reference: iSpring Learn
From $2.83 per user, per month (500 users)
Reference: iSpring Learn
Performance management toolsFrom $8 per user, per month
Reference: Leapsome
From $11 per user, per month
Reference: Lattice
Payroll softwareFrom $5 per user, per month
Reference: Paycor
From $160 per user, per month
Reference: ADP Workforce Now
Employee scheduling softwareFrom $1 per user, per month
Reference: Zoho Shifts
From $7 per user, per month
Reference: ClockShark
Talent management softwareFrom $5 per user, per month
Reference: PerformYard
From $85 per user, per month
Reference: SAP SuccessFactors
Employee onboarding softwareFrom $5 per user, per month
Reference: GoCo
From $1,500 per year
Reference: Qualtrics EmployeeXM
Examples of how much different types of HR software cost per month.

*Please note that prices for enterprise-level HR software plans are usually only available upon request. The reason for that is because the pricing depends on the number of employees you have, as well as the specific software features you want to be included. In general, enterprise-level software plans have the most flexibility because the monthly subscription fees are also the highest.

For more details on each of these HR software categories, see 10 HR Software Types and Costs below.

When selecting your HR software, assess your software requirements carefully and prioritize solutions that offer comprehensive functionality to streamline HR processes, as some software options cover multiple HR functions.

HR Software Pricing Models

Once you’re ready to purchase HR software for your company, the next step is to consider the price range of various HR software vendors

hr software pricing graphic

You’ll want to consider your number of employees, budget, desired functionalities, and specific needs. You may not need to use HR software in every aspect of your business. It’ll save you money by pinpointing your specific need before you spend time assessing numerous HR tools. 

There are two different pricing models to choose from.

Subscription-based plan:

In this scenario, the software provider hosts the service on their own server. This is also known as a SaaS (Software-as-a-Service) subscription-based model for cloud-based (i.e., online hosted) software. You can expect to pay a monthly or annual fee for this service—usually per employee, per month.

This is a more straightforward option that many companies choose because it requires a lot less internal IT resources to maintain the software and ensure proper data security.

Perpetual licensing:

In this scenario, also known as on-premise software, you’d pay for the software once, including any annual costs for software upgrades or maintenance, and your business would run the software from your own server. The license never ends, and your company would have to maintain its stored data indefinitely, in accordance with compliance rules.

This option is less popular because it requires a lot more in-house technical resources to manage. However, it is a good choice for organizations that deal with sensitive data and don't want their corporate information stored in a cloud. 

Types of Pricing Plans:

There are four different types of software pricing plans:

  1. Quote-based plan 

A quote-based plan is customized for the unique requirements of your business. You’ll pay for what you need and nothing you don’t. 

  1. Monthly payment plan

Monthly payment allows companies to use HR software without a long-term commitment. While there are benefits to choosing a month-to-month payment plan, it can cost more in the long run. 

  1. Annual payment plan

By choosing an annual payment plan, you’re able to see the long-term benefits of the HR software company you chose. You may also be offered a 10-20% discount for opting to go with an annual plan. 

  1. Free plan

Some vendors offer free plans, or freemium plans, normally for a limited number of users or functionality. These are a great way of testing the software to see if it’s the right fit for your organization before making a long-term commitment.

defining measures of success graphic

How to Define HR Software Success

Before you decide to move forward with a new HR system, it’s essential to determine your business needs and your goals in using it. What do you hope to achieve with your new software?

If you don’t set definitive measures of success ahead of time, you won’t know with clarity if the software did what you hoped it would. 

Here’s an example: 

If errors in work output cost your company a significant amount of money each month, automation could help. You’d be able to compare the amount of money lost before using the software versus the amount lost after implementing it—allowing you to see clearly whether the software has been beneficial in that specific area. 

Is your turnover rate too high? Perhaps automated applicant tracking would help get the right people in the seats—giving you confidence your new employees are qualified to be there. 

Stay up-to-date on all things HR & leadership.

Stay up-to-date on all things HR & leadership.

Determining the ROI of HR Software

It's important to consider how much return on investment (ROI) your new HR software will provide, should you decide to invest in one. Here are some tips on how you can estimate your anticipated ROI in advance, as well as monitor it after your software implementation is complete.

Calculation Method: ROI = (Gain of Investment) - (Cost of Investment) / (Cost of Investment)

Example: Your employee engagement levels are low, leading to low employee satisfaction scores and high volumes of turnover. High turnover means you need to recruit new staff and train them for their roles, increasing operational costs.

Solution: You decide to invest in employee engagement software.

Key Metrics to Watch: To measure the ROI of your new employee engagement software effectively, record these key metrics before and after implementation.

Key Metric to WatchExpected Change in MetricHow to Measure
Employee productivity levelsIncreased productivityBusiness-specific. Could be task, revenue, or sales-based.
Employee retention levelsIncreased retention (i.e., less turnover)Turnover rate
Employee satisfaction scoresImproved satisfactioneNPS score or survey feedback
Recruiting costsDecreased costs due to less turnoverMonthly recruiting costs + # of staff hours spent on recruiting
Training costs for new hiresDecreased costs due to less turnover & hiringMontly training costs + # of hours spent by new hires in training
An example of some key metrics to help monitor the success and ROI of implementing new HR software.

Questions to Ask When Choosing HR Software

You’ll want to consider these questions when it comes to deciding which company to go with:

  • In what areas could you benefit from HR software?
  • What are your current pain points, and which type of HR software could solve them?
  • What employees and departments would be impacted?
  • How would a new HR software system reduce workloads, and for whom?
  • Is the system you’re interested in compatible with businesses your size?
  • What is the cost of implementing the software? (Remember to include cost estimates for installation, integration, and data migration.)
  • Is there a cost for training staff on how to use the software?
  • How user-friendly is the software?
  • Are there additional fees for customer support?
  • Is there an option for add-ons to include specific modules if needed?
  • Is the software user-friendly for a remote workforce?
  • Will the potential cost of ongoing consulting fees and software upgrades be worth the cost compared to the time and effort your staff will save?
  • How will your HR team use their newly found extra time to support the business?

Frequently Asked Questions about HR Software Costs

Let’s take a minute to consider the basics and answer some most commonly asked questions about what HR software is and what it does.

What is HR software?

HR software is a digital solution designed to streamline and automate various human resource management tasks, such as payroll processing, employee data management, recruitment, performance evaluation, and benefits administration.

The demand for tons of paperwork is eliminated, giving you more time to focus on running your business.

HR software also helps manage and automate requirements like employee time-off, employee data and directories, and performance management. You can allow employee self-service options for employees that will further save your HR staff time and give your staff autonomy.

For a high-level summary of the best HR systems out there, this list of the 60 best HR software vendors is a good place to start.

What HR functions can be automated with HR software?

The HR software space is very broad and there are different types of HR software that cover the core functions and tasks your HR professionals wrestle with on a regular basis. You can use HR software to automate the following functions:

  • Onboarding & offboarding
  • Payroll management
  • Human resources management
  • Attendance and time-tracking
  • Workforce management, including scheduling
  • Employee training
  • Performance reviews
  • Talent management
  • Benefits administration

This list is not exhausting by any means, but you get the idea! If you’d like to learn more, check out our detailed round-up of different types of HR software, including their key features, benefits, and tips on how they can help you.

Why do you need HR software?

Whether you’re a startup or enterprise company, HR software solutions save your business time and money by automating workflows and organizing data in one centralized location. This makes it easier for you and your staff to focus on the bigger picture.

It also leads to more energized and productive team members who aren’t spending their days completing mundane tasks. This increased employee engagement impacts your company’s overall culture and workforce satisfaction.

If you’d like some help with your selection process, this 5-step HR selection process may be just what you need.

10 HR Software Types and Costs

Here's an expansion from our previous table, full of examples, links, and best practices to help you make the best decision for your business.

Here are the top HR software systems and their costs:

1. HRIS

Human Resource Information Systems (HRIS) can help your HR department manage needs like payroll, benefits, and training. 

Examples:

  • Small/Medium Enterprise (SME): Rippling (from $8 per employee, per month)

Rippling is a good choice for small businesses in need of strong integration options and is highly rated by customers.

  • Enterprise: quote-based pricing

Most cloud-based enterprise-level HR software vendors only offer pricing upon request. The price will depend on the size of your workforce and the software features you need.

For further guidance, check out the best HRIS systems on the market today.

2. HCM

Human Capital Management (HCM) is similar to HRIS with a strategic focus on the management of employees.

  • Small/Medium Enterprise (SME): Eddy (from $8 per employee, per month)

Eddy covers all your core HR functions and is highly-rated for managing deskless workforces (i.e., mobile or front-line workers who don't sit at a desk all day).

  • Enterprise: Oracle HCM Cloud (from $13 per employee, per month)

Orache HCM Cloud has a long-standing reputation as one of the biggest players in the HR software space. Their software can be used across numerous industries, including healthcare, manufacturing, and many other business sectors. 

Take a look at our list covering the Best HCM Software Vendors for more guidance when it comes to which system is best for you. 

3. HRMS

Human Resource Management Systems (HRMS) help automate your business needs and assist with HR duties like CoreHR and leave management, performance, timesheets, and expenses.

  • Small/Medium Enterprise (SME): SageHRMS (From $5.50 per employee/per month)

SageHRMS works with small and medium-sized businesses to save your HR department time and energy.

  • Enterprise: quote-based pricing

As noted previously, most enterprise-level HR software vendors only offer pricing upon request. The price will depend on the size of your workforce and the software features you need.

There are other HRMS systems out there. Our list of the best HRMS is a great place to start.

4. Applicant Tracking System (ATS)

Applicant Tracking Systems (ATS) organize and manage your onboarding process in areas like job postings and interview organization.

  • Small/Medium Enterprise (SME): Manatal (from $15 per employee, per month)

Manatal helps to simplify hiring processes and save you time. (Read our in-depth review of Manatal for a more detailed look at their software.)

  • Enterprise: Pinpoint (from $600 per month)

Pinpoint offers a flat monthly price for their software that isn't based on the number of employees or users you have. Their applicant tracking system is well-known for eliminating hiring bias to improve diversity, equity, and inclusion (DEI).

Read the top 10 applicant tracking systems for more guidance when it comes to which system is best for you. 

5. Learning Management Systems (LMS)

Learning Management Systems (LMS) can help you provide growth opportunities for your employees when it comes to learning and development. These systems offer convenient courses and training to help your team members be their best.

  • Small/Medium Enterprise (SME): iSpring Learn (from $4.08 per user, per month - 100 users)

iSpring Learn provides a range of services, from course editing to progress-tracking.

  • Enterprise: iSpring Learn (from $2.83 per user, per month - 500 users)

iSpring Learn offers an enterprise software plan as well, but you need to have a minimum of 500 users to qualify.

Read the 10 best LMS for more guidance when it comes to which system is best for you. 

Related: Learning Management Systems (LMS) for Small Businesses

6. Performance Management Tools

Performance management is one of the toughest aspects of leadership, and it takes time and experience to get it right. Using performance management tools to help you manage the process will save time and allow you to focus on what’s most important.

  • Small/Medium Enterprise (SME): Leapsome (from $8 per employee, per month)

Leapsome provides HR support with a focus on performance management and employee engagement.

  • Enterprise: Lattice (from $11 per employee, per month)

Lattice combines performance management with goals, OKRs, employee engagement, and career growth tools.

Visit our list of the best performance management software for continuous feedback for snapshots of the best systems out there. 

7. Payroll Software

Payroll software is crucial for time management when you’re running a company—it calculates for you and helps ensure employees always get paid on time.

  • Small/Medium Enterprise (SME): Paycor (From $5 per employee, per month)

Paycor streamlines multiple HR processes, including payroll needs, and offers flexible payment options, including earned wage access.

  • Enterprise: ADP Workforce Now (From $160 per employee, per month)

ADP WorkforceNow is a scalable payroll platform that also offers benefits management and talent management functionality.

Review our list of the best HR software for payroll for more guidance on options and pricing. If the pricing of your payroll solution is your primary concern, I also recommend reading our breakdown of payroll software costs and hidden fees.

8. Employee Scheduling Software

How do you run a business and oversee daily employee work schedules? With help! Employee scheduling software eases the burden of worrying about shift covering, clocking in and out, and managing shift coverage.

  • Small/Medium Enterprise (SME): Zoho Shifts (from $1 per employee, per month)

Zoho Shifts offers employee self-management and an automated time-off request system.

  • Enterprise: ClockShark (from $7 per employee, per month)

ClockShark offers time and attendance tools, like schedule management, time-off requests, and hours-worked calculation.

For further insights into options and costs, visit our list of the best employee scheduling software.

9. Talent Management Software 

Talent management systems help you find the talent you’re looking for, recognize your top performers, develop talent further, and aid in succession planning.

  • Small/Medium Enterprise (SME): PerformYard (from $5 per employee, per month)

PerformYard encourages team-coaching and collaboration throughout your business with tracking of progress toward goals and objectives.

  • Enterprise: SAP SuccessFactors (from $85 per employee, per month)

SAP SuccessFactors integrates multiple applications, including performance management, employee goals, feedback, and recognition to recognize progress and ensure success for your business. 

To learn more about talent management, check out the best employee evaluation software for performance reviews & recognition.

10. Employee Onboarding Software

Successful onboarding is crucial to the success of new employees. Employee onboarding software can simplify the process and provide a great up-front experience for potential hires.

  • Small/Medium Enterprise (SME): GoCo (from $5 per employee, per month)

GoCo's software helps you digitize the onboarding process from offer letters, to pre-boarding, and an onboarding checklist.

  • Enterprise: Qualtrics EmployeeXM (from $1,500 per year)

Qualtrics EmployeeXM helps you manage customers, products, your company brand, and your employee experience, all within one system. 

For more guidance on onboarding software, check out the best employee onboarding software list.

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.

Choose the Best HR Software for You

Choosing to automate your business with HR software solutions will reduce margins of error and save employees time and energy. This equates to a more satisfied workforce and increased productivity. 

Be sure to do the following:

  • Consider your current needs and areas of improvement
  • Identify how staff will manage the extra time created by using HR software 
  • Identify what time can be saved and spent on value-added work
  • Decide where to begin first – are there areas of your business that need more immediate attention than others?

For more guidance on choosing the best HR software for your business, check out our pick of the best HR software.

Also, be sure to sign-up for the People Managing People newsletter to learn more from professionals in the HR world! 

By Brandy Bischoff

Brandy Bischoff is the Deputy Chief of a public-safety organization in the United States. While she’s had successes as a manager, she’s always working to become better in her role and wants to learn all she can about leadership. She believes deeply in treating people with respect no matter the circumstance, exercising patience, and continued learning in all aspects of life. Brandy believes in the guidance provided within her writing and hopes it’ll help other leaders learn and become better too. Outside of her full-time career, Brandy is passionate about her loving and supportive friends and family, and she follows her passion for writing when the kids go to bed.