Introduction

Human Resource (HR) software enables organisations to manage employee records and other human resource information in a straightforward and accurate way. Also referred to as Human Resources Information Systems (HRIS) or Human Resources Management Systems (HRMS), HR software is often designed for large corporations with significant HR teams running anything from dynamic resource allocation to payroll functions. However, today's generation of HR software also offers scalable options, so is suited to organisations of all sizes that need to streamline their HR responsibilities and procedures.

Plenty of HR software will work in multiple ways, sometimes on a modular basis and sometimes as a complete business solution. For example, typical functions expected of an HR software platform will help to organise employee contact details in a central database. This might also include their department, job description, attendance record, pay history, training information, and any key skills they might have.

SMEs and start-ups, in particular, can often benefit from investing in HR software. Bridging the gap between large organisations with a full team of skilled HR professionals and small organisations that might not require—or have the budget for—a team of dedicated full-time HR employees, HR software packages can help middle-managers and business owners facilitate all of their HR functions.

High-quality HR software will often automate many of the processes involved in running an HR department, ideal for smaller enterprises with only limited resources at their disposal. Some HR packages will also integrate with accounts payable software for running payroll or have their own module for this purpose. Other common integrations include compatibility with workforce management software –ideal for scheduling employee workloads, for example–as well as performance appraisal software, which can keep tabs on the progress of staff members as they proceed in their careers. In general, HR management software will be able to:

• Store staff members' personal records on an employee database
• Facilitate planning and human resource allocation using workers' profiles
• Create reports that help managers to make strategic decisions based on available resources
• Manage payroll processes so that salaries are paid accurately according to hours worked and bonuses earned
• Generate time and attendance records to help managers improve productivity
• Offer self-service portals to allow employees to update and manage their own records
• Provide new employee training and orientation programmes, also known as onboarding programmes

What is HR software?

Human resource (HR) software assists businesses and other organisations with the management of employee records and personal information. This can range from contact details and attendance records, through to training schedules and performance management documentation. Ultimately, HR management systems use employees as their primary resource, offering an easily accessible overview of the ‘human’ aspect of any business.

Designed to provide users with swift and efficient access to employee details, HR management software can provide on-premise solutions as well as cloud and Software as a Service (SaaS) deployment options. As with all data repositories, security is key—much of the information stored within HR software packages is either private, commercially sensitive, or both, so in-built access controls ensure data protection protocols are adhered to.

Yet the primary function of HR systems software is to facilitate efficiency. Automating a large number of HR tasks, HR software for small businesses in particular can allow for a more cost efficient allocation of financial resources. For larger companies, there are HR platforms capable of handling scheduling issues in multiple time zones, permitting real time updates that can be simultaneously accessed, shared appropriately, and administrated from locations anywhere in the world.

Related to applicant tracking software, payroll software, and performance appraisal software, HR systems software will either integrate with workforce management software or include a module that handles the human resource allocation function. From SMEs to large multinationals, HR software systems can provide organisations of all sizes with operational advantages.

What are the benefits of HR software?

The benefits of HR software are numerous, but all are focused on consolidating the control of human resource functions in a single package. HR management software that is specialist in nature will offer different benefits to one that provides a suite of functions as an overall solution. For example, HR software for small businesses might not suit large multinationals and vice versa. That said, all good HR systems software will provide several distinct advantages that include:

• Time-saving through automation: automating many of the background functions that would otherwise have to be done manually—such as assigning employee numbers to tasks or payslips, for example—allows a reduction in human resource allocation. In turn, this means that small business owners can spend more time doing other jobs and large corporations can more efficiently deploy the HR professionals it employs. Saving time means boosting operational efficiencies and, ultimately, lowering overheads.

• Dataset integration: centralising datasets via integration allows all relevant records to be more easily accessible and updated. Anything from home addresses and phone numbers to next of kin information and overtime records may need to be amended multiple times over the course of a year. Organisations may also hold additional records for employee skills and training, the number of internal courses attended and pending deadlines for recertification. From payroll records to disciplinary documents, consolidating all employee data and centralising access routes via an employee database helps improve the speed of operations and the accuracy of the data that is stored.

• Local employment practice accommodations: localised professional HR solutions software provide human resource managers with everything they need to comply with geographically relevant employment regulations. This includes accommodating employees who are based overseas or who work in other jurisdictions. Most UK HR software, however, is specifically geared to the needs of British-based businesses. For example, the UK's laws on pay as you earn (PAYE) taxation and employer-based pension contributions will often feature in integratable payroll software so that all required deductions on payslips and so on are clearly marked. Additionally, HR software UK businesses might opt for might also benefit from systems that take account of British legal frameworks that deal with other areas of employment law, such as the right to ask for flexible working practices, parental leave, and formal complaints procedures.

• Analytic capabilities: real-time analysis of employee data is a huge benefit to businesses of all types, but it is especially advantageous to those going through a restructuring process. Organisational change is only effective when decision-makers have the right information at their fingertips, especially concerning human resources. Knowing how and where to deploy employees is an important part of today's corporate thinking. Strategic decisions should be made with verifiable data to back them up, and the latest generation of HR software provides this. Such data might include staffing levels over time, or the availability of people with key skills, for example. Even better, cloud HR software, which stores data securely in third-party servers, allows decision-makers to access the information they need at any time and from any portable device—a big plus for small, agile firms and multinationals alike.

• Drives down recruitment costs: streamlining all the processes associated with hiring personnel can help to reduce recruitment costs. Any expenditure on recruitment adds to a business’ operational overheads, particularly if outsourcing is otherwise necessary to any or all of the relevant tasks. With good HR software recruitment packages, the costs associated with hiring new employees can be reduced by maintaining records on all applicants that can be evaluated fairly at any time, while also prompting contact with people who have been unsuccessful in the past for future jobs that might become available. In many cases, this sort of applicant tracking will speed up contacts between internal decision-makers and preferred candidates.

What are the features of HR software?

HR systems software offers a wide range of core and common features, as well as more specific features that are designed for particular industries or business requirements. Here are some of the most common features of HR software:

• Comprehensive employee database: Managers who have HR responsibilities can store all of their staff's personal information in a single location. Certain aspects of the database may be made available to middle managers and supervisors; typically, this would include training records or information about an employee's relevant skills to help them be deployed more usefully in an organisation. In addition, an HR software employee database will hold more personal information, such as home addresses, records of illness, and disciplinary records. Well-designed HR databases will only allow access to such records by authorised people, usually HR professionals or senior managers. Other information typically stored on an employee database these days would include annual leave records, employee qualifications, timesheets, and individuals' length of service.

• Central storage of employee profiles: Employee profiles are stored centrally to make record-keeping easier. Another key aspect of many HR systems, in many cases, although not all, employee profile entries will be integrated into an employee database. Typic ally, HR professionals will use coding in a profile to help them perform certain functions. For example, rather than listing all of the in-house training modules an employee has taken and passed, as you might expect with an employee database, their profile will use codes to show which skills they are trained in and how long ago they took the relevant course. HR professionals can then use their employee profile software to plan future courses to ensure, for instance, that a sufficient number of staff members have the right health and safety updates. Employee profiles are not limited to training issues, however. They will often cover the full range of HR records. A profile might also include coding to quickly determine whether an employee works full or part-time, whether they have any holiday remaining in the current year, or whether they make voluntary contributions to the employer's pension scheme. This way, assigning tasks or performing certain functions with a certain class—or group—of employees becomes much simpler.

• Reporting/analytics with real-time data: Access the data surrounding employees as and when it changes. Planning a shift rota, for example, may mean understanding a compan y's order book to determine how many employees will be needed for a certain period, but it will also mean knowing who is available for certain shifts, especially when specialist skills will be required. Especially with online HR software, managers can run the necessary HR reports to better manage their workforce without needing to come into the office. HR cloud software, which stores data on third-party servers, means secure reporting is possible from anywhere in the world. This is something that is particularly useful for businesses that run on a 24-hour basis. Even UK HR software designed for SMEs rather than big corporations often includes access to analytics which help to simplify the large amounts of data stored in, for example, digital timesheets and so on. Many HR software solutions include standard reports as well as versions that users can program to perform specific analytical functions.

• Payroll management system: Process employee transactions with integrated payroll software. Even businesses outsourcing their payroll functions to a third-party provider can use HR management software with a payroll module—even if they don't intend to process payrolls themselves. That said, a payroll management system will help many businesses, large and small, to ensure that their weekly employee payments or monthly salary transactions are fair, accurate, and legal. In particular, UK HR software will help HR professionals running payroll functions to ensure that all the necessary deductions are carried out before payments are sent to employees. Typically, software for HR and payroll will work out how much needs to be deducted for employee pension contributions, student loan repayments, National Insurance Contributions, and income tax. Many will also produce payslips for employees so that they have a clear understanding of how much they have been paid and what for, including overtime, performance-related bonuses, and so on. Furthermore, HR payroll management will often integrate with HR database information so that annual P60 forms can be automatically generated and sent to employees' home addresses. It also means their bank details can be securely accessed so that salaries can be paid directly into them each month.

• Up to date time & attendance records: Track employees' attendance and the hours they have put in. As accuracy is critical to employers, up to date time and attendance records are a feature of the best HR software. In the past, employees might have had to manually clock in and clock out when they started and finished work, but this is now often done electronically instead. For example, when people log on to their terminal, they will often create a digital record of their attendance and availability for work. Essentially, HR software stores all of this information in order to create a record of staff members' working hours. Where people are paid by the hour, being able to access their digital records in a software system helps to improve accuracy and saves time among HR professionals. Even when employees are not paid for specific attendance times, such records can help work out the productivity of certain employees compared to others. This can help identify underperformance as well as highlight those who might be working too hard and may be liable to burnout. In addition, most time and attendance systems will allow managers to work out who might be taking too many sick days and who is next in line for the opportunity of working overtime. In short, access to these sorts of records helps with a raft of HR and resource allocation issues.

• Self-service portal employee access: Employees can access their employer's HR software and update it according to their individual requirements. Self-service portals are not a feature of all HR software systems, but they're increasingly more common nowadays. Basically, a self-service portal allows employees to access their employer's HR software and to update it accord ing to their individual requirements. An example of the way this might work would be when an employee changes the bank account that they would like to receive their salary in. Rather than filling out a form that an HR professional or a manager has to process, the self-service portal allows an employee to enter the new details at a time that suits them. The record will then be updated automatically in time for the next payroll. Furthermore, self-service portals can be used to book holidays, to handle in-house training appointments, and for employees to alter other personal information, such as their address or next of kin records. Crucially, self-service portals only allow employees access to their own records and not to any other information that might be stored on the organisation's HR software database.

• Onboarding programme management: Automate the provision of orientation courses, policy documents, video presentations, and scheduling to more easily commence a new employee's work within the employer's organisational structure. In fact, a ny organisation that wishes to streamline its onboarding programmes for newly recruited personnel is likely to benefit from this useful HR software feature. Many organisations, particularly larger ones, have onboarding programmes for new employees so that they can become better acquainted with the organisational structure of their employer. This might mean attending different team meetings or holding one-to-one sessions with managers in different departments. Scheduling all of these appointments can be a headache, especially when the relevant people who a new employee should see have busy and changing schedules of their own. Onboarding modules in some HR software systems can also automatically allocate initial tasks to new employees, enabling them to become more familiar with work patterns and employer expectations.

• Anonymous 360-degree feedback processes: Utilise anonymised feedback to encourage more honest responses. HR software that runs 360-degree feedback programmes with built-in anonymity leads to more open employee engagement. When an organisation adopts a culture of 360-degree feedback, all employees are asked to offer feedback on each other . However, in order to prevent people from becoming upset by their peers, their manager, or the people they manage, anonymity must be maintained. For this reason, HR software is invaluable because it can be used to gather all of the feedback without the need for who said what about whom to become known. Many HR software solutions include 360-degree feedback modules these days. Typically, they won't just gather feedback using pre-determined templates but present it with average ratings, statistical dashboards, and word clouds, to name but a few functions.

What should be considered when purchasing HR software?

The most important considerations prior to purchasing HR software will depend on the size and the structure of the organisation concerned. What will be of most importance to an SME with only a small HR team will not often match a large multinational corporation's requirements. Equally, what might suit a non-profit organisation may not be adequate for the needs of a commercial business even though both run HR software systems. Predominantly, however, the following considerations will be the most significant for the majority of businesses, charities, and other professional organisations.

• Which modules are included in the HR software? Some HR solutions software provide all of the modules organisations might ever need within a single package. Others are more modular and allow users to pick and choose. For example, businesses that want an HR self-service system and an employee database but which outsource their payroll function may want a modular HR management software system rather than a complete solution.

• Is the HR software free to use? Some free HR software will work with only a limited number of employees or will only allow users to operate certain modules before a payment needs to be made. It is worth checking out whether a free HR software system will work for only a trial period and which functions are not available if a freemium HR platform is selected.

• Does HR cloud software offer additional benefits? Many organisations use cloud-based software solutions these days because it means not having to use their own servers. Certainly, there is a great deal of flexibility on offer for businesses that adopt online HR software. However, it doesn't suit every organisation because third-party servers will necessarily hold some private data. For organisations with employees in some countries outside of the UK, this may cause a potential regulatory problem if private data storage outside of their jurisdiction is a consequence of choosing a cloud-based system.

• How is the HR software charged for? Some HR software can be purchased outright. Other HR management software systems are provided on a licensed basis such that only a limited number of users can access the system simultaneously. This may suit organisations with small HR departments, but it would not necessarily lend itself to a company that wished to operate a self-service HR function among all employees. There again, some HR software packages are charged for on a modular basis, so organisations that choose this type will only pay for the elements of the system that they actually make use of.

What are the most relevant HR software trends?

Like all software developed for commercial usage, there are identifiable trends associated with HR platforms. The latest trends in HR software include:

• More machine learning: Artificial intelligence (AI) is now being deployed in numerous software applications, and HR software systems are no exception. One area where AI is being used at the moment is prediction. For example, using past records to establish what future time and attendance statistics will look like and even, in some cases, automatically rostering shift patterns.

• Online HR software for SMEs: Although larger organisations often adopt an entire HR software solution to meet all their needs, this can sometimes be too much for smaller businesses. That's why many developers now offer online HR software which can be accessed in a modular fashion only when it is needed. Cloud storage means that data is available 24/7, and SMEs don't need to pay for their own servers or the attendant cybersecurity infrastructure because this is all taken care of by the software supplier.

• Greater user-friendliness: With the advent of self-service HR software platforms, so general users are using these sorts of packages more and more. In other words, HR software is no longer the domain of HR professionals only. Consequently, intuitive design, user-guided operations, and even chatbots that help to resolve common problems are now very much in vogue among software developers.

Sources

The features highlighted were identified based on their relevance and the percentage of products in Capterra’s directory that offer them. The following sources were used for this document:

1. 5 key benefits of an integrated HR system (Date accessed: Thursday, July 1, 2021)

2. 10 Benefits of a Recruitment Software (Date accessed: Thursday, July 1, 2021)

3. Everything you need to know about HR Databases (Date accessed: Thursday, July 1, 2021)

4. The Benefits of Using Time and Attendance Software (Date accessed: Thursday, July 1, 2021)

5. 10 Features every Employee Self Service Portal should have! (Date accessed: Friday, July 2, 2021)

6. What is 360-Degree Feedback? (Date accessed: Friday, July 2, 2021)

7. 6 HR technology trends to anticipate in 2021 (Date accessed: Friday, July 2, 2021)