HR software , also known as human resources information system (HRIS) or human resources management system (HRMS), helps businesses manage employee data related to contact details, attendance, payroll, training, and benefits. Most HRMS systems integrate with recruiting/applicant tracking and payroll software.

The benefits of HR software

HR personnel needs to perform a number of tasks, such as logging employee details, managing paperwork, managing compliances, and employee payroll. If done manually, the complexities and responsibilities involved can be burdening for the HR staff, especially for small businesses with fewer staff members.

HR software helps businesses by automating basic HR functions, which makes the process more efficient and productive. Listed below are ways in which an HR solution adds to the efficiency of an HR department:

• Improved productivity: HR processes involve a number of administrative responsibilities, such as management of employee records, compliances, and employee payroll. When done manually, these processes are time consuming and prone to errors. An HR solution helps you automate these processes by providing digital records of employee data and compliance information. In addition, it helps you manage payroll processes from within the solution, thereby minimising the manual errors.
• Ease of access to information: Human resource software allows users to store information related to employees, compliance, performance appraisals, and payroll in a central database that is accessible through the cloud of all authorised personnel. The data repository also enables users to implement a business-wide HR self-service portal, where employees can access their records, such as compliance certificates, payslips and leaves.
• Improved data security and compliance: Today's business environment faces more data security risks than ever before. Data security risks can be both external, such as hacking, and internal, such as employee theft. Critical HR data such as employees' personal information and payroll data, if breached, may result in severe penalties. This brings in the need for strict data security policies within the HR department. An HR solution not only provides users with secure data access, it also allows them to monitor the downloads of critical documents and contracts by employees. Moreover, a cloud-based HR solution ensures that the location of data storage complies with both regional and global regulations such as PII and GDPR.

Typical features of HR software

• Employee database: Maintain records of all the employees currently working in your business.
• Employee lifecycle management: Track different stages of an employee's lifecycle, such as recruiting, onboarding, benefits administration, employee development, and retention.
• Performance management: Manage performance appraisals (quarterly, half-yearly, or annual) and record performance ratings and manager feedback.
• Onboarding: Manage onboarding for new hires. Enables users to track compliance documents and I-9 verification documents.
• Self-service portal: Provide employees with a portal where they can sign in and perform certain functions on their own, such as viewing their personal details, uploading important documents, viewing company policies and compliance certificates, etc.
• Time and attendance management: Enable employees to log their office hours, mark attendance, and apply for leave. This data can be exported to payroll software and then used to calculate payments for contract workers.

Considerations when purchasing HR software

• Types of HR software: HR software is loaded with a number of features, which can be confusing for small business HR managers to clearly differentiate core features from optional ones. Based on these focus areas, human resource systems can be categorised into the following types:

  • Benefits/payroll
  • Recruiting
  • Performance
  • Training
  • Talent
  • Workforce

Buyers should carefully identify the types of HR software relevant to their businesses and make purchase decisions accordingly.

• Data analytics: Apart from helping human resource staff in their day-to-day activities, human resource systems also help in formulating hiring and employee management strategies by providing analytics-driven reports. For example, reports on the historical data on candidate background can provide recruiters with valuable inputs on important hiring decisions, such as the work experience ranges for a candidate for optimal performance in a role, and the skill set of candidates needed in that role. Also, reports on employee performance across multiple areas can help management assess the skill gaps and help training management to plan training accordingly.

Relevant HR software trends

• Chatbots are driving automation in HR software: Due to the scale of communication they can offer, chatbots are finding application in recruiting, which involves interacting with applicants across different locations and time zones. Chatbots are also powering HR support functions, by answering the basic employee queries on HR policies and processes. As these technologies make inroads into the human resource software space, we expect to see chatbots augment a number of processes within HR.
• Businesses are using machine learning to make human resource systems processes more efficient: Machine learning is transforming the way HR staff work by providing them with real-time insights and assistance in their processes. For example, in recruiting, human resource software can help shortlist applications by performing analyses of CVs and applicant data. Machine learning can also assist managers in performance appraisals by providing them employee assessment of different parameters such as peer reviews, sales, number of projects, etc. These solutions can also help managers predict the future performance of an employee based on historical data.