What is HR software?
HR software encompasses the myriad tools organizations use to manage daily HR processes, such as recruiting, onboarding, training, payroll, benefits, time and attendance, performance management and succession planning. While HR software was originally inward facing and focused on the administrative tasks of HR departments, today’s products make the art and science of developing the organization’s human resources.
Types of HR software
HR software usually comes as a suite of modules, each one designed for a specific HR process.
The most comprehensive platforms go by several names:
- human resource management system (HRMS)
- human resource information system (HRIS)
- human capital management (HCM)
These comprehensive suites of HR software typically include the following categories of software modules, which can often be bought separately:
- core HR (benefits, employee records, payroll, etc.);
- talent management (compensation, learning, performance, recruitment, succession);
- workforce management (scheduling, time and attendance); and
- service delivery (employee and manager self-service, help desks).
Benefits of HR software
HR software enables organizations to digitize the record-keeping, computation and communication tasks performed by the HR department and distribute some of those responsibilities across the organization. Functions such as time and attendance, payroll, recruiting, regulatory compliance and benefits administration can be moved off paper and managed — usually more efficiently — on computers. This partial automation of manual tasks can reduce labor costs, streamline HR processes and make them more effective.
However, the effect of the technology goes far beyond these commonplace benefits of HR automation. When more employees perform better and reach their full potential, the result is often improved creativity and productivity that ultimately leads to higher profits.
- Create a strategy to evaluate HR tools. Define the organization’s biggest workforce challenges, needs and goals.
- Assemble a cross-disciplinary buying team. Include representatives from HR, IT and finance, as well as departmental managers and staff who will use the software.
- Identify your requirements. List what is important to the organization in an HR software system. The criteria should cover technology requirements and business issues, such as international compliance needs.
- Identify potential vendors. Use a variety of research methods — from reports to speaking with other companies — to generate a list of possible vendors. Then, narrow it down to five to 10 vendors to approach for more information.
- Send a request for proposal (RFP) to the shortlist of vendors. The RFP should be clear and concise and include information about your organization, the project, timeline, submission rules and scope, as well as a vendor questionnaire.
- View demos. They’re the best way to judge a module or feature’s capabilities. Ask each vendor to build demos around actual use cases from your organization. Fully scripted demos that show the exact steps for employees are the best way to tell if a product will deliver.
- Read case studies. Find customer stories that include deployment and adoption challenges. Ask vendors for reference customers who can answer questions directly.
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