Ever since managing a remote workforce became the number one HR challenge, HR tech had to configure a new way to keep up with the changing demands. If you are looking to ramp up your organization’s HR tech ecosystem but don’t know where to start, you are not alone.
According to a PwC study, over 74% of organizations plan to increase their HR software budget. However, with the advent of new technologies, you are spoiled for choice when it comes to the tools, features and integrated solutions at your disposable.
But which one goes best with your organization’s specific HR objectives?
Next-generation HR systems like cloud people management, automation and Artificial Intelligence (AI) are helpful to know. But do you need them?
Before answering this, you must understand why you need to have a seamless and robust HR system and how to pick a human resources application software that’s the right fit for you?
Why do you need robust HR software for your business?
Have you ever wanted to optimize a business process, automate repetitive tasks and implement algorithms to make smart decisions? The right HR software can do that and so much more. But, just like any other business process, HR needs a robust application to make it effective and resourceful.
The demand for HR software is set to cross $10 billion by 2022. Additionally, the HR tech landscape is ever-evolving. With new technologies coming to the fore, this is the right time to rethink the tools you use and how you can build a resilient HR system for your organization.
Some of the functions a robust human resource application software can perform are:
Supporting recruitment practices.
Implement automation for day-to-day HR operations
Maintaining a categorized database of candidates and employees
Enabling training, workshops and learning journeys for new and existing employees
Maintain a record of leaves, work time and timesheets
Managing payroll, compensation and benefits
Launching and tracking employee engagement programs
Benefits of HR software solutions
Whether you are a small business with less than 50 employees or a large organization with multiple operations, HR software offer functionalities that translate into tangible benefits. The right solutions can help you optimize about 40% of administrative tasks saving your time and money in the process. Recognizing areas of HR your organization can improve is the key to leveraging the HR software tool you choose.
Improve core HR capabilities
HR tools offer the ability to automate tasks so that your HR team can focus on more important projects. For example, with less paperwork and administrative tasks, HR can devote their time and attention to recruitment needs, enhancing training and boosting employee engagement efforts.
Make a well-informed decision
Data is at the heart of HR management, whether it is maintaining employee information or tracking day-to-day tasks. Yet, HR teams are unable to get the most, even after having access to this valuable data. HR tools empower HR by generating reports, aiding analysis and capturing key insights that can guide decisions related to recruitment, performance, retention and much more.
Create an enriching employee experience
Studies report that engaged employees are healthier, more productive, report fewer absences, and are less likely to look for opportunities elsewhere. You can incorporate employee engagement
programs that take your employee loyalty to the next level with the right HR tool.
HRIS vs. HRMS vs. HCMS
Depending on the function, you will find different types of HR software specialized in managing different tasks. However, there are essentially three categories that cover every aspect of HR.
Human Resource Information System (HRIS)
HRIS software is designed to deal with day-to-day HR operations. It revolves around digitizing employee records, managing documents & reports, and providing a centralized tool to access all employee data.
Human Capital Management (HCM)
HCM encompasses all the functions that HRIS software performs and more. In addition to digitizing employee records, HCM software goes a step further. It helps HR teams deal with the planning and organizing areas of HR. It also allows HR teams to evaluate, process and analyze employee performance related to productivity, engagement and value.
Human Resource Management System (HRMS)
HRMS encompasses everything that HCM software offers, with the ability to digitize and automate tasks. In addition, HRMS tools offer extensive management tools and are usually integrated solutions that cater to large organizations.
HR software workflow
The number of tools and resources available to manage HR may seem extensive but easy to understand. Here is how the three HR application software components fare with each other:
Applicant Tracking System (ATS)
Employee Self Service
Time and attendance tracker
Leave and Absence management
Learning and Management
Single-click Payroll Management
Time & Labor Management
How to choose the right HR software tools for your organization?
HR software tools not only allow you to manage your workforce but have implicit effects on your bottom line. So how do you go about choosing the right HR software to maximize ROI?
As employers continue to adjust to the new way of work, they need pragmatic and integrated solutions to help them protect their business and people.
- Greg Golub, Founder and CEO of Sequoia
Identifying gaps in your current process will help you ask the right question. But if you do not know where to start, here are the key aspects to consider before you zero in on any HR application software or features:
Scalability and Flexibility
HR software that is growth-ready can and will save you time and resources in the long run. However, your application needs to account for business expansion. Is it flexible enough to account for upgrades in technology, third-party APIs and cloud support? Will you be able to scale with your current software without requiring large-scale customization? Ideally, your HR software needs to offer the scalability and flexibility that a forward-looking, agile and dynamic business needs to grow.
Seamless integration capabilities
While today’s HR software is ahead of its time, it is essential to consider integration with your current HR system. Having a meaningful integration strategy can help you improve processes and comply better with data and security regulations. Does the HR solution provider offer integration support for your core HR systems? Does it need extensive modifications to work with your applications?
Training and implementation
To get the most out of your HRMS tools, you must consider the training and implementation aspects of the application. An effective training program that assigns accountability will quickly orient your team and troubleshoot any issues in implementing HR software. Your training program must help employees understand the scope of the application and make the most of the tools on offer.
Human Resources application software usually comes with inbuilt data security and compliance capabilities. These allow HR teams to secure large amounts of confidential employee information. HR tools also offer high levels of control that allow HR managers to share data securely and maintain the highest standard of all-around privacy.
Before you go
In all, the importance of HR software applications cannot be overstated. Using an optimized HR system has cascading effects in the long run. It can save you cost and time, improve critical areas of workforce management and enhance virtually all aspects of your business, like revenue generation and customer experience.
Frequently Asked Questions
Do I need both an RFI and RFP when seeking HR software providers?
With a request for Information (RFI) form, you will be able to get a complete overview of the HR application software from your potential vendors. It is meant to give you an insight into their functionalities and whether they meet your specific feature requirements, budget criteria, compliance standards, etc. On the other hand, a Request for Proposal (RFP) allows vendors to customize their offer as per enterprise needs and provides a more tailored insight to what is on offer.
Who should take the buying decision?
Ideally, a combination of HR and IT teams should be on your decision-making team alongside finance. Once a tentative budget is finalized, both HR and IT leaders add valuable inputs on the feasibility, functionality and features that best meet your organization’s goals.
How should I do my research for the right vendor?
Researching HR news sites for new and old players in the market, following the latest HR tech trends
and keeping an eye out for new vendors through industry conferences and exhibits are just ways to find potential vendors online.