Every growing business requires a skilled human resource (HR) department to function. HR is vital for ensuring your workforce remains productive and happy.
High-performing small businesses from dental practices to nonprofits need HR software to run payroll, support employee development plans, onboard and offboard staff members, and stay compliant with state and federal laws.
It is possible to streamline HR processes using specialized software. To help you get to grips with the concept of HR software and understand how it could benefit your business, we’ve put together a comprehensive guide below.
Table of Contents
- What is Human Resource Software?
- Do I Need Human Resource Software?
- Human Resource Software Use Cases
- What are the Benefits of Human Resource Software?
- What Should I Consider When Evaluating Human Resource Software?
- What Human Resource Software Tools Should I Consider?
- Human Resource Best Practices and Tips
What is Human Resource Software?
Human resource software is a specialized technology designed to help companies manage their staff members more efficiently. HR software is usually cloud-based and available to purchase via monthly subscription models.
Although HR software is primarily used to manage employees and business operations, solutions differ in their breadth of features. Solutions can specialize in human resource management, payroll, or applicant tracking. Top tier solutions can often help with two or more specializations.
HR software is built for companies of all sizes. Software built for smaller businesses is generally cheaper than HR software built for enterprises.
Do I Need Human Resource Software?
Human resource software is foundational for small and medium sized businesses. We especially recommend adopting HR software if your company has less than 500 employees.
If you’re still not completely sure if HR software is right for you, take a look at the checklist below. These are five signs that you likely need HR software:
- You’re still running manual payroll for employees
- You have trouble tracking new tax and compliance laws
- Your employees still clock in manually
- You want to distribute your job posts at scale
- You spend hours looking for employee data
Human Resource Software Use Cases
HR software has the potential to benefit all types of businesses. Here are a few examples to give you an idea of the versatility of HR technologies:
#1. Run Payroll
Running payroll is one of the main reasons most companies adopt HR software. Automated payroll allows you to pay employees accurately and effectively. High-performing solutions will also allow you to run a number of off-cycle payments, including:
- Cash tips
Below is an example of payroll in one of the most popular HR software solutions, Gusto.
#2. Manage Benefits
Many HR tools guide you in selecting benefit plans for your employees. This is another reason why we recommend HR software primarily for small businesses. Each solution works with different brokers that help personalize your benefits packages.
You can oftentimes select medical, dental, and vision plans for your company using HR software. However, some solutions will offer additional benefits such as commuter benefits.
#3. Mass Distribute Job Posts
Although creating and distributing job posts is a speciality for applicant tracking software, some HR solutions offer these recruiting features.
Creating a job post in BambooHR is seen above. Many HR solutions integrate with popular job boards such as Glassdoor and LinkedIn to seamlessly distribute your post upon creation. This ensures you’re bringing in a diverse and talented pool of candidates for your company.
#4. Time Track Employee Hours
Time tracking employees is a critical feature that many HR solutions offer. However, the scope of this feature may vary depending on what software you select.
The primary time tracking feature most businesses leverage is clocking in and out. For applications such as Gusto and Zenefits, employees can clock in using each software’s respective desktop or mobile app. This is critical for employees who need to clock in away from a computer, such as field service management workers.
#5. Conduct Performance Reviews
HR software can help you conduct performance reviews and one-on-one meetings with your employees. This is an effective way to gain feedback from your employees and set goals as well.
Sage HR allows you to set goals personally, for your team, or for your entire company. Each performance review you conduct has a personal dashboard as well that offers additional insights.
What are the Benefits of Human Resource Software?
There are many benefits of using HR software. Investing in a robust HR program could bring about the following benefits:
Running manual payroll or storing physical employee paperwork is time-consuming and can disrupt your company workflow. Automating certain vital functions can help optimize labor costs, eliminate confusing paperwork, and generally improve the working lives of your staff members.
Find New Talent
The success of any business depends on the talent of its employees. With HR software, you can ensure that your job posts reach the best candidates.
You can automate job post distribution to a number of popular job boards. These include:
Automate Employee Onboarding Processes
HR software allows you to automate onboarding by providing new hires with the relevant software and documents they need to do their jobs.
Robust solutions like Zenefits will allow you to onboard your employees to payroll and benefits, send onboarding documents, performa background checks, and even onboard employees onto tools like Slack or Google Workspace from one centralized hub.
State and federal laws surrounding your business operations are subject to change every few years. With HR software, you can ensure that your business remains compliant with all new regulations and avoid costly fines.
With HR software, you can leverage expense management features to ensure reimbursements are made accurately and fairly. Employees can submit their reimbursement requests either manually or by uploading a picture of their receipt.
What Should I Consider When Evaluating Human Resource Software?
Before you invest in a new software subscription, it is important to find a package that suits your company needs. Here are a few factors to consider while conducting your research:
#1. Does it contain all the necessary features?
There are six essential features all high performing HR solutions offer. Specialized solutions might offer stronger recruiting features or additional expense management. However, these are the critical features to consider when selecting HR software:
|Payroll automation||This should be a core feature for most businesses, with most HR systems allowing users to monitor employee hours and wages. A robust program will also include features for tracking bonuses, reimbursements, overtime, commissions, cash tips, and more.|
|Benefit management tools||Some HR programs offer features to help companies equip employees with benefits such as medical insurance, vision insurance, and dental insurance.|
|Time Tracking||Time tracking allows you to track and approve your employees’ hours. Robust solutions will offer a multitude of ways to automate time tracking. One of the main ones being clocking in and out via a desktop or mobile app.|
|Compliance Support||Compliance support is especially important for newer businesses. Strong HR solutions will provide a checklist or active reminders of changing federal and state laws, as well as missing compliance tasks your company needs to accomplish.|
|Performance Management||Performance management will help employees and managers reach ambitious goals. Some HR software even offers special training programs and rewards systems.|
|Analytics and Reports||Analytics and reports will help you identify areas for improvement in your business. Each HR solution offers a number of helpful pre-made reports. More robust solutions offer user-friendly custom report creators as well.|
HR software is priced on a per user per month basis. Note that some solutions come with additional platform fees. You can expect to spend between $50 and $500 per month.
Software Vendor | Starting Monthly Price | Free Trial | Pricing Details _ Zenefits |$10 per user | Yes |
- 15% off if your company has 25 to 99 employees
- Additional $6 per month per user
HR software should feature an intuitive interface that all employees will be able to get to grips with. If you’re unsure about the usability of an HR program, ask for a demo if possible.
Finally, consider the integrations offered by each solution. Integrating your HR software with other systems can help streamline your processes.
Most HR software solutions integrate with document management, accounting, integration, and applicant tracking software. Here are some of the most popular integrations you’ll find in the HR software category:
What Human Resource Software Tools Should I Consider?
Now that you know how to evaluate human resource solutions, here are the top solutions we recommend. Each selection is based on their specialization and pricing. See our human resource category page for the full list of tools that we’ve analyzed.
Zenefits is our highest rated solution. This is because it ranks highly in features, usability, and pricing. It has standout onboarding assistance and helps small businesses carry out essential HR tasks in a very streamlined manner.
Zenefits is a human resource software solution used by over 11,000 businesses. It is used by businesses primarily to run payroll, onboard employees, and manage employee benefits. It is primarily built for businesses with 50-200 employees.
Gusto is the solution for businesses interested in running affordable payroll for their hourly and salaried employees. It is very user-friendly for newer businesses.
Gusto is a human resource software solution used by more than 100,000 businesses. Gusto started as a payroll solution, but has since added a variety of HR features including benefits and compliance support. Gusto is generally used by small businesses with less than 500 employees.
BambooHR is the ideal solution for businesses in need of recruiting features such as job post distribution and candidate pipelines. Although one of its direct alternatives, Zoho People, is more affordable, it does not support payroll and benefits in the U.S. like BambooHR.
BambooHR is a human resource software solution best for businesses with 25 to 300 employees. It is primarily used by businesses to create job postings and time track employees. Its standout features are its recruiting capabilities, as well as its onboarding and offboarding features.
Human Resource Software Best Practices and Tips Software
Each human resource software comes with a number of different features and use cases. Here are some general best practices and tips to consider:
#1. Organize Employee Documents
HR software can oftentimes allow you to store important employee documents in each employee’s profile. This is a very effective way to house important documents in one centralized location.
Integrating with document management software can also ensure all the information you need is easily accessible.
#2. Send Onboarding Documents to New Hires
Make sure new hires have all the information they need about joining your company by uploading comprehensive guides and handbooks to your HR solution. You can automate these documents to be sent out once your new employee has accepted your offer.
#3. Encourage Employees to use Self-Service Features
Managing employee timetables and holiday requests is easy if you encourage all employees to request time off via your HR software. Some programs sync everyone’s calendars, allowing you to organize meetings quickly without having to ask for everyone’s availability.
Other employee self-service features include:
- Clocking in and out of work
- Requesting reimbursements
- Accessing benefits
#4. Leverage Analytics and Customized Reports
Don’t ignore the analytics and reports section of your HR software. Tracking metrics such as the rate at which your workforce is growing or the average number of sick days taken every year will help you refine your business operations and improve company culture.
#5. Set Permissions
Some HR programs allow users to set permissions for certain apps and data sets. Try to set permissions so that employees are only able to access the information and applications they need to do their jobs. This will reduce the risk of a data breach.
A typical use case of setting permissions is giving more access to accountants and human resource representatives than regular employees.