What Is HR Software? And Why Your Business Needs It
It’s an exciting—and challenging—time to be a human resources (HR) professional: Your role has never been more vital to the success of your company, but you’re also faced with supporting your people in a rapidly changing workplace. As organizations adapt, it’s more important than ever to streamline operations and maximize efficiency.
By partnering with an effective HR software solution, you can do just that—anticipate your employees’ needs and develop a people strategy that is core to the overall business strategy. As a result, you can better manage the day-to-day people processes, free up your time to focus on HR strategy, and attract and retain the best talent for your company.
So, whether you’re an HR team of one at a small business or part of a larger HR department, it never hurts to re-assess your existing process and explore new ways to better serve your employees.
In this post, we’ll explore the functions and benefits of HR software, the difference between HR software and human capital management (HCM), and how to best evaluate HR software. We’ll also include resources demonstrating the critical elements needed in your HR technology to solve many of the challenges faced by HR professionals like you.
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What is HR software?
HR software refers to a suite of digital tools designed to automate and simplify HR processes. It encompasses a wide range of functions, including employee onboarding, time and attendance tracking, payroll management, benefits administration, performance management, talent management, culture building, and more. These technology solutions consolidate data and allow HR teams to centralize their operations, foster seamless collaboration, reduce administrative burdens, improve the employee experience—and, most importantly, focus on strategic initiatives that create an engaging and inclusive workplace
Why is HR software important?
1. Enhanced Efficiency
HR software streamlines administrative tasks, such as data entry, document management, reporting, employee records, and policies, allowing HR professionals to allocate their time more strategically. This increased efficiency leads to improved productivity and enables HR teams to focus on strategic initiatives.
2. Accurate Time and Attendance Tracking
HR software offers advanced time and attendance features, such as employee time tracking, time off, absence leave management, overtime, mobile check-ins, and more, ensuring accurate recording of employee working hours. This helps to streamline payroll processes and minimize errors.
3. Thoughtful Scheduling
HR software manages workforce scheduling, such as employee shift management, strategic workforce planning and staffing, volume-based scheduling, scheduling fairness, scheduling equity, and more. This allows for better long-term employee forecasting, an improved experience for frontline employees, and overall operational efficiencies.
4. Streamlined Recruitment and Onboarding
HR software simplifies the recruiting and onboarding processes by automating applicant tracking, resume reviewing, and digital onboarding forms. It helps HR teams to streamline promoting open positions, candidate evaluation, job interviews, offer management, onboarding, career paths, and more, establishing a smooth transition for new hires.
5. Up-to-date Compliance and Reporting
HR software ensures adherence to labor laws and regulations by automating compliance-related tasks. It generates accurate reports, manages documentation, and facilitates smooth audits, reducing the risks of non-compliance and protecting diversity, equity, inclusion, and belonging (DEI&B).
6. Talent Management
HR software allows organizations to track employee performance, set goals, and conduct regular performance management reviews. It facilitates learning and development, career paths, and succession planning, as well as identifies areas of concern, such as employee burnout or flight risk. This leads to happier employees and better retention.
7. Payroll Administration
HR software ensures payroll is processed accurately and on time with payroll automation and offers features such as earned-wage access and budgeting tools. It also gives payroll professionals strategic insights to support pay equity and pay transparency.
8. Reporting and People Analytics
HR software organizes all your data in one place. This leads to richer, smarter results in the flow of your day-to-day activities since all your processes are connected. It gives you better insight into financial metrics and key performance indicators for HR, payroll, and operations while also providing automated reports, predictive analytics, artificial intelligence (AI) recommendations for continuous improvement, and more.
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9. Culture and Employee Experience
And perhaps, most importantly, HR software allows businesses to create great workplaces by offering DEI&B best practices and benchmarks with tools such as pay equity dashboards, employee listening and feedback, and employee resource group support. All of this leads to a high-trust workplace, which is the key to making an organization a positive place to work and retaining top talent.
What is the difference between HR software and human capital management (HCM)?
You may hear the term human capital management (HCM) interchangeably with HR software. Essentially, human capital management brings together human resources, payroll, and workforce management under one HR technology solution—a one-stop-shop, full-suite single solution. This approach allows you to see the whole person when it comes to each of your employees and make decisions focused on their needs. You can learn more about the acronyms used to describe HR technology here.
How to evaluate HR software
- Identify your needs: Determine when it’s time to invest in new technology; have a clear technology strategy; and evaluate how the solution will help you take care of your employees’ needs and address pain points.
- Gather the right team: Assemble a cross-functional team of key stakeholders who understand the needs of the primary departments at your organization that could take advantage of HCM technology, i.e., human resources, payroll, operations/finance, and IT.
- Ensure user adoption: In addition to forming a team of experts who can advocate for different departmental needs, it’s imperative that you also understand the needs of your workforce who will interact with the technology to complete tasks.
- Set the table stakes: Turn your attention to the big-picture items that are “must-haves” in your HCM solution. Ask the right questions:
- Does the HCM solution combine people systems and work systems?
- Are people, rather than processes, the focus of the HCM solution?
- How powerful is the artificial intelligence (AI) that underpins the HCM solution?
- And lastly, what does the customer support model look like?
In today’s fast-paced business environment, HR software has become an essential tool for HR professionals—and finding the right solution to be your partner for life is key. By automating day-to-day tasks, streamlining processes, and improving data accuracy, HR software enhances efficiency, compliance, and employee engagement. Ultimately, it empowers professionals like you to become strategic partners in driving workforce success, creating engaging and inclusive workplaces, and achieving organizational goals.
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