What Does HR Software Do?



Many business professionals want to know: what is HR software and what does HR software do?


Human resources (HR) is a critical aspect of any business, yet it can also be one of the most challenging areas to manage. HR software exists to help businesses manage their employees more effectively and efficiently.


HR management software automates and manages the administrative functions of human resources, including employee onboarding, time and attendance tracking, and benefits management.


By automating these processes, HR software helps businesses save time and money -- while ensuring compliance with relevant laws and regulations. In addition to these administrative functions, HR software can also help companies identify and track key employee engagement, retention, and productivity metrics. When it comes to finding the right HR software for your business, there are a few key factors to consider: what specific processes you want automated, how many employees you have, and your budget.


Let's take a look at what HR software is, how it works, and what the core benefits are.


What is HR software?

What is HR management software? HR software is a digital solution for managing and optimizing the administrative tasks, human resources tasks, and overall HR goals of an organization. HR software makes it possible for HR staff and managers to better allocate their time and resources to more productive and profitable efforts. This can include anything from tracking employee hours and attendance to managing payroll and onboarding new employees.


HR software can make it easier for businesses to keep track of all their employee data and help them remain compliant with government regulations.


There are many types of HR software available, and companies should carefully research which option is best for them. Popular HR software solutions include payroll software, HRMS (human resources management system), and ATS (applicant tracking system).


There are several factors to consider when choosing HR software, such as the size of your business, the number of employees you have, and the features you need.


Keep Reading: Do I need accounting software for my small business?


What does HR software do?

HR software aids an organization’s human resources department by automating many manual, paper-based tasks. It also helps to keep employee information well-organized and makes data-driven reports possible. HR software can serve employees and managers within an organization with tasks such as time tracking, updating employee directories, and performance management.


HR software can accomplish the following functions:

  • Setting goals and managing performance

  • Creating work systems and keeping track of approvals

  • Automating pre-boarding, onboarding, and off-boarding

  • Assessing and reporting employee satisfaction

  • Tracking self-service time

  • Administering and managing benefits

  • Tracking staff growth and compliance training

  • Protecting and arranging employee data in a secure manner

  • Integrating third-party applications

  • Using an audit trail to track all data changes

  • Creating tailored reports to provide strategic knowledge

What are the benefits of HR personnel software?

While there are many benefits to using HR software, one of the most significant advantages is its potential to minimize time spent on repetitive, low-impact administrative duties. This enables HR professionals to focus on more productive roles and longer-term strategic goals.


Other significant advantages include:

  • More precise analytics

  • Process simplification

  • Constant feedback

  • Error reduction

  • Improved organization of documents and employee data

  • Advancements in succession planning

  • Maintaining compliance with federal requirements in organizations

What are the signs that you’re ready for HR software?

The signs that you’re ready for HR software are pretty clear. If your company is growing quickly, experiencing turbulence, or has a complex HR process, it’s time to invest in HR software.


The first sign that you need HR software is when your company starts to grow rapidly. As your company expands, it becomes increasingly more difficult to manually manage employee files and track HR data. This can lead to errors and missed opportunities.


The second sign that you need HR software is when your company experiences turbulence. When your company is going through a tough time, the last thing you want is to waste time trying to calculate employee hours manually.


Perhaps you’re finding it increasingly difficult to keep track of employee files and records manually. Maybe you’re having trouble scheduling and tracking employee vacation days. Or perhaps you’re just not sure how you will handle the next round of performance reviews. If any of these issues sound familiar, it might be time to consider investing in HR software. The right system can make your life a lot easier, freeing up time and energy so you can focus on more important things.


You’ve decided to go global.

The problems and complexities of global and local employment rules can involve a significant amount of HR work. The rules, regulations, and policies differ per nation, ranging from mandatory working hours and sick leave to data compliance, pensions, and health care. HR and people executives want a system that controls and maintains global standards as well as local rules with ease.


Your HR task is excessively administrative.

With rising demands on HR’s time, relieving your staff of time-consuming paperwork is a must. A sophisticated HR system can automate fundamental HR operations and workflows. This significantly minimizes the amount of time spent on HR administration. HR might go from a strictly transactional role to a more strategic people-focused team.


Spreadsheets aren’t satisfying your requirements.

While spreadsheets may have served you well in the past, the data stored inside them becomes unnecessarily complicated, obsolete, and vulnerable to data breaches over time. Report compilation might take hours, if not days, using valuable time that could be spent on more essential duties. By automating human data input, a robust HR system may produce a single central record. In other words, your records are up-to-date and correct, providing you with real-time information at your fingertips.


HR analytics: You can’t report on what you need to report on.

The use of out-of-date software can make creating reports and evaluating data a difficult and unpleasant process. In only a few clicks, a sophisticated HR system can enable you to reel off any people management figures the C-suite requires in just a few seconds. It serves as a single point of truth for data collection, reporting, and analysis, allowing you to track and anticipate trends. You can deliver trustworthy workforce insights to inform quick business choices if you have access to the data you require.


You want to improve experiences and give managers greater authority.

Because your people are your most valuable asset, creating outstanding workplace experiences that keep employees engaged and motivated is critical. With the correct HR system, you can develop employee self-service portals where your employees can access and manage their data. They may submit vacation leave or expenses requests, freeing up your HR team’s time to focus on more important responsibilities. The correct HR system also offers managers authority by allowing them to immediately sign off on requests from their team members and build a gateway for handling employee assessments and feedback in one location.


What should you look for in HR management software?

How can you identify the products that offer the core functions and specialized characteristics your company requires the most? And how can you analyze vendor spec sheets and demos to evaluate products in sufficient depth to make the best decision?

Features and functionality aren’t much help because most solutions are mature and perform the same things; the challenge is determining which products do an outstanding job of solving your most challenging, messed-up functions or process pain points.


One of the most prevalent HR software purchasing blunders is looking for tools that automate current procedures. We encouraged firms to, instead, study what is feasible with the new HR technology on the market, reinvent their HR or top talent management processes, and then select a vendor who they believe can bridge the gap between idea and reality. To do so, businesses must transform their perspective on HR technology from one that serves the HR department to one that meets the requirements of all workers.

  • Make a plan for evaluating HR tools. Define the organization’s biggest workforce challenges, needs, and goals.

  • Establish a cross-disciplinary buying team. Include representatives from HR, IT, and finance, as well as departmental managers and staff who will use the software.

  • Determine your requirements. List what is essential to the organization in an HR software system. The requirements should include technical and business challenges, such as international compliance standards.

  • Send a request for proposal (RFP). The RFP should be simple and to the point, and it should include information about your company, the project, the timeline, the submission criteria and scope, and a vendor questionnaire.

  • Check out the demos. They are the most effective approach to estimate a module or feature’s capabilities. Request the vendor to create demos based on real use cases from your organization. Fully scripted demos that show employees the specific steps to take are the greatest method to determine if a product will deliver.

  • Examine case studies. Look for client experiences that involve deployment and adoption issues. Ask the vendor for reference customers who can answer questions directly.

How to get started

Although HR software may seem like an unnecessary expense at first, its benefits to companies are innumerable. HR software has become an indispensable tool for businesses of all sizes. Recent events have revealed that if your organization is falling behind in implementing digital transformation, it is now the time to adapt. Recognizing the need for HR technology investment is only the first step.


We can assist you in determining which solutions are appropriate for your company depending on your demands and budget. If you’re still on the fence about investing in HR software, please contact us to learn more about the benefits it can provide to your company.


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