People & Leadership

A buyer’s guide to finding the best HR software for your business

Discover the ultimate buyer's guide to finding the best HR software for your business. Explore how HR software revolutionizes people processes and automates tasks. Uncover the benefits, key features, and different types of HR software systems. Gain valuable insights to make an informed decision and optimize your HR operations. Find answers to FAQs and expand your HR software knowledge with our comprehensive glossary. Empower your business with efficient and effective HR solutions.

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You’ve heard about businesses eliminating admin, freeing up HR teams, and providing employees with stellar experiences. And you want in. 

How do they do it? With software of course. 

HR software (also known as HCM software), to be more specific. Businesses of all sizes are using this to develop effective people processes and automate a range of tasks from payroll to recruitment. 

In this article, we explore how to find the best HR software for your business.

We cover: 

What is HR software?  

Human resources software is any computer program, app, or system that’s used to improve the people processes in your business. This can include everything from recruiting, onboarding, and training to performance management, payroll, and employee record-keeping.  

Most solutions are designed to automate and streamline your HR team’s workflows and include a centralized database where all your employee data is stored.  

You can get HR software that’s installed on-premises, or that’s delivered through the cloud as Software as a Service (SaaS). 

If you’re thinking of bringing in an HR system, you’ll need to figure out which of your people processes are in most need of improvement. Speak with your HR team to understand which tasks take up the most time, produce the most errors, and cause them the most stress.  

These areas will be the best place to start, along with considering the main benefits HR software can provide.  

The ultimate guide to choosing HR software

Discover the secrets and tips in our essential guide


What are the benefits of HR software?  

Not every HR solution is the same, but they generally provide benefits that can enhance either a single function or all your people processes. 

Using feedback from your HR team, think about which of the following benefits could have the biggest impact on your business: 

  1. More time to focus on what matters 

By automating HR processes, you can leave many repetitive and time-consuming tasks to the software. This frees your team to focus on more strategic and fulfilling tasks. 

  1. Simplify people management 

All areas of people management can run more efficiently, with fewer errors, less duplication of effort, and reduced stress. 

  1. Store all your data in 1 place 

With data in 1 place, your entire business works from a single source of truth. This eliminates silos, creates efficiencies across multiple areas of HR, ensures the latest information is being used, and gives you insights on the effectiveness of your processes. 

  1. Feel confident about compliance 

Built-in rules give you full confidence that you’re meeting the latest compliance demands, which makes life easier for your teams and reduces the chance you’ll incur fines or penalties. 

  1. Make communication easier 

Improve communication with your workforce by providing a 2-way channel for everything from performance and feedback, to training and employee record updates. 

  1. Enhance recruitment 

Find and recruit the best talent for your business more efficiently, and then deliver a fluid onboarding experience that helps them settle into your business. 

  1. Pay people reliably 

Protect employee morale by ensuring your people are paid correctly and on time, every time.  

  1. Develop your people 

Empower your people to achieve their potential by providing a structure to their performance and career development. 

  1. Empower individuals 

Free up HR teams by allowing people to self-serve for actions such as booking leave, viewing pay, and updating their information. 

Different types of HR software 

There are types of employee software to suit every business need, size, and budget. Some are specialized solutions that support with a single area of HR, while others are all-encompassing systems that support every aspect of managing your people.  

Now that you understand where your biggest challenges are and some of the benefits HR software can provide, it’s time to think about which type of solution is best for you. 

Common types include: 

Applicant tracking systems (ATS) 

Manage and automate the hiring process, including posting job ads, managing resumes and applications, communication with candidates, screening, scheduling interviews, and providing data analysis.  

Onboarding software  

Provide a consistent and engaging onboarding experience for new employees. Capabilities include generating electronic forms and documents, setting up equipment and software, ensuring compliance with labour laws, providing a feedback channel to new hires, and data analysis. 

Performance management software 

Supports processes related to how well your people are working. This can include setting, tracking, and reviewing performance goals, providing feedback, coaching, and learning and development. 

Employee engagement software  

Measure and improve the emotional commitment your people have towards your business. This can be through surveys and polls, recognition and rewards, and learning and development resources.  

Payroll HR software 

Manage all aspects of paying your employees, including processing payroll, ensuring compliance with labor laws and tax regulations, tracking time and attendance, managing employee benefits, and giving people online access to their pay information. 

Human Resources Information System (HRIS) 

Brings several HR solutions into a single system, providing a cost-effective way for businesses to enhance their people processes across the board.  

This could include employee record-keeping, ATS, onboarding, performance management, payroll, learning and development, employee engagement, and compliance. 

HR software for small business 

Some HR software is designed specifically for small businesses. They cover the same capabilities in the types listed above but have been built with the needs and challenges of smaller businesses in mind.  

This saves you having to purchase a more complex solution designed to help corporations or large businesses.  

Cloud HR software 

Cloud HR software provides many advantages over on-premises solutions. Instead of the software and its data being stored on a server in your building, it is stored on a remote server by the software provider.  

This means: 

  • It can be accessed from anywhere with an internet connection. Perfect for remote and hybrid teams. 
  • It can be scaled up as your company grows and you add more people. 
  • Built-in security measures can be automatically kept up to date with the latest protective technology. 
  • It’s generally more cost-effective because it requires less hardware, infrastructure, and IT support. 
  • It can be automatically enhanced and updated by the software provider. 

Key features of the best HR software systems 

Once you have an idea of the type of solution that would provide the most value to your business, do some research into the market and create a shortlist of options. Pay close attention to the capabilities of each contender, and map these back to the areas you’re looking to improve. 

Regardless of if you’re considering a specialized or complete solution, here are some features that the best HR platforms offer:  

  • Automation 
    The more processes a HR system can automate, the more time it’ll free for your teams to focus on other tasks. 
  • Payroll and benefits administration 
    Paying your people is an essential process to get right. Look for software that can make this faster and more accurate. 
  • Self-service  
    If employees can access the information they need by themselves, you can relieve a lot of admin from your HR team.
  • Onboarding and tracking 
    By standardizing the onboarding process, you deliver better experiences to new starters and help them settle in faster. 
  •  Online learning resources  
    HR systems with online learning resources allow you to invest in the development of your people. 
  • Scheduling and shift planning 
    Solutions with schedule and shift planning features will help you ensure the right people work at the right time. 
  • How does Sage HR stack up? 
    Sage HR delivers many of the features mentioned in this article to make managing your people easy.  

For example, Core HR allows you to centralize your employee records, manage your workforce online, and gives your people access to their payslips and important company documents. 

Additional modules help you streamline every area of HR; from leave management, timesheets, and performance to expenses, shift scheduling, and recruitment. 

By automating processes and eliminating silos, Sage HR supports your team to attract, engage, and retain the best talent. 

The ultimate guide to choosing HR software

Discover the secrets and tips in our essential guide


Final thoughts on choosing the best HR software for your needs 

People processes underpin the success of any business. The more efficiently and effectively your HR team can work, the happier, more engaged, and more loyal your people will be. 

Saving time, eliminating mundane admin, providing enhanced experiences, and reducing errors are all benefits of using an HR platform. No matter what your business does, or how many employees you have, there are solutions that can help you achieve all of these. 

By working with your HR team to identify challenges and areas of improvement, you can determine which benefits would provide you with the most value and start screening HR software providers for their features and capabilities.

HR software and human resources FAQs 

Do I need HR software?  

This really depends on the complexity of your people processes. Even small businesses can benefit from HR software and achieve a positive ROI. Consider factors such as your staff turnover rate, current level of engagement, ability to recruit, and the software budget available. 

What is the most popular HR technology? 

The most popular HR software systems vary based on industry, organization size, and specific HR needs. For example, HRIS software is typically popular among large organizations with complex HR processes, while an ATS is popular among organizations with high recruitment needs. 

What is a HR framework?  

A comprehensive model that outlines the key components of your organization’s human resources management. It provides a systematic and strategic approach to managing your employees and supporting the overall goals of your business. 

What is the cost of HR software?  

The cost of HR software varies based on the type, number of employees, available features, any implementation and training required, and the payment model (subscription based or 1-off payment). 

Is my HR software data safe in the cloud? 

Cloud HR software is generally considered safe, as long as appropriate measures are taken to ensure the security of the data. Cloud providers typically have robust security measures in place to protect against unauthorized access, data breaches, and other security risks. These are often automatically updated, meaning less maintenance for the customer.