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A Buyer's Guide to HR Software

Human resource management software comes in many forms and with numerous optional extras and add-ons. This Buyer's Guide will attempt to introduce the business buyer to several varieties of HR software, outline the features and benefits of each and make the process of choosing between them that much easier.

Human Resource Management Software: The Basics

The primary function of HRM software is to gather all your employee data into one database from where it can be managed, edited, added to, used to generate reports, calculate entitlements and benefits and issue warnings or reminders when important dates approach. Human resource management software is normally used by HR staff who will interact with the software via a desktop PC. The software can be web based or work on a typical operating system and be hosted remotely or on a single PC or network of PCs.

Within the program the HR staff will normally have a number of different modules or tabs with which they can interact. These might include:

  • Admin Module – Where the company structure is defined by setting up job titles, pay grades, nationalities, qualification types, licence types, locations etc that the rest of the software will use. You can also set up user preferences and permissions and email alerts to various users or groups of users.
  • PI Module – All the personal information of employees is entered and accessed via this module. This can include the basics like name, DOB, address, qualifications, picture etc as well as department, line manager, payment details, languages, memberships, licences and more.
  • Leave Module – Where leave is managed and recorded. You can define different types of leave, set up standard holidays, view individual employee leave data, set rules for SSP or maternity leave and set up alerts and reminders.
  • Reporting Module – Where you can set up and generate reports on a wide variety of data in the program. User defined reports can be saved so you can run the same report on a regular basis.
  • Time and Attendance Module – Some human resource management software includes time and attendance recording and management which can be used in conjunction with clocking machines or employee PCs via an intranet.
  • Recruitment Module – Set up and store advertisements, import and compare candidate information, manage interview schedules etc.
  • Benefits Module – For managing medical or other benefits schemes.
  • Expenses Module – Expenses can be recorded and managed.
  • Payroll Module – For inputting employee hours, calculating pay, NI, tax and pension contributions as well as generating payslips.
  • Self-Service Module – A module accessible to all employees to input hours, changes to personal information or any other data the HR department needs to gather.

Admin, Personal Information, Leave and Reporting Modules are present in all human resource management software. The other modules above are included in some packages but not in others. Some, like time and attendance and payroll are normally found as separate software packages but are sometimes combined with HR software.

Which modules might be critical to your purchasing decision e.g. a company with lots of staff out on the road might make an expenses module a top priority.

The Human Resource Management Software Options

As HR software is essentially a database with defined ways of accessing, editing and extracting the data, it exists in a variety of different forms for use on many platforms and with varying levels of support. Familiarity with the main types can help a buyer quickly whittle down the copious options to a handful of relevant choices.

Free Open Source HRM Software

Human resource management software does exist in open source versions which are free to download and use. However, these programmes are often very generic and your HR staff will need to spend a long time customising them for use in your specific country with its particular national holidays, employment laws etc let alone for your specific company. You’ll therefore also need HR staff who are technically competent. There are usually options for set-up and support from the software provider but this is charged for at rates comparable with other solutions.

Web Based HRM Software

Accessible from a web browser on a computer in any location, web based human resource management software does away with the need for servers and technical know-how, making it an ideal solution for a small company with little in the way of IT resources. The data is all stored on a secure server provided by the software company and you input, edit and access the data via their web based system. Essentially you’re purchasing a service, not the software itself, and support is usually included (this method is often called software as a service or SaaS). You can also normally pay-as-you-go or pay per employee so you don’t have to commit to a long contract. The software will normally be automatically updated. With a web based solution it’s important to get assurances about security of data and guarantees of service (you don’t want the system to be unavailable for long periods).

Off the Shelf HRM Software

When you buy a human resource management software package from a software vendor you’ll need to host the software on your own IT system. This will normally mean you’re running a network of computers linked by a server where the database will be hosted, but single PC packages are available. Each PC on which the software is installed will require a separate licence so costs can easily escalate for a large HR department. The chief advantage of an off the shelf system is that you’re not dependent on an outside company for the reliability of service and, if the database is SQL, data can easily be imported and exported which makes integration with Microsoft Office and third-party payroll software much easier. Full set-up and installation is normally available from the software provider as well as ongoing help-desk support.

Tailored HRM Software

Larger organisations normally have more complex and idiosyncratic HR operations which require a tailored human resource management software solution. Here the software or HR services company will be able to tailor existing software exactly to your requirements, set up integration with time and attendance, payroll or accounting software, adapt the software for use over a company intranet and even set up a multi-national HRM system which can be used in several territories worldwide. Obviously the most expensive of the options described, a tailored solution offers all the flexibility a large organisation requires.

Choosing a Human Resource Management Software Package

Determining which package is most appropriate for your company will depend heavily on your business’s unique circumstances. HRM software can be expensive so it’s important to build up a watertight business case for the solution you’re thinking of installing. If you can’t do this, you probably need to reign in your expectations. But how do you assess the expected benefits of an HR software solution? Think about:

  • How much time it will save you on mundane, repetitive tasks that can be automated
  • Potential cuts to staffing costs that will result
  • Improved efficiencies which cut out bottlenecks, extra meetings and costly errors
  • Intangible benefits like improved staff engagement and morale (especially in HR)

The right human resource management software can dramatically boost the efficacy of your HR functions and, because HR communicates with and is relied upon by every single person in your company, this really does filter through the business. But it’s not a decision to rush into. Consider carefully which of the above packages is most appropriate for your company and gather several quotes from different suppliers. Product demos are offered by most HRM software suppliers so take advantage of these but don’t be rushed into a purchase – ultimately the software has to improve your business so if you’re not convinced keep looking.


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