How to Choose HR Software for Your Business?

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When it’s finally time to get an HR software for your business, you will be surprised at the sheer number of available options. It can be overwhelming trying to pick out the one option you need. Then, there is the fact you need to choose between HRIS, HRMS, and HCM options.

It can all be a bit too much, but not to worry, we are here to help.

We are going to help you through this, and by the end of this article, you will know how to choose the right HR software for your business.

Determine your needs

For your business to invest in a new HR system, you need to be sure that it will meet all your needs and that it will add something useful to your business. Just adding technology to your current process is not enough to justify the investment of time and money into a new HR system.

That’s why the first thing you should do is to learn more about the problems you need the HR software to solve and the needs it should fulfill.

You could also have an HR system already in place but are looking to upgrade. In this case, you need to take a look at it and start finding out what works, what doesn’t work, and what do you need that this solution doesn’t offer.

Something worth considering is whether it’s cost- and time-effective to change the solution altogether or is it better to find a way to improve it. Ask your team, your employees, and search the internet on how you can get more out of the current system in use if that’s possible.

You should also take automation heavily into consideration. Automation is indeed a game changer, and you want a solution that can automate as many tasks as possible. Automation can save you a ton of time and money. The benefits of automation are remarkably similar in HR and marketing, so you could learn more about the benefits of Automation for HR by checking out these 15 Benefits of Marketing Automation for Business.

Have High, but Realistic, Expectations

While deciding what you need from the HR system, you should remember that you should keep your expectations high, but not too high that it’s not realistic. Yes, you will be surprised by what current HR systems offer, and some of the features they offer seem to be too good to be true, but that doesn’t mean you expect the impossible out of it.

When implementing a new HR system, too many people have either low or very high expectations of the software. The key thing to keep in mind here that an HR system will indeed do a lot for you, but it won’t do everything.

Here’s a tip: Prioritize your needs

Prioritize your needs as essential, needed, and nice additions. Try to differentiate between what you need, what you want, and what you fantasize about.

It’s important to discuss all of this with your team, so you are all on the same page. Your team members will each have different expectations about the software, so you should set things straight before moving on.

Set a budget

Depending on the size of your business, the complexity of the system needed, the features you want, the number of employees the system needs to manage, and the vendor, the cost of the HR system can vary significantly.

Small businesses can get away with free or very low-cost HR systems, while large companies can pay thousands in the HR system.

While setting a budget for the new HR system, you should keep in mind that you don’t need to spend a lot, but you will need to invest in getting the features you want in an easy-to-use package. For example, while doing your research, you will find plenty of options in the 5-to-10 thousand dollars price range.

However, the reason these are so expensive is that most HR systems offer standard HR functions such as attendance and compensation, this offer more advanced functionalities and features such as managing and tracking benefits and regulatory compliance.

Pay Attention to the essential integrations

After choosing the features, you need to pay attention to the integrations, because some of them can change your experience using the software entirely.

Let’s take payroll integration as an example here, since it’s the most crucial integration you will need to have with an HR system. You should go for HR software that integrates seamlessly with popular accounting or payroll solutions.

If you are already using an accounting/payroll solution, which is very likely, then you need to make sure the software you choose can integrate quickly and effortlessly with this software.

This integration means you will eliminate data entry from the process and be able to provide consistent information across your business since the HR software will be able to import all your existing data from the other system automatically.

Think About Customization

No matter how much an HR system costs, there is nothing as a perfect software package. It may suit your needs, but it will never be perfect. This is why you need to think about customization.

HR management solutions providers do their best to cover all bases by offering all the features they think businesses need built-in their software. However, you will still need some things to be custom-built for your business as these can make your workflow that much smoother.

This can be done with customization options. For example, you will need certain things in your reports or a specific screen layout, so if the solution enables you to customize the fields in your reports or the layout elements to your needs, it will make you more productive and efficient.

Customization options also give you headroom for future changes that will, inevitably, happen to your business. Which means you reduce the chances of you having to switch to another HR system in the future because you will be able to make modifications to the system and have it still meet your needs even if with the changes in your organization.

Start your search & Narrow it Down

Now you know exactly what you need out of the software, it’s time to do your research. Start with Google, visit the vendors’ websites, and talk to salespeople. Try to learn as much as possible about each solution.

Make a list of the available options and work your way down to the best five, four, or three options. These should meet all your needs, fit the budget, and be suitable for your business & industry.

If you are a startup or a small business, you can start by checking out these 10 Best HR software for Small Business & Startups in 2019. These solutions are free or cost very little while offering features that are similar to those provided by the most premium HR systems around, and they can give your business a real competitive edge.

Try them out for yourself

After narrowing down your list to only three-to-five solutions, you should check out the options for yourself before committing.

Just reading reviews online and talking to salespeople are in no way enough to make a decision. You should talk to other users of each solution and let them tell you about their experience using the software.

Don’t know anyone who uses the software? Ask the vendors! Ask each vendor for a recent client list and contact those that seem most similar to your business.

Then, you should try the software out for yourself. You will find that most vendors offer a free demo upon request, so you can check what they offer more in-depth. It’s important to try and pick out the issues or problems because you don’t want to invest the time and money in implementing and setting up the solution only to be surprised by some hidden problems.

Watch out for hidden fees

Some software companies play a tricky game with their pricing. You will find that some providers offer basic functions but then, after actually purchasing the software and implementing it, find out that you need to pay for some features you thought were included in the package.

It’s like buying a house and then finding out that the doors and windows are extras and you need to pay more to have them installed. It’s a no-brainer that the house comes with the doors and windows, but it’s a bit more tricky with HR software.

Have a lengthy discussion with the salesperson or vendor representative about what the package you are buying offers and what you will need to pay for. Ask every question you need to ask, and it’s not something that should be rushed, and make sure you understand exactly which features are included in their core pricing and which ones need to be purchased separately.

Consider the time of setting it up

In the business world, time is money. A software that needs less up-front customizations is one that will be set up more quickly.

One more thing to consider is how easy the software is to use. Which would you rather? Software that can be set up in a day but is so complex and difficult to use that every employee needs a week of training to use it or one that can be set up in two days, but your employees can start using it right away because it’s so intuitive and easy to use.

That’s it! Congratulations, you now know all the basics of how to choose an HR system for your business. As you can see, it’s not easy, but it’s not mind-bogglingly tricky, either.

It will take time and effort, but it’s worth it if you want to choose software that will push your business forward.

What are the most important features in an HR system in your opinion? Leave us a comment below with your thoughts!

Posted in HR Software

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