HR Software

It's a cliché, but the most important asset of any business is its people. HR software allows you to get the most out of your human resources by streamlining complex administrative tasks and maximizing your use of employees' time and skills.

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HR Software Overview
Human resources is a complex field. Most employees only notice HR when applying for a position, or when something goes wrong – a mistake on a pay slip, or an adjustment in a flexi time system, for example. But the truth is that businesses, both employer and employees alike, depend on an efficient HR system to administer all sorts of aspects of day-to-day office life.

In times past, companies would perhaps be able to rely on a small team of HR professionals to administer all these functions; for smaller businesses, the necessity of curbing costs would lead them either to skimp on HR or outsource those functions to outside agencies, with consequent loss of control and face-to-face relationships. HR software has changed all that, giving businesses of any size the ability to control their own HR functions without the need for a large specialized staff with all the expense that entails. Indeed, it’s not going too far to say that HR software has revolutionized the way businesses work, and gives employers and managers the ability to marshal their human resources much more effectively than they have done in the past.

Human resources software, also known as HRMS (human resources management systems) encompasses a range of different functions from payroll and expenses to training and skills management, and across a variety of different IT platforms to suit every type of company. For that reason, as we’ll see later on, it’s important to choose the right type of HRMS for your business.

Payroll management
In general terms, HR software functions fall into four categories that mirror the four aspects of most concern in commercial human resources. These are: payroll, including the payment of taxes and expenses; time and labor management; benefits, such as pensions, health insurance or employee share schemes; and HR management, which covers all other aspects of human resources from application to retirement. Let’s take a brief look at each one in turn.

Payroll is the human resources function that most employees are most familiar with – for obvious reasons! If you’ve ever been in the situation where the monthly paychecks have been delayed, you’ll be aware of the inconvenience and unhappiness this can cause – and, in a large company, it can be a disaster. Of course, there may be occasional payroll glitches, whatever system or HR software you use, but for many people payroll is the first HR function they encounter and certainly the most important. It’s vital, therefore, that whatever HR software you use is able to process payroll details simply and efficiently. This also applies to functions like tax deductions and end-of-year tax reports, which are very important, not just for employees’ benefit, but your own. Finally, good HRMS will enable employers and managers to administer expense accounts or reimbursements straightforwardly and efficiently.

Time management
The second major job of HR software is time and labor management. This is particularly important in larger companies where large numbers of employees are clocking in and out, or where businesses operate flexible working arrangements with their staff. For the small business that may employ only half a dozen members of staff, it is easy enough to keep track of where employees are, and flag up any problems with attendance, sickness, and the like. In a larger company, this is far from easy. HR software allows you to integrate a modern swipe card system with your time management software, and additionally, allows employees working from home or remotely to clock in and out online. It also allows employees to check the accuracy of timesheets before submitting to HR, which helps save time correcting mistakes or making adjustments.

For managers, the benefits are obvious; tracking a large workforce through production of attendance reports for groups of employees, and comparing attendance and sickness statistics across entire divisions, which allows you to pinpoint workplace issues and monitor employee activity. It also permits the monitoring of individual workers to draw attention to specific attendance or sickness issues without impinging on privacy.

HR software compresses these and other potentially time-consuming tasks into databases, spreadsheets, and customized reports that managers can access quickly and easily. This also saves valuable administrative resources, freeing up HR professionals for more important tasks.

Administering employee benefits
HR software also permits the quick and easy administration of employee benefits such as healthcare schemes and share options. Modern human resources software allows employees to take the lead in self-administering employee benefits, which again helps to free up HR resources for core functions. Employees can log on, compare different benefit plans from different providers, or check on their medical, dental, or 401K plans online. Details can also be provided online, saving on paper and storage costs.

For employers, using HR software to administer benefits frees up administrative time for more important business jobs. A lot of the paperwork, which is the inevitable companion of employee healthcare and benefits plans, can be automated, and you will find very soon that HRMS packages pay for themselves.

Further functions
Into the “other” box, we must allocate some of the most important jobs of any HR software package – functions which may not loom large on the radar of employees in their day-to-day dealings with HR, but which are nonetheless vital for managers and employers in seeking to maximize the human capital available to them.
HR software is the best way of collating basic data about employees such as demographic data and contact details, but it goes a lot further than that. A good HRMS package allows you to build a “skills profile” of each employee, helping you deploy resources to best effect. HR software also makes it a lot easier to identify training needs in conjunction with line managers, and the best HR software applications. In fact, allow this entire process to be managed online, allowing the identification of training programs, training scheduling, and enrollment all to be administered swiftly and easily, avoiding timetabling clashes and the like.

HR software also plays a large role in the applications process. If you’re involved in recruitment for a large company, you’ll know how time-consuming the process of hiring new staff can be, and it’s difficult to assign enough time to properly evaluate all the applications you receive. The temptation is to outsource these functions to recruitment consultancies, but HR software allows you to streamline the application process and retain control over the recruitment process by identifying and shortlisting candidates based on exactly the criteria you specify.

Does my business really need HR Software?
If you’re a manager in, or owner of, a smaller business, you may think that you don’t need a comprehensive HR software package to manage your human resources needs. In some cases, you may be right. However, even the smallest companies benefit from automating certain aspects of human resources; it’s a rare business that doesn’t use some form of HR software – for example, payroll software to quickly calculate tax deductions and produce monthly pay slips, or a spreadsheet to record applications for a new post you are advertising.

It’s certainly worth stopping to consider if buying a top-end HR software package will be worth the money, not to mention the time spent training staff to use it. In general, it’s worth thinking about it this way; how much time is currently taken up each month administering HR functions such as training, payroll, staff benefits, and recruitment? As the total time creeps up, so does the potential benefit of using HR software to streamline and simplify these jobs.

Training in the use of HR Software
A good human resources software package will minimize the technical knowledge required to use it; most applications are “point and click” style programs that use simple menu-driven interfaces. After all, the job of HR software is to make everyday human resources tasks easier, not more complex.

It’s reasonable to expect that administrators will need some training on the proper and most efficient use of any new HR software package. In fact, you’ll find that many HRMS providers will include training on the system, either as part of the price or as an added extra. This is always a good idea; while good HR software is easy to use, it will also cover a wide range of sometimes quite complex functions, and only through proper training will you get the most out of it.

On the other hand, you should look for a human resources software system that makes “self-service” use by employees as straightforward and easy as possible. Training administrators in the proper use of HR software is one thing, but if you are being forced to put every single one of your staff through rigorous training, simply in order to allow them to change their contact details or access timesheets, then you’ve probably purchased an HRMS package that’s asking too much of them. Complexity of function must be allied to simplicity of use, particularly where non-HR staff are concerned.

Costs
It’s all but impossible to generalize about the costs of HR software, partly because there’s a bewildering range and variety of products available for you to purchase, and partly because different programs cater to different parts of the market. Some HR software is extremely specialized, designed for particular types of businesses with specific HR needs. Other HRMS packages are focused on a particular function of the human resources team; for example, there is a plethora of payroll software on the market that is professional, but will not be of any use when you are recruiting for a new regional sales manager.

For this reason, it’s hard to give a guideline price for HR software. But in this, as in so many other fields, of course, you get what you pay for. If you run a small business, there are simple pieces of HRMS software available for under a couple of hundred dollars, and they may help with functions like payroll and employee contact information, but they will necessarily be limited in their scope and application. At the other end of the scale, the biggest companies regularly spend over $100,000 on HR software tailored to their specific needs and requirements. The point to bear in mind is that HR software should be seen as an investment that will reap dividends in terms of savings on administration and in improved performance. You wouldn’t hesitate to take on an extra secretary for $20,000 a year, so why does $10,000 on a comprehensive HR software package suddenly seem prohibitive?

HR Software for larger companies
As previously discussed, a wide range of HR software is available in today’s market, and the choice can be bewildering. However, as a general rule, the larger your business, the more you stand to gain from an easy to use and comprehensive HRMS package that can take on the sorts of administrative functions that have been discussed in this article. If your HR software allows quick and easy access to employee records, time and attendance information, and streamlines calculation of taxes, deductions, and employee benefits, it can quickly pay for itself. At any rate, no large company can afford to be without good HR software, if it wishes to make the most of its human capital.

As a larger employer, you should be in a better position to seek out the best in software solutions for your HR needs. Demand the best of software suppliers. Contract with a software supplier, not just for the program itself, but also for training and technical support to get the most out of your investment. Ensure that you are purchasing a HR software package that is fitted to your needs, rather than the other way round. Look at your rivals and ask what HR software systems they are using, and whether they are doing a good job. Remember the cliché with which we opened this article; the most valuable asset in any business is its people. Make the most of it.


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