What is HR software? Five things it is - and one it isn’t

In today’s modern workplace, human resources (HR) departments are no longer just about hiring, firing and managing employee benefits. With the rise of technology, HR has become more streamlined and efficient – largely thanks to HR software. 

But what is HR software exactly? In this blog post, we will explore what is it (and isn’t), its benefits and how to choose the right software for your organisation. 

In this article

What is HR software?
HR software is an HR team’s best friend
HR software is a communication tool
HR software is an essential tool for compliance
HR software is a way to analyse data
HR software is automated and self-serviced
HR software is not one size fits all
How does HR software work?
Do I need HR software?
How to choose HR software
How much does HR software cost? 

What is HR software?

HR software, also known as human resource management systems (HRMS), HRMS software, or HR systems, is a type of software that streamlines HR-related tasks and processes. Typical features of HR software include:  

• Providing a centralised location for all HR or employee-related data such as job and pay information, and addresses 
• Manager and employee self-service access to their own records (and those of people they manage) 
• Ability to request and manage types of leave, including holidays and sickness absence  
• Reporting on people data, to help inform decision-making 

More advanced HR software can support additional HR functions (often through integrations with other, specialist software), including: 

• Payroll processing 
• Benefits administration 
• Time and attendance tracking 
• Recruitment and onboarding
• Performance management 

One of the primary benefits of HR software is that it saves time and improves efficiency by eliminating manual processes. It also helps ensure compliance with employment laws and regulations, provides better data accuracy and enhances the employee experience. Additionally, HR software can provide insights and analytics that help HR professionals make informed decisions about employee management and strategic planning. 

HR software is also… 

1. An HR team’s best friend  

The right HR software is an essential part of your HR team’s toolkit. It should simplify and streamline their workloads, reduce time-consuming and manual administrative processes, and enable your team to focus on more strategic tasks. Not only that, the software will enable your HR professionals to access all HR data in one centralised location, making it easier for them to manage and review information. Integrations between your HR software and other people management systems – such as payroll software – will make data transfer more secure and accurate, too, giving added peace of mind. 

2. A communication tool 

HR software is an excellent way for the members of your organisation to communicate with one another, from sharing company-wide policies (such as employee benefits and health and safety procedures) to personal documents (like an employee contract). Staff can easily access documentation in one central spot, without having to ask HR to send a copy over or waste time searching through a disorganised shared company folder. You can also be confident that every person has access to up-to-date documentation, and track which individuals have read and digitally ‘accepted’ important policies, such as sickness absence and data security policies.  

Line managers and employees alike will find HR software particularly useful for enhancing communication. Employees can use it to book holiday and log sickness and other absences directly, which managers can then easily view and monitor. HR software also gives managers a bird’s-eye view of which members of their team (and other teams) are off at which times, so they can better plan if the right people are working at the right time. 

It can also help streamline performance reviews, with managers and employees able to use a single platform to communicate about, collaborate on, and record performance goals, accomplishments and areas for improvement. 

3. An essential tool for compliance 

From supporting GDPR compliance and background checks to proof of address and right to work checks, HR software is a critical tool to ensure your organisation stays compliant with regulations and legislation. HR systems can help reduce the risk of non-compliance by increasing your HR team’s ability to record, manage and track information securely. Not only that, it can improve data security through features such as single sign-on, different access levels for different employees, automatic account deactivation for leavers and more. 

4. A way to analyse data 

HR software can help manage and analyse data through configurable reports and data analytics. Proper data analysis is important as it helps organisations with everything from making more informed decisions and monitoring results after interventions through to keeping track of key performance indicators (KPIs). 

Human resource management software such as Ciphr HR can help with analytics and reporting in areas such as:  

• Producing gender pay gap reports 
• Absence trends 
• Employee demographics 
• Performance 
• Compliance 
• And much more 

5. Automated and self-serviced 

Gone are the days of having to waste valuable time manually keying in data and information or sending out reminders and notifications to employees – after all, what is HR software if not a time saver? HR software can help streamline repetitive jobs through automation, such as sending out prompts to managers about tasks such as probation reviews, appraisals, and even new starters’ IT setups. It can also help to standardise and simplify critical processes such as onboarding administration – helping you to create a consistent new starter experience, while also allowing new hires to share important personal information before their first day.  

In the same vein, HR software, such as Ciphr HR, typically provides self-service access, enabling individuals to manage, maintain and review their own information anytime, from any internet-enabled device. From updating personal information and requesting holiday to accessing online payslips, this puts the employee in the driver’s seat and saves the HR team and managers time and effort. 

6. It’s not one size fits all 

We’ve covered what is HR software – now it’s time to briefly explore what it isn’t. One of the most common misconceptions about HR software is that it will look the same for all organisations – but this just isn’t the case. Your software should be tailored to look and feel like it’s yours, and have all the personalised integrations you need. 

Ciphr HR, for example, allows you to use your own branding – including logos, colours, images and language – so that your HR software is visually representative of your organisation. You’ll also want to consider which integrations are most important to you. Most organisations will need their central HR platform to integration with applications such as payroll software, an applicant tracking system, a benefits platform and a learning management system, but consider any bespoke adjustments you will need as well. For example, schools may need their HR system to integrate with a school information management system.  

Remember, your HR software should make your life easier – so make sure your chosen solution features the integrations and functionalities that matter most to you. 

How does HR software work? 

HR software automates HR tasks and is typically a cloud-based platform. It provides a centralised location for HR data and uses various modules to handle functions like payroll, benefits and performance management. The software updates information in real time, reducing manual data entry, and employees can manage their own information through self-service options. HR software provides analytics and insights for informed decision-making, simplifies processes, improves data accuracy and enhances the employee experience. 

Do I need HR software? 

While smaller organisations (of under 50 employees) will be able to manage basic HR processes and employee data storage without using specialist HR software, growing organisations will rapidly find that their data security and processes become time-consuming and unmanageable without specialist HR data management software. For most organisations, HR software can provide significant benefits in terms of streamlining HR processes and improving efficiency by automating time-consuming tasks for HR professionals, improving communication between managers and direct reports, and ensuring data accuracy. Ultimately, whether an organisation needs HR software depends on their individual HR needs and the size of their workforce.  

If you’re trying to find the right HR software for SMEs, Ciphr’s solutions are specially designed to meet the needs of small- and medium-sized organisations looking to streamline processes and improve efficiency. Book a demo with our team of experts to learn more about what Ciphr HR can do for you. 

How to choose HR software 

You should consider the following when choosing an HR software: 

• What are your organisation’s specific requirements? 
• Can you build a business case about why stakeholders should invest?
• Which vendors seem like the right fit for you? 

You will also need to meet with specific vendors and review their system capabilities against your list of ‘must haves’ and ‘nice to haves’. Once you make a final decision, you’ll sign a contract and be ready to start using your HR software. 

Learn more about how to choose the best HR system in 2023. 

How much does HR software cost? 

Just as HR software isn’t the same for each organisation, neither is the pricing. A few key factors that impact cost include: 

• Your organisation’s size and employee headcount 
• How much implementation support and training you will need 
• The functionality and features of HR software

Delve deeper into HR software pricing. 

Are you ready to take HR to the next level? 

So what is HR software? In short, it’s a powerful tool that streamlines HR processes, improves efficiency, and enhances the employee experience. Choosing the right HR software requires careful consideration of your organisation’s needs, the features available within the different solutions on the market, scalability, cost and vendor reputation. Ultimately, HR software is an essential component of modern HR operations, improving efficiency and effectiveness for organisations of all sizes. 

Are you ready to invest in HR software? We would love to show you how Ciphr HR can help your organisation. Request a demo or download our brochure to learn more about Ciphr and our innovative HR solutions.