Why is HR software important?



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6 mins


The right HR software can help your organisation streamline workflows, improve efficiency, and enable HR to act as a strategic partner

Investing in HR software can be a crucial step for organisations that are looking to streamline processes and improve efficiency, whether they are embarking on a period of growth or have reached a size and complexity where generic software (or manual systems) are no longer able to cope with the administrative strain. HR software – which enables HR teams to carry out essential functions and tasks electronically, with some degree of automation – typically increases the productivity and efficiency of HR teams, line managers, and employees. But when questioning why HR software is important, it’s also worth considering the broader ways that HR systems can add business value.

The fundamental functionality of HR software usually includes employee and manager self-service, and recording employee data (such as job, pay, addresses, personal information, holiday, and absence information). An HR system stores your people data securely in a single location – removing the need to store your data in multiple unsecure locations such as email, Microsoft Excel or Google Sheets, or even on paper in a filing cabinet – enabling greater data security and helping you better comply with the GDPR. However, these days, HR software is also capable of much more.

In this article

Why HR software is important

HR software is important for maintaining the privacy and security of employee data such as addresses and bank details. HR software is also important for enabling growing businesses to scale – so managers and administrators can automate as many basic functions as possible, and focus their efforts on more important tasks. HR software that features self-service access for employees empowers them to look after their own data, submit absence requests, and monitor their performance, for example.

The strategic benefits of HR software

As organisations grow, HR teams and senior leadership need to have greater visibility of their workforce so they can make the right decisions. HR software can provide this overview, and can also enable growth, productivity, and performance – enabling HR to act as a strategic partner to other business functions, and focus on delivering an excellent employee experience.

By being able to easily find, analyse and report on people data, HR teams (and the senior leaders they support) can make smarter, strategic, and more timely decisions – helping to improve the reputation of HR within the wider organisation as a result.

Self-service HR gives employees the power to manage and update their personal information, request holiday, and enter absences. This level of responsibility can help employees feel valued, boosting productivity, performance, and employee retention.

Investing in HR software that is user-friendly, straightforward, and accessible on mobile devices can help employees better engage with processes such as appraisals and objectives setting – activities that contribute towards better organisational performance and higher retention of talented employees.

Without HR software, your people data could be at risk. The rise in hybrid and remote working has led to a rise in cyberattacks – putting your people data at risk. HR software – particularly those systems that support two-factor authentication – will help you more effectively guard against potential attacks and protect sensitive information.

How HR software automates processes and improves efficiency

HR professionals, line managers and other employees can save time on manual and labour-intensive tasks thanks to HR software – such as Ciphr HR – that streamlines workflows and automates tasks and processes, giving them all more time to focus on the activities and initiatives that really matter.

One organisational process that can really benefit from HR software is recruitment. Applicant tracking systems (ATS) streamline the hiring process through automated emails, auto-reject questions, and self-service interview scheduling, making it easier and quicker to hire the right candidates. Find out more about integrating HR and recruitment software.

If you invest in HR software that integrates with other third-party apps, you can automate the recruitment process further. For example, artificial intelligence (AI) technology can match job adverts to candidates who are the best match for your organisation based on words used in job descriptions and CVs. Without specialist software, organisations – particularly those who are growing rapidly or hiring in volume – will find themselves rapidly bogged down by labour-intensive hiring processes.

HR software can also help strengthen the relationship between HR and payroll teams. With integrated HR and payroll software from Ciphr, for example, details of new hires, leavers or changes are automatically transferred from the HR system to the payroll software – removing the need for HR and payroll teams to carry out additional admin work as well as mitigating the risks or manual data transfer.

Similarly, the relationship between HR and L&D can also improve thanks to HR software. If organisations use an LMS that integrates with their central HR software, employees will be able to easily navigate their learning journey by identifying and booking relevant training courses themselves – helping employees take ownership of the development of their knowledge and skills.

Do I need HR software?

As organisations grow, they’ll reach a size and complexity that makes HR software absolutely critical to their success and productivity. You might even find that you need a specialist HR system before you hire your first in-house HR manager. There are hundreds of different HR software applications on the market, so look for one that meets your current and future needs – and, of course, your budget. Ciphr HR, for example, is designed to meet the needs of growing small and medium-sized organisations, which typically have between 200 and 1,000 employees. Not sure how your organisation’s size might affect your HR software needs? Read our handy explainer: How do HR systems differ in small and large firms?

Hopefully, we’ve convinced you that modern HR software is essential to your organisation’s success. Want to find out how Ciphr HR stands out from the crowd, and how we can help you solve your challenges?  Request a demonstration today.

This article was originally published in September 2020. It was updated in August 2022, and again in May 2023, for freshness, clarity, and accuracy.