The simple HR software guide for medium-sized businesses

HR systems support and enhance an organisation’s HR activity. These activities can include employee lifecycle management such as onboarding and performance management, as well as fundamental HR administration including policy acceptance and payslip management. HR systems allow HR teams, managers and employees to collect, store and report on relevant people data, including organisational policies and processes, location details, and entire workforce documentation. All this data is captured and stored safely and securely. HR systems are also able to automate some HR tasks, and streamline key people-related processes such as recruitment and employee onboarding.

Thanks to technological advances, these systems are becoming increasingly sophisticated and can be adapted and flexed to meet different organisations’ requirements as they evolve and grow. Popular functionality within HR systems includes:

• Employee record keeping
• Recruitment
• Onboarding
• Absence management
• Training and staff development
• Expenses management
• Document management
• Time and attendance logging
• Payroll administration
• HR compliance
• Employee surveys
• Succession planning
• Multiple languages
• Configurable branding
• Internal communications
• Performance management
• Health and safety records
• Employee benefits
• Safeguarding
• Identity and background checks
• Policy acceptance
• HR case management
• Learning and development (through learning management systems)

The most effective HR systems integrate seamlessly with the software that organisations use outside the HR function and that rely on up-to-date, accurate data about the organisation’s people using it. Integrating HR systems with these other platforms through Application Programming Interfaces (APIs) enables organisations to eliminate duplicate data entry and streamline tasks across all business units.

HR systems pricing can vary significantly, and is often determined by key factors including:

Complexity of the product

Complex HR systems tend to have more features and functionalities — such as benefits administration, performance management and compliance tracking — which in turn drives up the price tag. Customisation is another price influencer, with fewer configurability options often correlating with a lower cost. Integration capability with other software such as payroll, recruitment, and onboarding can also impact the price of HR systems.

Size of your organisation and number of employees

Larger organisations with more employees often require HR platforms with complex functionality, integration capabilities, and customer service and support. Often, HR system vendors charge on a per employee basis, so higher headcounts will naturally cost more. It’s important to evaluate your business needs to select the most appropriate option for your current and future organisation size.

Deployment method (cloud-based vs on-premise)

Cloud-based HR systems — hosted on remote servers — are typically available on a subscription model where customers pay a recurring fee (as well as a setup fee for implementation) and the vendor remains responsible for maintaining the server environment and deploying updates. On-premise HR systems place the onus of hardware maintenance, infrastructure updates and IT support on the customer, and as such cost less.

Level of customer support and training required

HR system vendors that offer a more basic level of support may charge a lower price, but it’s important to consider the value of the support and training that allows your business to use the product effectively. In some cases, paying more for an HR system that includes support and training may be a better long-term investment than opting for a cheaper solution with limited support.

As is the case with any software investment, it’s essential you identify the best option for your organisation based on your current and future needs. In doing so, it will save you significant time, money and anguish in the long run.

Start by taking a step back and assessing the HR system landscape while also factoring in any budgetary, technology and time constraints you may have. Define your HR challenges and how you want the system to tackle them, and identify both your technological and business requirements. Your should also seek input from across your organisation, and find out what other systems and processes other departments use that rely on up-to-date, accurate data about their people.

Once you are clear on your objectives and requirements, create a shortlist of suitable HR system providers and obtain all the information you need in order to make an informed decision. Take advantage of demo opportunities and review customer feedback such as case studies and reviews. For more guidance on making sure you select the right solution, read our Top 10 HR system selection mistakes – and how to avoid them.