How to Choose the Best HR System Software: A Guide

Many HR departments are currently feeling the pressure of the “Great Resignation” trend, with over half of all employees experiencing a skills shortage in their business. 

With your business potentially exposed to broader global trends, what action can you take to support your HR team in 2022?

One answer is to invest in cutting-edge software that will give your HR department the tools and data it needs to perform.

To help you do that, read through our comprehensive guide on choosing the best HR system software for your organization.

Why Invest in HR System Software?

Perhaps you haven’t thought about purchasing an HR system before. If that’s the case, it’s probably helpful to understand why businesses adopt HR systems and what benefits you might expect to see in your company. 

HR Software Saves Time

The more you automate, the more time you save. In HR, that will cover small but frequent tasks.

For example, small HR administrative tasks may include absences, time tracking, or booking staff training. You’ll free up your HR team for other critical functions by investing in software. 

You’ll Have Happy Employees

Yes, good HR software and systems can boost staff morale! For example, your team won’t have to handle calls on vacation because you’d forgotten they are on annual leave. 

It Helps HR Teams With Future Planning

Once you have HR information in one system, you’ll also have lots of data to hand to help your HR team become more effective in their roles. For example, you can monitor qualifications, identify knowledge gaps, and book training. 

It Provides Your Organization With Better Data

Good HR depends on accurate employee data. Having that to hand in one system will help your senior management team, HR personnel, and the rest of the organization. 

Before You Begin Your Search

HR software is a significant investment. It needs careful planning, so here is what you need to do before you create your shortlist of software. 

Your Business Goals

First, consider your high-level business goals. HR should form part of your overall business strategy. You’ll want to make sure your HR software aligns with your broader business goals. 

Here are some helpful prompts to guide you when putting this together:

• Are you expecting cost savings, and if so, how much?
• Do you want the software for your HR team or the broader organization?
• When do you want the software in place?
• How will the software help you with your business goals in the coming year?

Some senior management teams will also want to see a formal business case study at this stage. That business case will outline the potential costs of a new system and the potential financial benefit of implementing the new system.

In other words, it should demonstrate a positive ROI (Return on Investment) and when the company can expect to see that financial return. 

Once you have established a clear idea of how the software will align with your business goals, it’s time to break this down further. Next, we’ll explain how to write a list of requirements. 

Stakeholders

Good software rollouts need business-wide support. You can achieve that by speaking to some of your key stakeholders when putting together your list of requirements.

Stakeholders might include your senior management team, the HR department, and employees in other departments. 

Ask each person or group what they most want to see in the new HR software. Get them to think about how it will benefit their team or role rather than how it will work. 

Create a Feature List

Now it’s time to establish your requirements.

You should have a good idea by now of what your organization expects from HR software. You can use this to put together a set of features or benefits you want from the software.

Here are some standard features to help get your list started:

• Payroll and related administration (e.g., tax calculations) 
• Appraisals and performance monitoring
• Annual leave booking and management
• Time tracking and overtime
• Features to support your recruitment processes
• An employee portal holding all their relevant employment data
• Non-salary benefits management
• Training and qualifications
• Promotions and career paths
• HR reporting

Try and put these in order of priority. That will help you when creating your shortlist, as few (if any) tools will tick every item on your list. 

Don’t forget about non-feature requirements too. That might include price, licensing model, usability, and rollout complexity.

You might also want to consider whether you prefer in-house, cloud-based, or SaaS (software as a service) solutions. The latter two tend to be quicker and simpler to implement. 

Be realistic with your wish list at this stage. You’ll probably have a maximum budget, and you will probably find that some of your requirements need to go on a “nice to have” list instead of a “must-have” list.

Be honest and ask if you can drop some of your requirements at this stage, as that will help you find a better (and quicker) match for your organization. 

Creating Your HR Software Shortlist

Once you know what features you want from your HR software, it’s time to start your search. Here are the critical steps to finding the perfect software for your business:

Start With Recommendations

Speak to peers and other similar-sized businesses and ask for their recommendations.

Your business connections will likely tell you plenty of helpful information, including rollout compatibility and usability. They’ll also give you their honest thoughts on whether the software is value for money. 

Do a Features Search

Work through your list of features (in priority order) and start to get a shortlist of some of the HR systems that tick the relevant boxes.

Most software tools will have a detailed outline of their features on their website, like the features shown here on the WorkBright.com platform.

That takes time, so make sure you use someone in your organization who can dedicate several hours to carrying out this search.

You won’t want to miss out on discovering the software that might be the perfect match for your organization. Try to research at least ten tools and, ideally, around 20. 

Create a Matrix

As you start reviewing software features, you’ll begin collating large amounts of information.

The best way to handle and compare this is by creating a matrix that compares each software against the features you need. Add any other relevant points, too, including the price. 

Once you have this matrix, you can start to reduce the size of your shortlist. Remove any software that doesn’t include at least your top 5 requirements. 

Book a Demo

Your next task is to determine if your shortlisted software will live up to the big claims on their corporate websites.

The best approach is to get a sales representative from each company to run a demo for your organization for at least 5 HR systems on your shortlist. 

Before arranging the demos, you’ll need to decide what stakeholders to invite from your organization.

Have at least one decision-maker, one HR manager, and one HR employee. Also, invite a representative from your IT team who’ll be responsible for rolling this system out into your organization.

If you have someone in your business who is responsible for internal training, invite them too.

Make sure you prepare a long list of questions during the demo. It’s your chance to see the pros and cons of each tool. Use this opportunity to view as much of the system as possible. 

Prepare an evaluation sheet for each attendee, including a score sheet, and ask them to complete it after the demo. That will give you an objective way to compare each software tool your team reviewed. 

Evaluate Your Shortlist

After the demos, it’s time to make your decision. Return to your original requirements and begin to evaluate each software in turn. If you can, use a scoring system to help you compare like-for-like.

You’ll also want to note the pros and cons of core features. For example, one may have advanced reporting that is difficult to use. In contrast, another platform has basic reporting that is easy to use.

It’s hard to judge this like-for-like, so note down these differences as you go so you can refer back to them later.

Ask if your business has the time and resources to utilize every feature on offer as part of the best software on your list.

Time tracking might be a great feature. Still, suppose you aren’t already tracking time as an organization.

In that case, you’ll need to factor in a significant cultural change for the organization. It will need to become an everyday habit for your staff.

That is also an excellent time to research the company selling the software before you decide. Here are some questions you’ll want to answer:

• Does the company have great recommendations from past customers?
• What sort of customer service and ongoing support does the company offer?
• Are they a new or established company? If they went bankrupt, what would that mean to future software support? 
• In which timezone do they operate, and what would that mean for support issues? 
• What experience do they have supporting a business similar to us (in size and industry)?

You probably want to add other questions to this list. The point here is that you want a dependable company, so do as much research as possible when running your software evaluation. 

Finalizing Your HR Software Choice

Now it’s time to make your final decision. But there are a few more steps to take before that software is ready for your HR team. Here’s what you’ll need to do next: 

Ask for a Follow-Up Demo

Your first demos will probably happen remotely. But once you’ve chosen your preferred software, it’s worth asking the company if they will run another demo, this time in person.

That is beneficial because you’ll probably have further questions to ask, and it’s also the perfect time for senior stakeholders to view the tool in action before they sign off on the budget. 

Negotiating Price and License Terms

Most big software companies will have transparent pricing and terms outlined from the start. Many of these prices will be non-negotiable.

However, that’s not always the case, especially if you buy as part of a large organization. It’s always a good idea to speak to the sales representative and find out what they can offer as a discount.

Rollout and Timescales

Depending on your chosen software, rollout might be lengthy or straightforward! If you select a SaaS model, you won’t need to install the software in your organization.

Otherwise, you’ll need to factor in time and resources to roll out the software.

You’ll probably want to assign a project manager to oversee the rollout and agree to timescales with the software company and your business stakeholders.

Don’t forget about added complexities from introducing new software, such as transferring data from your old system onto your new one. 

Training and Communications

One of the questions you must ask during the evaluation stage is whether the company offers training in the software.

Many software providers will offer a train-the-trainer model. They train someone from your team who will then run training sessions with the rest of your organization. So think about the time and resource implications of that.

You’ll also want to communicate the rollout to the rest of the business. Let the team know about all the exciting features and changes they can expect once this new HR software is in place.   

Are You Ready to Discover the Best HR System Software? 

A great HR team is critical to any growing organization. So you’ll want to invest your time in searching for the best HR system software to give your valuable team the tools and support they need.

Use this guide as your starting point in your search, and take time to find the system that will add the most value to your organization. 

For more tips on getting the right software for your business, head to our science and technology section now.