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What is HR software?
The growing HR management software market is forecast to reach $9.2 billion by 2020. Often referred to as HRMS), or Human Resources Information Systems (HRIS), HRM software is designed to streamline and automate a company’s Human Capital Management (HCM) through one central database.
Since this technology has evolved with the continually changing functions of HR departments, the market is now at an interesting turning point.
There has been little movement in traditional segments of the hr management software market, such as payroll, time and attendance, and benefits management, which means market growth and consolidation is being driven by emerging HR strategies as well as new technology and trends.
Organizations often cite the following five reasons for seeking new HRMS:
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New, better, faster technology solutions on the market (76 percent)
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Improvements to user experience (73 percent)
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Inability to get analytics (57 percent)
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Business goals cannot be addressed with current technology (54 percent)
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Unable to efficiently integrate with other systems (54 percent)
This desire for change and upgraded technology presents businesses with overwhelming options in a swiftly expanding market. There are both integrated suites with sweeping functionality and best-of-breed platforms for extremely specific tasks. This guide examines the three developing categories of HRMS based on features and business function, as well as prominent vendors, and progressive trends.
3 Categories of HR Software Solutions
I. HR Administration
It’s estimated that 58 percent of HR staff time is spent on administrative tasks – which does not include the additional 20 percent of time spent on activities related to reporting and compliance. HR Administration software is designed to streamline and automate the three traditional pillars of HRM: payroll, time and attendance, and benefits management.
Sometimes called Core HR, this segment has shown slow growth recently but continues to make up a large portion of the market. These platforms are generally available either as a package of integrated features or as separate modules focused on specific tasks.
Talent management systems
Whereas traditional Talent management systems (TMS) provide a central location and database for recruitment, employee development, and retention efforts. TMS are sometimes called applicant tracking systems (ATS) or even more broadly, “strategic HR.” They can be standalone or integrated with an HR Administration software suite to provide additional core HR functions.
TMS are largely responsible for the recent high growth of the HRMS market. This segment grew by 17 percent last year to become a $5 billion market. Such growth is not surprising when one considers that 83 percent of CEOs list talent management – i.e., managing skills, driving productivity, and retaining employees – as their number one priority. As traditional HRMS have automated many functions of traditional HR departments, many companies have re-purposed HR to focus on recruiting top employees. Businesses are now replacing dated systems and paper resumes for social media recruiting, online assessments, and real time analytics.
III. Learning Management Systems
Learning Management Systems (LMS) track an employee’s education, qualifications, and skills, then outline materials or courses available to develop those skills. Some LMS may function as a part of TMS, but many standalone options are also available.
The emerging LMS segment is one of the fastest growing segments of the overall market. It grew more than 11 percent in 2013, with worldwide sales of over $2 billion.
LMS allow managers to approve training, budgets, and calendars alongside performance management and appraisal metrics. Most LMS users create their own learning content which then gets hosted on an LMS server. Any department looking to centralize administration, consolidate training initiatives, and customize learning or training content could benefit from this type of program.
Most Popular HR Software
- BambooHR – Winner of our 2016 Best HR Software Award. A popular and reliable online Human resources software service designed for small and mid-sized businesses.
- Zoho People – A winner of 2015 Best HR Management Award. It’s is a simple HR platform for employee management operations, including records, time tracking and leaves.
- Zoho Recruit – Zoho Recruit won our Customers’ Choice Award for 2016. It’s is a cloud-based recruitment platform that is packed with customizable features.
- Gusto – Winner of our Expert’s Choice Award. Gusto provides payroll, benefits and workers’ comp insurance to small businesses in the United States.
- TribePad – TribePad delivers all functionality you would expect from an up-to-date social application tracking system, and much more.
Key Features of HR Software
Core HR
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Benefits administration – handles employee benefits including paid time off, insurance policies on medical/dental/life, and 401k participation. Example tools: OmnipriseHRM, Triton HR, and Epicor HR.
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HRMS.
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Personnel tracking – centralizes employee information, such as contact information, SSN, past employment, as well as demographic information. Example tools: Sage HRMS, Lawson HR, and Ascentis.
Strategic HR
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Employee evaluation – offers a centralized system where you or your supervisors can conduct and monitor reviews with their employees. Another term for this is performance review software. It features performance measuring, tracking, as well as goal management. Example tools: Empower by ECI, People-Trak, and Cornerstone CSB.
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Applicant tracking systems (ATS) – gives you a centralized database that allows recruiters store applicant data and employment applications well throughout the application process. Its features include applicant status monitoring, candidate tracking, and effective integration with other HR applications. Many vendors likewise include on-boarding features, such as the ability to do background checks. Example tools: MarketRate, iCIMS, and NuViewHR.
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Learning and development – provides a centralized hub to review new employee training as well as the ongoing skills development of your existing employees. Its features include curriculum and certification path definition, content authoring and management, as well as testing and reporting. Example tools: Halogen Talent Management Suite, SmartTeam, and Prosperity LMS.
Workforce Management
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Time and attendance – helps businesses track employee attendance and absences. It also enables employees to clock in and out. Most solutions also monitor accrual and usage of PTO and sick days. Rules-based solutions provide alerts when your employees miss or do established amounts of work. Example tools: LaborVIEW, TimeForge Labor Management, and Kronos.
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Employee scheduling – gives functionality for scheduling employee attendance and shifts to ensure compliance with your staffing needs. Tools can schedule staff across locations, departments, and projects, and give alerts to employees when the schedules become changed and when staffing levels become inadequate. Example solutions: Sage HRMS, Ascentis, and UltiPro.
Benefits of HR Software
HR management systems nowadays have reduced drastically the barriers for HR administrators to track the work of their employees, and they have facilitated the hiring process. Here are some of the most distinctive benefits of HR management software:
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Streamlined Administrative Tasks. Integrated HR suites’ main purpose is to replace the variety of standalone HR applications and to automate basic HR functions in a single system.
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Improved Recruiting. If you want to scale your workforce easily, a best-of-breed and effective recruiting and applicant tracking tool might be the best option. Many solutions like this today can automatically post your job vacancies to job boards as well as social media outlets. Likewise, it can simplify candidate tracking and improve the on-boarding of new employees. With searchable and user-friendly databases of candidates and robust reporting features, your business can make the most of your candidate pool, while at the same time expanding your talent base.
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Advanced Workforce. HR management systems help you ensure that your best employees are duly recognized and rewarded so they will stay with your business and continue to perform great work. The broad type of talent management tools can help you do that: from performance appraisal, gathering peer feedback, to employee training, and other development tools. Benefits of using such as tool include higher morale, increased retention rates, and better employee productivity.
