Benefits, payroll, training, performance review - even in an era of increasing online and remote work, companies face the same challenges when it comes to managing their teams. Those challenges apply to all levels of business. Companies on the enterprise level, large businesses with multiple sites and dozens of employees, might have the advantage of dedicated human resource (HR) teams. They also have far more employees to manage, making HR management a bigger challenge in the first place.
For small and medium-sized businesses, fewer employees means less overall work, but also few resources to manage the problem. Small businesses in particular face the challenge of managing any employees on top of all of the other jobs a typical small-business owner faces. Adding the logistics of HR management on top of marketing, managing, and building the business poses a huge challenge for small business owners.
Fortunately, in today’s software-driven world, there are numerous solutions for the HR problem. HR management software comes in all virtual shapes and sizes, including solutions tailored for the smallest businesses as well as multi-national corporations. In fact, the biggest challenge when it comes to finding a solution to your HR management problems is simply making the best choice out of all the options.
In this guide, we’ll help you navigate the jungle of HR management software. We’ll define key terms, break down what to look for, and highlight some of the best solutions currently available.
What is human resource management?
Let’s start with some definitions. As we’ve already mentioned, the broad category of human resources refers to the process of managing a company’s employees. Traditionally, companies used teams of dedicated employees to handle human resource tasks.
Elements of HR management
What are those tasks? At its most basic, human resources refers to the hiring, training, managing, and firing of employees. Those four components could perhaps be trimmed down even further, to employee hiring and firing. But rather than become something narrowly-focused and highly specialized, human resources has grown in recent years to cover more and more aspects of the employee-employer relationship.
Listing all the individual elements that fall in the category of human resources is an impossible task; every company handles human resource management in a slightly different way. But most components of HR fall into one of several broader categories. These are the standard elements to an HR management approach:
Hours worked, benefits earned, annual leave time accrued, complaints or recognition filed; simply tracking the normal, day-to-day facets of a worker’s role within a company can be a time-consuming task. But tracking those daily aspects is crucially important for any company in order to maintain good employee relations.
Not every worker is equally qualified. Human resources departments aim to recruit the best workers for each role and provide training for anyone not up to the correct level. Managing talent, not just timetables, is one of HR’s primary roles. That includes onboarding and orientation.
Teambuilding and networking also fall into HR’s purview. In general, human resource management aims to boost employee involvement, feedback, and collaboration. That can be done through teambuilding exercises, regular feedback, and internal surveys.
For upper-level employees, HR management might focus on keeping fair pay schedules and using analytics to track performances.
Why use HR management software?
Managing workers, training talent, and encouraging collaboration form the chief elements of any human resource management software, but what specific benefits come with it? Why choose HR management software to help your company?
Every HR software solution will come in a slightly different form, but you’ll find that each offers some combination of the benefits listed below:
Regular employee reviews can be stored, tracked, and reviewed as needed, giving HR managers complete access to all the information they need to analyze performance.
There’s room in most HR management solutions for bottom-up feedback as well, where employees can submit their own thoughts on processes and performance.
It’s a long way from punchcards, but HR management software provides the newest and best method to track time worked.
If you can track employee timesheets, it makes sense that HR management software would allow payroll management as well.
Absences, whether legitimate or not, are a key part of employee reviews. Tracking attendance and absence allows employers to reward hard-working employees and highlight ones who need additional support.
Recruitment is a huge part of any HR department. Track promising candidates both internally and externally, and store applications that come in for future reference.
Improved employee retention happens naturally when feedback is heeded, performance recognized, and good morale maintained.
With HR software, HR managers can initiate and track training programs. Prioritizing employee development has knock-on benefits for morale while having a centralized platform for tracking the training programs themselves allows managers to evaluate the success or failure of each program and allocate resources accordingly.
Many HR platforms have self-service portals for employees, allowing them to log in and track training, and submit reviews.
Not every function of an HR solution is internal. HR software provides better accountability and compliance with external regulations as well.
That’s not an exhaustive list; every HR management solution out there will offer a slightly different approach to the problem, with new benefits and extra tricks to help you maximize the productivity of your HR management software. And at the end of the day, that’s the biggest benefit HR software provides - reducing costs and increasing efficiency for companies both large and small.
Which companies need HR management software?
HR management was traditionally the purview of highly-trained HR professionals. Those roles haven’t gone away, but as small businesses and online businesses proliferated companies began to look for a more innovative approach to HR management. The need for HR software is particularly acute for smaller companies without the necessary resources to employ a full team of HR professionals.
Because comprehensive HR software provides a wide array of benefits there’s something in it for every company. Entrepreneurs on their way to building the next mega-corporation can use HR management software to track the best talent, while a locally-owned shop might find the payroll management aspects to be a lifesaver.
Advantages of HR management software
Dedicated HR management software makes HR easier by bringing the different functions of HR under one roof. And by placing all the necessary resources in one place, HR management software allows nearly anyone to manage the process, regardless of training or previous expertise.
Most HR systems use some form of the Software-as-a-Service (SaaS) model. With SaaS, software is quickly downloaded and easily updated, and can be managed remotely. This makes the SaaS model ideal for any company that prefers the flexibility of software with the commitment of troubleshooting and constant update schedules.
Perhaps the biggest advantage of the SaaS model comes with the subscription system most SaaS companies use. By paying on a monthly basis, companies looking for HR management software avoid being locked into a solution that doesn’t suit them. There’s nothing to prevent a company from switching services at any point.
Because of the flexibility in the SaaS model, companies can look for an HR management solution that suits them. Not every software suite is created equal; some programs cater to mom-and-pop businesses, while others are intentionally more complex to meet the needs of enterprise-level corporations.
10 best HR management software for 2021
Now that we’ve outlined how and why HR management solutions work, it’s time to quickly cover a few of the favorite solutions heading into 2021. There’s a software suite for any business no matter how large or small, so look through the list to find the solution that fits your company the best.
Software for small business
An HCM aimed directly at small to medium-sized businesses, Paycor provides everything needed to manage a growing team. Document storage, self-service functions, an app - all the basics of a well-designed HR management approach are here. Paycor offers a number of different plans; upgraded plans include increased support for payroll and benefits management.
Orange could fit into any category on this list. The software bills itself as “flexible,” and the software is available in a number of plans which range from a free plan for the smallest plan to far more expensive arrangements with multinational corporations. Even the free option is quite powerful, and OrangeHRM is designed to be completely scalable to suit any company.
A mobile-first HRM solution, that’s what HROne provides. Focusing on mobile users makes HROne ideal for smaller businesses. Built-in communications features, including group announcements and the ability to add automatic chat features, makes HROne perfect for remote work or smaller, multi-location companies.
Globoforce (now WorkHuman)
With a recent change of name, WorkHuman builds off its own formidable reputation. WorkHuman focuses on enabling employers to provide recognition for their employees, rewarding them socially and inspiring better work. Social recognition is WorkHuman’s brand. It’s not a comprehensive HR solution, but it does enable employers to track the entire employee lifecycle.
Software for midsize business
Performance-focused rather than feature-focused, but with superior social media and mobile integrations; that’s one of PeopleStrong Alt’s major selling points. Designed for both medium and enterprise-level businesses, PeopleStrong lives up to its name with a particularly strong emphasis on employee recruitment and retention. Managers can integrate information from LinkedIn and Facebook profiles to keep tabs on promising talent. And of course, PeopleStrong also provides the usual array of payroll management and timekeeping functions.
FreshTeam receives high praise for excellent customer service support and features that excel at the traditional “hiring and firing” pillars of HR management, like the ability to create an inbox for a particular opening, and have every incoming email converted into an active application. Like OrangeHRM, FreshTeam offers a free version for smaller businesses, but is easily scalable to far larger enterprises.
Zoho offers a huge range of cloud-based business software solutions; People is their HR management solution. Its strengths lie in a well-designed hub that makes reporting timesheets and asking for time off easy to do and easy to oversee, from desktop and mobile devices. Zoho People can be scaled up to cover enterprises, but is most popular for small to mid-sized companies. And of course People is easy to integrate with other Zoho products, making it convenient to build out a complete array of software that all share a similar design.
Software for enterprise
UltiPro by Ultimate Software
Designed for all business sizes, but excels with larger companies. UltiPro casts a wide net, bringing a number of features and automation tools to streamline the management of even large numbers of employees. There are automatic timekeeping and payroll functions, as well as employee logins and detailed benefits management. In short, while a “one-size fits all” approach might seem problematic, UltiPro does its job admirably.
Dayforce brings everything under one roof; payroll, hiring, training, timekeeping. With a single system and a fully integrated system with employee logins and management functions, Ceridian’s Dayforce HCM suite is a comprehensive solution. The payroll aspects are particularly strong and easy to use.
Lanteria’s CoreHR is just as it says - the central features of an HR management system without all the peripherals. That means that CoreHR covers recruitment to retirement, with added modulus available to cover payroll, benefits, and other aspects of broader HR management. Because of this structure, CoreHR is best suited for larger businesses with the resources to invest in a software solution.
How to use HR management software
There’s no right or wrong way to use HR management software. If you’re a small business and want to start with the basics, consider one of the HR software solutions that offer a free trial. You can use that time to master the basics and get an idea of the functionality of the software. It will also teach you what to look for in other HR management solutions.
Larger enterprises will want to prioritize scalability and flexibility, with the ability to add elements (and increase the price) as the company grows and expands.
Companies of any size should keep an eye on the communications elements supported by each HR solution, and make sure that mobile-friendly or app-based solutions are featured.
Choose an HR solution that works for your company, and invest the time needed to master what can often be a bewildering array of features. Investing that time early on will pay off in the long run.