Different types of HR software and how to choose the best one for your business

 Finding the right HR technology for your business can be tough. There are many types of software to choose from, making it difficult for many to differentiate one from the other. To be able to choose the best one, you need to familiarize yourself with the types of HR systems. This way, you will know which ones would fit your business needs.

What is HR software?

HR software is a program designed to assist HR professionals with their daily tasks. It offers a diverse array of tools to help companies manage their employees and document important processes. 

Depending on the type of HR software examples, it also provides automation tools to help lighten your HR’s workload and streamline workflows. Most importantly, it digitizes HR functions, allowing more flexibility for your company in the process.

Thanks to these benefits, 59% of organizations increased their spending on HR technologies specifically for talent management. The same survey also shows that 47% of them also invest in core HR management systems or HRMS. 

Different types of HR software

1. HRMS

HRMS stands for Human Resource Management System. It is an all-around HR platform that provides core HR functions and information system features. It covers a wide range of capabilities for businesses of all sizes. This includes:

• Onboarding and recruiting employees

• Employee engagement

• Job performance

• Learning management

• Report generation

• Workforce management

There are countless HRMS available in the market that can sometimes be overwhelming. To ensure a successful implementation of HRMS in your business, take your time in evaluating the software available and determine if it fits with the rest of your digital ecosystem.

2. HRIS

At first glance, the Human Resource Information System or HRIS may seem the same as HRMS. Both provide core HR functions and information system features for your company. However, HRIS focuses more on providing a centralized repository of all your employee data. 

HRIS allows you to track and review metrics related to various aspects of your HR. This includes recruitment, compliance, and employee performance. It also provides analytics tools for your HR professionals to assist them with better decision-making.

A comparison of HRIS systems shows that some of its essential and basic functions include:

• Data and analytics

• Time and attendance tracking

• Training and development

• Personnel tracking

3. HCM

Human Capital Management of HCM is a type of HR software that focuses on talent management. It handles the entire life cycle of your employees from recruitment until retention. It also tracks their performance, development, and engagement within the company.

Unlike the first two HR software types, HCM is designed to fit the needs of large enterprises. It focuses on the scalability and global reach of your HR processes. Hence, it may not be suitable for small to mid-sized businesses.

Some of its essential features include:

• HR administrative functions

• Performance management

• Workforce management

• HR service delivery

4. Payroll software

Payroll software helps you streamline and track employee salaries and wages. It automates payroll runs, allowing the option for employee self-service. This can provide a portal where your employees submit their work hours, leaves, and attendance and have their respective heads approve them before sending them to the HR and finance departments.

The software also calculates the total compensation and debits the company bank account for the appropriate amount. It can also trigger the transfer of funds to your workers with just a click of a button. You can also use the software to compute taxes and generate reports to track payroll costs over time. 

Most companies use payroll software alongside the best HR software.

5. Applicant tracking system

Some HR software companies offer a dedicated applicant tracking system (ATS). This centralizes your recruitment and hiring process into one platform. It allows you to manage all your job postings across different channels and track applicants. It can also filter through your applicants’ list, distinguishing the qualified candidates from the unqualified ones. All you need to do is input the right keywords and the software will give you a list of the best prospects.

It can also automate tasks such as ranking candidates, notifying applicants of their progress, and extending job offers. 

Choosing the right technology

With so many HR software solutions to choose from, you might find yourself struggling to pick the right one for your company. You might be tempted to just choose whatever is popular, but that does not mean that it will be the best one for you.

Hence, it is important that you keep in mind your business’ needs before committing to specific software. Determine the various challenges that your HR team currently faces. Likewise, take into consideration your business size and resources. But most importantly, remember your business goals.

You must also consider whether the HR software fits in with the rest of your digital ecosystem. For example, if you have enterprise resource planning or ERP software, it would be great if your HR software can integrate seamlessly with it.