How to choose the Best HR software for your business in 2024

Congratulations! You’ve finally come around to looking for answers on how to choose an HR software for your business. And now you’re faced with the insurmountable task of finding one that suits your needs during a time when the HR software solutions market is bursting with options. The global HRIS market is forecasted to reach USD 43.2 million by 2028, which means you’re left with more options than you could choose from. To help you make a more informed choice of HR Software and to bring an end to the endless wanderings around the web, here's listing some important selection criteria before choosing your new HR system.

How to choose the Best HR software for your business in 2024?

But first, what is an HR software?

Technology is usually your best bet in reducing the pain of necessary, but time-consuming manual tasks. That’s not to say that I consider HR work to be painful, but the amount of administrative work that HR professionals are required to clock-in barely gives them the opportunities to make a larger organizational impact. According to an infographic by G&A Partners, HR professionals spend 73.2% of their time tending to transactional activities, which is time that could be redirected to developing business strategies and managing employees’ success. 

Employees outnumber HR 100:1. Managing and optimizing daily HR processes for efficient functioning requires the assistance of a digital solution. HR software makes it possible for HR staff and managers to better allocate their time and resources, optimise daily tasks as well as the overall HR goals of the organization. 

But how do you figure out what part of your HR process is in need of being automated? when you create your business? Not to fret, because we’ve rounded out a few tips on how to choose an HR software that is right for your business.

The 4 step HR software requirements checklist for your business

1. The size of your company matters

A notable point to mention at the outset is that whether you’re a small & independent company or a multinational organization, it’s never too late to look into how to choose an HR software. Of course, the type of of HR software that you select will depend upon the size and requirements of your business. 

A small business will have fewer employees than a large enterprise, and may generally be able to function well with manual spreadsheets and physical forms for certain processes. However, people operations such as recruitment and performance management would benefit if digital systems were kept in place, especially if the owner of the business also has to don the cap of HR. 

The major perk of new age HR software is that their systems offer guidance and easy-to-follow instructions for the various HR processes, and the user interface is optimized for easy operation. With benefits such as these in an HR software, you can ensure that your company runs smoothly without the need for an IT team. 

If you are a larger organisation, then you have an immediate and urgent need to automate your HR operations. Most large companies already automate processes such as payroll and attendance. However, to ensure a high rate of onboarding, retention and productivity in such growing organizations required the help of complex software, such as employee engagement software, performance management and learning management systems. 

Conduct surveys within your company, or your hiring team or the HR department to get an accurate estimation of the gaps in your operations that need filling in - whether the reason is because of lack of time and resources - in order to find the right software for your organization. 

2. HR ties in with your plans of expansion

If you hope to expand and grow your business, having an HR software becomes imperative. An HR system today comes with a range of functionalities, such as automating your recruitment process to also giving insights about your workforce through analytics. 

Recruitment Management Software and Applicant Tracking Systems can be used to post job requisitions on various channels and platforms, screen resumés, schedule and score interviews, track the recruitment pipeline, and streamline the onboarding process. Having a good onboarding software makes employees happier and more engaged. According to research by Glassdoor, organizations with strong onboarding software improves new hire retention by 82% and productivity by over 70%. Employees report a high level of engagement when they believe that their company’s onboarding software is effective. 

Predictive analytics is the secret ingredient to better recruitment, employee performance management, and gauging workplace engagement levels. For instance, by using predictive analytics in your recruitment function, you can measure important metrics like the quality of hire, analyse your best hiring channels, estimate your cost of hire, and measure the effectiveness of the recruitment funnel. By studying these metrics, organizations can do a better job in recruiting and onboarding, identify further gaps, and fulfil them with the help of HR software. 

3. Get AI for today’s HR needs

The world moved on from data maps and file cabinets, and into paperless operations. Now, take the leap forward into smart, cloud-enabled HR software. PWC HR Technology’s survey indicates 58% of. Businesses use HR technology to find, attract and retain talent, and 74% plan on increasing spending on HR technology thanks to the savings and opportunities offered by it. This means that the time is ripe for investing in the opportunities and offerings of HR technology. 

Most HR executives have noticed and reported on the benefits of AI when it comes to recruiting. Intelligent software solutions can enable recruiters to source resumes, eliminate bias while screening resumes, send messages to multiple candidates, and score candidates based on relevancy to the position.

A great example for this is when Vodafone started using AI to screen its video interviews for everything from role requirements and top performers to body language and speech cadence. Implementing the process enabled the company to cut their hiring the in half, and involved the applications of over 50,000 candidates. 

Apart from intelligent recruitment automation, AI software is also being used to engage with employees using tools like intelligent chatbots that can answer daily queries in real-time, AI-based surveys can source employee sentiment and give them timely nudges in the right direction. HR analyst Josh Bersin noted that one of his clients started using A.I. to analyse feedback from employees and then use this data to match them against higher performing teams. Within three months of using this technology, the leadership teams showed a 25% improvement in corporate values, based purely on small behavioural nudges from AI. 

So, as you’re searching for software that fulfils your current HR needs, don’t miss out on the benefits offered by AI-powered technology. 

4. Don’t forget to stay human

In all the hubbub of automating your HR, you also need to ask yourself one pertinent question - What shouldn’t be automated? Human Resources focuses on the core aspect of a company, the human aspect. And so, when thinking about how to choose an HR software, you must think about how to strike a balance between technology and the human touch. 

Most organizations don’t spend enough time to understand what they are automating and as a result end up automating entire jobs instead. However, HR should focus on streamlining administrative “must-do” activities in order to focus on the people-centric elements of the company, such as culture, leadership and productivity. It is as Josh Bersin’s high-performing HR model states,

“The more time you spend on non-transactional work, the higher impact HR will have.”

The presence of a huge market for HR software means the presence of a software solution for critical HR operations, such as, performance appraisal software, employee recognition & engagement software, onboarding software. And while they do provide digital solutions for HR and administrative problems, there is also the question of what HR specialists will do with the time that they save once they automate parts of the HR function. 

Your final pointer HR software requirements checklist: Before you invest in an HR software, that the take to figure out and dig into the HR tasks that take the most time and the least amount of complex thought. If you believe technology can do it faster and more accurately, then it’s time to automate. However, if the task requires creativity and empathy, let it remain human. 

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When to invest in an HR software?  

The answer to that question is, “Right NOW.”

If you’re struggling to solve a challenge in people management, or are in the midst of starting a new process or operation, then it would be a great time to invest in an HR software. But, challenges also vary depending on the size of the business. 

HR for 10 - 50 employees 

When it comes to HR in small businesses, there’s a chance that companies might not even have dedicated HR people, an instead have office managers or line managers doubling-up as them. And with a tight restraint on resources, small companies have to rely upon manual data work and managing spreadsheets. 

In the long run, these aren’t good processes to follow, especially since smaller companies are vulnerable to HR issues like long-term absences, team conflict, performance management issues and turnover. 

Issues like these are a great indicator that now is the time to invest in an HR software. Automating repetitive, manual processes will help provide value and opportunities for growth, and also provide structure to support future growth. 

HR for 50 – 100+ employees

Now, when you’re big company and your biggest issues have been on not having the resources and time to keep with up company growth, you will need to automate - immediately. After having ten disparate systems and long workarounds to keep them in order for so long, backtracking becomes even more difficult. This consequently makes the move to a new HR software feel like an impossible and difficult project.

Imagine still having to use spreadsheets to track and manage employee data with an employee count of 50 - 100+. The administrative burden itself would be a nightmare. At this point, HR needs to focus on strategic tasks, like implementing best-practice performance management, or building engagement programs - not using the majority of their work hours managing time-offs and scheduling interviews. 

Now is your best time to invest in HR software.

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4 Questions to ask before choosing the best HR software 

Stellar product features aren’t all that you’ll need when implementing a new HR software. As past experience may have already informed you, products are accompanied by services. Here are some tips on the questions to ask HR software suppliers, when evaluating how to choose an HR software. 

1. How do you ensure that the prices offered are fair?

One of the most common predicaments that people have when purchasing an HR software is cost. Some HR software can charge a hefty bill. But, there are also loads of options that don’t necessarily have to empty your wallet. You should be able to pay only what you use, and that would be the fairest offering of them all. 

2. What if you need help when something goes wrong?

The purpose of automating HR processes is to minimize work stressors, instead of creating them. Therefore, when something goes wrong, you will need immediate access to support to help fix the issue. The ideal solution is to have help 24/7 with fast resolution times, so you don’t have to wait in long queues to get the help you need.

3. How to ensure that people actually use it?

Your investments go to waste if people don’t use the software as intended. If adoption is low, the investment can’t deliver ROI. 

While in talks with prospective suppliers, a tip for choosing the best HR software would be to understand what type of training is required to use it. What’s the learning curve like? Do users have to be tech-savvy? Can users use the software on-the-go or only via desktop?

4. How long does it take to get the software implemented and running?

Implementation times can differ from system to system. But you’ll be better off with a software that’s up and running within days and weeks, and not which stretches for weeks and months. 

When working on how to choose an HR software, ask prospective suppliers about their customer success teams and typical time for the implementation process. Do you have to install anything independently? Will this disrupt your daily business rituals? Who handles importing your data? Who has to be involved?