How to Choose HR Software (Buyer’s Guide for 2023)

How to Choose HR Software (Buyer’s Guide for 2023)

HR professionals have a lot of responsibilities as there’s a lot to keep track of when working in this field.

From recruiting and onboarding to managing employee benefits and tracking time off, HR pros have to take care of it all.

HR software can help take some of the burdens off your plate by automating repetitive tasks and giving you access to essential data in one place.

With that said, when it comes to choosing the best HR software for your business, there are many options to go through.

There’s also remote HR software to consider, which allows you to manage your team from anywhere you have an internet connection.

In this article, I’ll go over what to look for when choosing an HR software solution.

I’ll also share some tips and best practices to help you make the right choice for your business.

Let’s dive in.

Benefits Of HR Software

A human resource management system depends on the type of business you own.

While various HR software enable you to manage your recruitment process, employee files, and payroll, they aren’t all created equal.

Ultimately, the best software for your business depends on the company’s size and needs.

These are the benefits of using HR software in your business.

Helps In Automating HR Processes

Automation of HR processes is one of the significant advantages of using HR software.

Automation can help reduce the chances of human error, speed up processes, and improve accuracy.

Improves Productivity, Efficiency And Performance

Performance management is always a big challenge for HR professionals.

However, an effective HR system can make it easier to track employee performance and identify areas where they need improvement.

The right tools can improve employee performance and reduce the time spent on HR-related tasks.

Reduces Costs

The right HR software system can help you save money in the long run.

The cost of the software will be offset by the time and money you save by automating processes, reducing errors, and improving efficiency.

Improves Employee Engagement And Retention

An HR software provider can also help you with employee engagement and retention.

Using a system that enables managers to track performance easily, communicate with staff, and provide timely feedback can keep your employees motivated and engaged.

This can ultimately lead to lower turnover rates, which are costly for businesses.

Improves Team Collaboration And Communication

One can also use human capital management software to improve collaboration and communication within your team.

By providing a centralized platform that allows staff to easily share ideas, discuss projects, and stay up to date with changes, you can help improve productivity and efficiency across the board.

Provides Better Compliance And Reporting

An HR system that focuses on compliance can help ensure your team is always in compliance with regulations, policies, and procedures.

It can also make it easier to generate reports on key metrics and performance indicators, which can help make data-driven decisions about hiring and investments.

Enhances Decision-Making Capabilities

Making the most of workforce management is about more than just automating processes.

The best systems also provide the tools and insights you need to make data-driven decisions about your team.

With an HR system in place, you can easily track key metrics, compare options, and identify areas of improvement.

Keys For Evaluating HR Software

The HR software market is full of options, making it difficult to know which solution is right for your business.

HR systems that are difficult to use or don’t provide the tools you need can be more of a hindrance than a help.

To evaluate HR software options and make the right choice for your business, consider the following vital factors.


Many companies use the help of third-party PEO companies to manage their HR software.

If that describes your business, it’s essential to ensure that any potential HR system integrates seamlessly with your existing systems.

System Flexibility And Scalability

Features such as an applicant tracking system are traditionally included in HR software, but some providers also offer add-ons such as performance management tools and time tracking.

User Reviews And Ratings

It can be helpful to read user reviews and ratings of different HR software options, as they can provide valuable insights into the pros and cons of other systems.

Ideally, you want a system that is easy to use, provides all the tools you need, and is well-supported by the provider.

What Features Do You Need In An HR Software?

As every business is different, your specific HR software needs will vary based on the features your business requires.

While all software is different, there are some essential features that all good HR systems should include.

Employee Database Management

An HR department needs to use employee data to manage everything from hiring and onboarding to scheduling, benefits administration, payroll, performance management, etc.

An HR software system should include a robust employee database that provides easy access to all the information your team needs.

Applicant Tracking System

Considering that one of the leading HR functions is recruiting, an applicant tracking system (ATS) is a must-have in any excellent HR software.

An ATS can help you post job listings, track applicants, and manage the hiring process from start to finish.

Both small businesses and large enterprises need to have a sound HR system to manage their workforce and ensure compliance with regulations.

Having workflows that track and manage employee data from the time they’re hired until they leave your company helps ensure a coordinated and efficient HR operation.

In addition, when it comes to various business needs such as performance management and succession planning, applicant tracking systems provide a wealth of data that one can use to inform these processes.

Employee Self-Service Portal

The employee experience is one of the critical factors determining whether people stay at a company or quit.

Having an employee self-service portal is essential for any effective HR system.

Irrespective of dealing with new employees or long-time team members, an employee portal helps simplify and streamline processes like time-off requests, benefits enrollment, and performance reviews.

With various modules that might include onboarding, salary information, and other valuable resources, an employee portal can help support a positive and productive workplace culture.


The ability to automate various functionality related to onboarding is another critical feature to consider when choosing HR software.

In addition, being able to streamline and automate the onboarding process can help improve new hire retention rates.

Onboarding software within an HR system should make it easier for new employees to access information that includes benefits, pay stubs, calendars, and more.

Time And Attendance Tracking

The right employee records help with compliance and ensure that companies adhere to all relevant regulations.

HR solutions that feature time and attendance tracking make it easier for businesses to keep track of employee hours, vacation days, and other essential data.

Using HR technology, businesses can automate time tracking features, ensuring that records are kept, and everyone in the organization is paid on time, every time.

Leave Management

Human resource software should be able to track leave time and make it easy to manage and report on this data.

When it comes to time off, administrative tasks traditionally take up a significant portion of HR professionals’ time.

An HR system takes over the process, automates it, and makes it easier to track who is out of the office and when they’ll be back.

Training And Development

Another feature related to the onboarding process is training and development.

When looking for HR software, consider solutions that include modules dedicated to employee training software and development needs.

Compensation Management

One factor that helps employee retention is a competitive salary and compensation package.

Compensation management software is another critical feature of modern HR systems, allowing businesses to streamline the annual review process and ensure that their employees are being paid fairly.

Benefits Administration

Team members are always looking for an excellent benefits package, and HR software can help businesses streamline their administration of such benefits.

Whether it’s health insurance, retirement plans, or paid time off, HR software can help to simplify the process of managing and administering benefits for your employees.

Payroll Processing

HR payroll software can automate and streamline the process of calculating employee paychecks.

This includes features such as direct deposit and tax withholding.

Talent Management

This typically is a time-consuming process that requires a lot of back-and-forth communication between the hiring manager, the HR department, and the candidate.

An applicant tracking system or talent management software can help automate this process and make it easier for everyone involved.

When Does A Company Need HR Software?

Knowing the right time to invest in HR software is crucial to ensuring your business gets the most value out of its investment.

There are several vital situations when a company may benefit from investing in HR software.

The following are some of them.

When you have outgrown your manual processes or want to automate HR tasks

If a company is still using spreadsheets to track timesheets and payroll or emails to handle employee performance reviews, it may be time for HR software.

When you need to streamline and standardize HR processes across multiple locations

The company’s needs need to be evaluated when they have many locations.

Do all the sites use the same HR processes?

If not, can they be standardized?

Using various apps to handle HR processes is more complicated and time-consuming than using a single, comprehensive platform.

When you want to improve data collection and analysis for better decision-making

A core HR software platform can be a powerful tool for data-driven decision-making.

It allows you to track and analyze employee performance, turnover rates, demographics, and other key HR metrics.

When it comes to performance review, having the correct data available to the HR team helps identify areas where employees need more training or development.

When you need to reduce the risk of human error in your HR processes

Team members don’t always have the same understanding of how to fill out specific paperwork correctly.

This can cause inconsistency and errors in the data.

The right HR software platform can help reduce these risks by providing standard templates and automated workflows that ensure consistency.

When you are looking for ways to improve employee engagement and retention

Using the previously-mentioned templates and workflows to automate onboarding processes can help new employees feel like they are a part of the team from day one.

This sets the tone of what’s expected from them when it comes to their engagement and increases the potential retention of such employees.

Additionally, tracking employee engagement and performance data can help identify issues early on and take steps to prevent any significant problems from arising.

When you want to give employees more control over their benefits, schedules, and performance

Finally, a human resources information system should help give employees more control over their work lives.

Some systems offer employee self-service portals where employees can view and update their information, request time off, and view their performance reviews.

Questions To Ask Before Deciding On An HR Software Vendor

These are some questions to help you with the selection process when it comes to choosing a user-friendly HR software vendor:

  • What approvals are needed before an employee can enroll in a benefits plan?
  • How does this system integrate with an ERP (enterprise resource planning) system?
  • How easy is it to use the payroll system?
  • Is LinkedIn integration possible in terms of recruitment, and how difficult is it to set up?
  • What type of customer support is offered?

Wrap Up.

The right HR software platform can make all the difference in your business.

It can streamline processes, engage employees, and improve overall workplace productivity.

Keeping in mind the above factors, you can easily choose the best HR software platform that meets your company’s unique needs.

Further reading on Want to learn more about various HR software solutions?

Check out this post on HRIS (human resource information systems) and HCM software (human capital management software) to help you make an informed decision about which HR software platform is right for your business.

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