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What is HR Management Software?

John Ferguson
November 22, 2019

What is HR Management Software?

My first exposure to the world of HR came years before I ever had a job, in the form of the cult classic, and utter hatchet job on the cubicle lifestyle, Office Space. I still have no answer as to why my family thought the movie made good viewing for a pre-teen, but the movie’s success and impact demonstrated how unhealthy tech offices, and modern corporate machinery, could be.

The release of Office Space, one piece of a whole genre of similar content, added social imagery to the demands for better work environments, and the responsibility to deliver on those demands has largely fallen on HR departments and personnel. Fortunately, HR management software products have developed to meet the perennial and evolving challenges faced by HR professionals.

What is HR Management Software?

As the name would suggest, HR management software supports HR management processes and administrators. HR management includes the strategic hiring, development, and guidance of a company’s employees. These processes can be conducted by dedicated HR professionals or line managers, depending on the size and structure of the organization.

HR management software enables these processes in a variety of ways. Primarily, HR management software digitizes and centralizes employees’ information, payroll processes, and other tracking data relevant to virtually every employer. It also automates processes, like payroll, that are both important and repetitive and thus a less efficient use of human labor.

Why does HR Management Software Matter?

HR management software can be valuable in keeping HR from playing an Office Space-esque role in a business. The ability to collect and centralize employee data enables more efficient reporting in the short term and better data-driven decisions about personnel and talent into your company’s future.

The efficiency boon HR management software can offer to HR departments also cannot be understated. Digitizing employee data allows the software to automate many important, but routine and repetitive, HR processes. This automation lets your HR team focus on skills-intensive, rather than labor-intensive, tasks that add more value to the organization—and make their days less tedious in the process!

What’s In HR Management Software?

Common features found in HR management software are segmented into two areas. The traditional feature set for HR management software, better known as “Core HR,” focuses on the HR processes that every business uses regardless of size or industry. Core HR features consist of employee data collection, payroll, and personnel tracking. Every business needs these functions, but the complexity and sophistication can change even within a single business’s lifetime. For very small businesses, Excel spreadsheets may be sufficient. However, many businesses quickly outgrow ad hoc HR processes and require more professional processes and software to support them.

Human Resource Information Systems

Human Resource Information Systems (HRIS) provides a central repository of employee data. This information ranges from application data to demographic and personal information to benefits information. The HRIS has traditionally served as the foundation system for the other Core HR processes by centralizing the records produced from payroll and personnel tracking. It is also a key component of other strategic HR functions, like talent management and employee engagement.

Payroll Management

HR management software allows businesses to automate many payroll functions and calculations. This automation mitigates human labor and risk for error required. The software should also track historical payroll data and manage direct deposit to employee’s accounts. If you’re in the market for HR management software, keep a close eye on products’ features surrounding payroll and reviews of said features, as this area can have the largest impact, positive or negative, on routine HR efficiency.

Personnel Tracking

Personnel tracking can entail a variety of features, depending on your company and industry. Traditionally, it encompasses attendance and leave management, scheduling, and general time tracking. However, some products also offer asset management and tracking, such as company-issued laptops, phones, cars, etc. Personnel tracking is closely aligned with HRIS features, but focuses more on employees’ current and recent statuses than their historical data.

Does My Business Need HR Management Software?

The short answer: yes. If not now, then soon.

As mentioned above, every business uses some form of HR management, even if it’s barebones payroll processes and regulatory filings. In some cases, cobbling together these functions as you go can work for very small organizations. However, as your business grows, ad hoc approaches in HR are the first to be stress-tested beyond their capacities. Rather than waiting until something breaks, making the investment to build out your own HR software support ahead of time can yield dividends in efficiency and averted crises down the road.

A more useful question to ask yourself is probably, “what kind of HR management software do I need?” There are a ton of options in the marketplace (124 HR management products are listed on TrustRadius), and each has different strengths, weaknesses, and best use cases. Some specialize in services for small, midsize, or enterprise companies, some on various industries, and some on certain labor pools. Explore users’ feedback and reviews to get insights into which one might be the best fit for you!

About the Author

John Ferguson
John is a Research Associate at TrustRadius, focusing on content development and buyer-guided research. His goal is to support and enable better software buying decisions, with an eye towards helping people from all backgrounds navigate the world of business software. He has a BA in Politics from Centre College.

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