What Is Human Resources (HR) Software?

Human resources software, or HR software, is a business solution for managing and streamlining tasks for the HR department. The software empowers HR employees to improve time and resource allocation and increase productivity and efficiency. An HR platform optimizes HR processes by automating manual tasks, organizing employee records, and building data-driven reports.

HR tools unify recruitment, payroll, administration, development, compliance, employee engagement, performance management, and more. This type of software provides a single source of employee data and a centralized view of the company, so HR teams can effectively manage each stage of the employee lifecycle.

A reliable human resources software solution is essential for fast-growing businesses to securely store confidential employee data and stay compliant with regulations. Moreover, core HR and advanced solutions assist the HR staff in better workforce planning, budget management, and decision-making.

Core HR Software Categories

Although they are often used interchangeably, there are several technical differences between the three main categories of core HR software: HRIS, HRMS, and HCM.

Human resources information systems (HRIS)

Human resources information systems (HRIS) offer a variety of capabilities for HR data management. The goal of these multi-function systems is to maintain individual employee data and handle the company’s regulatory and legal employment requirements.

An HRIS stores key details about an organization’s workforce, including employees’ personal information, employment details, performance metrics, and compensation history. HRIS platforms can also act as a repository for important HR documents like employment contracts, tax forms, policy guides, and more.

An HRIS can be a standalone product that integrates with other HR applications, or it can serve as a central database in an all-in-one HR software suite. At its core, an HRIS application focuses on optimizing processes associated with HR recordkeeping and reporting.

Human resources management systems (HRMS)

Human resources management systems (HRMS) focus on process optimization and cost efficiency. This type of software improves how an organization handles its HR processes by automating tasks and centralizing access to critical information.

Many HRMS products extend the functionality of a traditional HRIS by including tools for payroll, benefits administration, and more. An HRMS can also be used for more robust reporting and forecasting purposes, like succession planning and position control.

Human capital management (HCM) software

Human capital management (HCM) software is often regarded as the largest umbrella in the HR software category. Most HCM solutions combine all of the functionalities of HRIS and HRMS platforms, plus additional features for recruiting, employee engagement, performance management, and more. HCM software also offers advanced data analysis capabilities for business intelligence and HR process optimization.

HCM software cultivates human capital by streamlining all HR functions and creating a holistic view of the employee lifecycle. This breadth allows companies to maximize the potential of their employees and their contributions to organizational performance. HCM software helps keep employees engaged and motivated to work in the direction of the company’s business goals.

Other Types of HR Software

Many vendors offer standalone software solutions to help HR teams with specific tasks like applicant tracking, onboarding, payroll, performance management, employee engagement, and learning management. Often, these applications can be integrated as part of a broader HR suite as a company grows.

Applicant tracking systems (ATS)

An applicant tracking system (ATS) is a recruiting software that automates the hiring process. It manages the entire recruitment process from beginning to end, from sourcing and screening candidates to extending job offers and onboarding new employees.

ATS platforms let HR professionals post jobs on various sites and schedule interviews with qualified candidates automatically. ATS also manages information related to different candidates, allowing the HR manager to compare candidates against each other and choose the best one for the job.

Onboarding software

Onboarding software facilitates the process of introducing new hires to a company. It typically includes capabilities such as electronic signatures, pre-boarding checklists, and employee questionnaires to help HR ensure a smooth employee onboarding experience.

Payroll software

Payroll software lets organizations track expenses, taxes, payouts, and schedules accurately. It also helps HR teams maintain compliance with labor and payroll regulations and analyze payroll data for discrepancies or inefficiencies. Organizations use payroll software to calculate, process, and record employee pay on time.

Performance management

Performance management software enables organizations to assess employee skills, track goals, and monitor performance over time. Companies often use performance management software to coach employees and evaluate performance during formal reviews or through weekly pulse updates. It gives managers a clear view of employees’ growth and development in their roles.

Employee engagement

Employee engagement software helps companies understand employee sentiment over time and identify areas where the employee experience can improve. These systems offer survey tools, follow-up workflows, gamification, and analytics to understand how employees feel about their work. Employee feedback data is then consolidated and analyzed to produce actionable insights that can improve retention.

Learning management systems (LMS)

Learning management systems (LMS), or eLearning systems, help HR teams design, organize, and deliver employee training programs. These systems can evaluate employee skills, track active certifications, and identify opportunities for professional development.

By incorporating this tool, HR can onboard new employees and keep tenured employees up to date with current industry knowledge standards. Moreover, LMS can optimize job and compliance training and learning and development.

Benefits of HR Software

HR software solutions offer businesses a number of advantages, including increased efficiency, consistent compliance, and deeper reporting capabilities.

Efficiency

Many HR software solutions include automation capabilities that drive the efficiency of different HR processes. When HR staff can spend less time on repetitive, manual tasks, they are able to focus on more valuable priorities. Additionally, HR software provides employees with direct access to the services employees need most so they can complete tasks like direct deposit updates or benefits enrollment independently.

Compliance

Compliance with HR-related laws and regulations is usually non-negotiable because of the costly penalties associated with violations. HR software helps organizations stay in compliance with current local, state, federal, and international laws, as well as industry-specific regulations.

Reporting

Robust HR software reporting features help organizations make informed decisions with accurate data. Many HR platforms offer report generation templates to help users find the information they need quickly, and others offer advanced AI tools to support deeper data insights like predictive analytics and natural language processing.

HR Software Recommendations

HR Software Comparisons

HR Software Competitors and Alternatives

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