Everything You Need to Know About Different Types of HR Software

Did you know that HR software could be the edge your business needs to get ahead of its competitors?

Whether it’s automation, smoother payroll management, enhanced employee experiences, or simply improved recruitment, HR software is a vital business tool.

Unfortunately, there is some confusion as to what HR software does. So, let’s take a closer look at what HR software is all about, beginning with:

What is HR Software, and Why Does It Matter?

The term HR software is an umbrella term that refers to the myriad of applications that allow HR professionals to manage all data and processes related to an organization’s employees.

There are different types of  HR software available, with different variants fulfilling other functions within the organization. 

The actual value of HR software comes from its ability to automate and simplify complicated business processes. At the same time, it also allows the HR department to enhance its service range.

All of this allows HR professionals to take on more value-added roles. And as the war for top talent heats up, these tools will prove invaluable for businesses to remain competitive.

Breaking Down The Different Types of HR Software

Now with all of that in mind, let’s look at the different types of HR software available to users on the market.

1. Human Capital Management (HCM) Software

Human Capital Management refers to enhancing and optimizing a company’s employees. 

From HR, payroll, leave, claims, and compensation to upskilling, and leadership training, providing employees with professional development improves motivation enhances performance, and improves retention rates.

Hence, Human Capital Management (HCM) or Human Resource Management (HRM) software has become very popular in recent years. Employers can chart out an employee’s professional development and provide appropriate training programs to improve their skills.

But that’s not all HCM software can do – far from it.

With HCM software, employee onboarding and performance management can also significantly improve. All of these improve the overall employee experience and increase operational efficiency.

2. Human Resource Information Systems (HRIS)

Human Resource Information Systems or HRIS are similar to a whole umbrella of HR suites such as HCM which are used interchangeably. These work similarly to HCM software however being named differently, their uses are vastly similar to help support HR practitioners with automated HR software. A different HR software that works similarly across the board. 

With an HRIS system also known as an HR software system, HR professionals previously had to contend with repetitive filing and paperwork; with HR software, paper filings are known to be the past. 

Instead, employee information is now input into a centralized database to be filed and stored automatically. It can be easily accessed or referred to by HR professionals with just a click. 

As an added plus, HRI-style software often supports employee self-service portals – which allow employees to submit claims or perform administrative functions without submitting a request to the HR department.

All of this minimizes errors and eliminates the risk of misplaced prerequisite forms or paperwork.

Different HR Software Modules

Within an entire HR suite, there are HR software modules that allow HR professionals and managers to customize the capability of their systems. While some systems feature a one-size-fits-all configuration, a module-based system provides HR professionals with greater flexibility.

For example, a recruitment module is also known as the Applicant Tracking System. It provides the tools to manage and acquire recruits. Meanwhile, other specialized systems include data analytics, performance management, and learning and development. 

As organizations regularly receive hundreds or even thousands of applications daily, it can be tough to thoroughly analyze every candidate’s submission.

And because of this, the quality of said organization’s hires may fall as a consequence.

Fortunately, with an Applicant Tracking System or ATS, this will soon become a thing of the past. ATSs allow HR professionals to automatically sort, analyze, and file candidate applications with no errors – thus making it possible for the hiring manager to make the best possible decisions.

Apart from the Application Tracking System, there are various modules that are relevant to HR practitioners. However, we will touch on the hot module which eases most HR work.

Payroll management. An important HR process. Besides keeping employees happy, ensuring that staff are paid on time is the responsibility of every employer.

Unfortunately, payroll management can be pretty messy for those unprepared for its intricacies. Employee payroll requires collaboration between the HR department and finance, from taxation to staff overtime.

Worse still, payroll errors can lead to some complications besides unhappy staff members.

But thanks to payroll management software, all of these can be entirely automated. In fact, the majority of systems available are compliant with local tax requirements – ensuring that both employers and employees are compliant with the law.

All of this allows HR professionals to pivot and adjust their functions to support a variety of organizational processes. 

On-Premise vs. Cloud-Based HR Software

Besides ad-hoc software modules, current-generation HR software also supports customers looking to utilize either on-premise or cloud-based solutions.

Both systems have their advantages and disadvantages, so let’s take a look at how an on-premise system differs from a cloud-based one.

On-Premise Systems

An on-premise system is just that — HR software installed and based on the company’s premises. The main advantage of such a system is that it is more secure than a cloud-based system.

This is because on-premise software can use the company’s existing intranet and does not require employees to log in via a VPN or the Internet. All of which significantly reduce the risk of a cyberattack.

However, on-premises systems require an in-house team to provide regular maintenance and support. Additionally, these systems use up valuable office space as a dedicated room/area will need to be prepared for the required infrastructure.

Cloud-based Systems

On the other hand, cloud-based systems are fully online and require significantly less setup than their on-premise counterparts. 

A cloud-based system is hosted on a remote server, and it does not require any additional infrastructure investment. Because files are stored in the cloud, organizations do not worry about data loss.

As an added plus, a cloud-based system allows HR professionals to access valuable company information remotely. Thus, eliminating any issues or concerns related to business continuity.

But, as these systems are 100% online, they can be susceptible to cyber-attacks and require significantly more maintenance than an on-premise system.

This is why HR professionals, business owners, and managers alike will need to analyze the needs of their businesses to assess what type of HR software works well for them.

Benefits & Advantages of HR Software

Despite having different HR software and naming conventions. Regardless of their choice, HR software is a solid investment for any large or small business.

Firstly, HR software allows for a more considerable degree of automation and frees up HR professionals from non-value-added tasks such as filing and data entry. By doing so, HR professionals can then be better utilized for other functions.

With HR software, businesses can refine their recruitment practices for better hires. This is done by integrating AI into the assessment process, speeding up analysis, reducing errors, and improving the candidate experience.

As for talent management, HCM software allows managerial staff to plan and manage their staff’s professional development. These include identifying areas for improvement and planning courses to enable employees to upskill themselves.

The Future of HR Software

As can be seen, with different HR software, companies are able to customize and elevate the power of powerful HR modules to facilitate their day-to-day work.

Thanks to the advent of AI technology and advanced data processing software, we can expect HR software to become increasingly sophisticated. 

And because of this, the role played by HR professionals is set to evolve even more. 

Rather than functioning as administrators, HR experts will soon have to incorporate new skill sets to remain relevant. This includes advanced skills such as data analytics, continuous improvement, and even IT expertise. 

Closing Thoughts

HR software is an integral part of any smooth operation, and the benefits of investing in it cannot be understated. For more information on top-quality HR software and technology solutions, check out our website.