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Types of HR Software

Empower your business with these 9 cutting-edge HR tools

Updated: May 20, 2024
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Staying on top of recruiting, payroll, benefits administration, and other critical human resource (HR) needs can be daunting for startups and growing businesses. Human resources software is designed to automate, streamline, and empower your human capital management (HCM) by assisting with the necessary tasks to support the full employment lifecycle. The following are nine key types of HR software to help you meet your critical HR management needs:

Let’s dig in to more detail about each type.

Human Resource Information Systems (HRIS)

When most people think about HR systems, the first thing that comes to mind is a human resource information system (HRIS). Like a human resource management system (HRMS), this comprehensive, all-in-one software stores employee information and supports various HR processes, such as benefits, payroll, recruiting, training, and more.

The types of HR software described in this post can often be found as components of an HRIS, HRMS, HCM, or their own standalone application. Thus, if your business needs multiple types of HR software to manage and store your employee data, consider an HRIS software that integrates various types into one platform, such as Rippling. Alternatively, you may find it easier to build a suite of HR software your small business can integrate with one another.

What type of business should invest in HRIS software?

Nearly any organization that manages employees can benefit from using HRIS software. The specific benefits will depend on the size, industry, and unique needs of your business. An HRIS handles complex employee data, benefits administration, payroll, recruiting and other key HR tasks for large corporations with substantial workforces spread across multiple locations.

As businesses grow, managing HR processes manually can become tedious. Small and medium-sized businesses can use an HRIS to automate many of these processes, helping to ensure accuracy and efficiency. Healthcare providers, educational institutions, manufacturing firms, retail businesses, and even non-profit organizations have unique needs around time and attendance tracking, scheduling, seasonal staffing needs, tracking certifications, safety compliance, and other HR processes. HRIS software can accommodate these needs.

Applicant Tracking Systems

If you’re hiring, a talent management system will help you execute every step of the hiring process. An applicant tracking system is recruiting software that helps you level up your hiring efforts as you create a great candidate experience and showcase your employer brand.

Providers like BambooHR help you craft job descriptions and auto-post to popular job boards or those that you pre-select. Additionally, these systems have workflows designed to eliminate bottlenecks in the hiring process and ensure communication and transparency among your hiring team.

When researching recruitment software, look for programs with

  • Comprehensive applicant tracking workflow
  • Resume parsing
  • Interview process workflow
  • Pre-employment screening
  • Offer letters
  • Onboarding paperwork

Check out our Applicant Tracking System buyer’s guide to see our top picks like ApplicantPro and learn more about how this software can help your business.

What type of business should invest in recruitment software?

Recruiting and hiring require steady forward progress and high touch with candidates. While any business can benefit from this type of software, companies projecting significant growth in their headcount or that don’t have a dedicated HR staff will see immediate value in recruiting software. Recruiting software reduces redundancies, manual processes, and bottlenecks in the recruiting and hiring process.

Onboarding Software

Onboarding means helping new employees transition into your organization, including activities related to orientation, new hire paperwork, training, and building relationships across the organization. A good onboarding process is directly tied to employee experience, employee retention, and engagement. Given that only 12% of employees strongly agree that their organization does a great job onboarding new employees, investing in software that helps improve the onboarding process makes a lot of sense.

To make the most of your onboarding period, look for software that includes

  • Employee self-service portal for new hire paperwork
  • Tracking onboarding steps
  • Storing on-demand training
  • Goal setting and planning

What type of business should invest in onboarding software?

Hiring and training new staff due to poor retention is costly. Onboarding software is an investment that can have immediate ROI for your business. Organizations with a manual onboarding process can be optimized using this technology. Likewise, companies seeing increased attrition within the first year of employment will benefit from adding onboarding software to HR software systems.

Performance Management Software

Goal setting, clearly documented expectations, and ongoing feedback are important when managing employee development. Technology that supports establishing and regularly checking in on employee performance can make those tasks much more manageable and standardized across the organization. Real-time access to track, document accomplishments, and respond to improvement opportunities allow managers and employees to engage in fact-based, real-time performance conversations.

Some key features of performance management software include

  • Goal setting
  • Conducting reviews
  • Providing ongoing feedback

Using performance management software for performance reviews shows a company’s commitment to employee performance and helping individuals develop and grow.

What type of business should invest in performance management software?

Businesses with a manual performance management process should consider transitioning their paper process to a tech-enabled one. But even if you don’t have a defined performance management process in your organization, various software options make developing and implementing one a win-win for your employees and managers.

Learning Management Systems

A learning management system (LMS) allows you to create, organize, deliver, and evaluate all your company’s training. Good learning management tools can

  • Design learning tracks
  • Assign company-wide mandatory training
  • Apply training for specific teams and positions
  • Analyze skills and knowledge attainment
  • Determine future training needs across the organization

A learning management system like TalentLMS is user-friendly and documents the skills and competencies needed for success. They also help create long-term learning programs that strengthen employees’ skill sets. Learning management software makes creating and delivering employee training programs manageable and efficient. There are many affordable options available for businesses of all sizes.

What type of business should invest in learning management software?

An LMS is an excellent option for organizations with specialized skill sets and a transient workforce where getting and keeping your employees up-to-date is a top priority. Organizations with defined training and development programs that need a centralized system for managing those programs will also find an LMS useful.

Payroll Software

Paying your employees accurately and on time, maintaining records, and staying compliant with federal, state, and local laws are key reasons any business can benefit from payroll software. These processes are too important to rely on manual processes. A payroll software like Gusto can help even small businesses cover their bases here.

Whether you are looking for flexible employee pay options, need a global payroll provider, or simply want to manage your payroll processing better, many payroll systems are available at all price points. Additionally, as your hourly employee base grows, it is crucial to have accurate time and attendance tracking. Capabilities that help you manage employee scheduling and project overtime expenses are often built into your payroll software or can be added as an integration from other time tracking software providers.

What type of business should invest in payroll software?

No matter your company size, acquiring payroll software is a must. The consequences of payroll errors, failure to pay payroll taxes on time, incomplete record keeping, and other compliance issues are not worth foregoing this critical piece of software. With various payroll options available, you can easily find a provider to meet your needs and grow and scale as your business grows.

Employee Engagement Software

In HCM, engagement is key to retaining and developing your employees. Data-driven employee engagement seeks to increase job satisfaction along with the levels of enthusiasm and dedication that an employee has to their job and your company. Employee engagement software helps organizations take a more proactive approach, strengthening the employment relationship and creating an environment where employees can thrive.

Often this type of software supports staff monitoring (pulse, engagement, satisfaction, and stay interviews), channels of employee feedback, and employee recognition programs. The leading software providers in this category provide insights, recommendations, and actionable strategies to improve and maintain high levels of employee engagement and track variances over time.

What type of business should invest in employee engagement software?

Although engagement is important at all stages of business growth, employee engagement software is best once core HR systems (like hiring, onboarding, payroll, and benefits) are optimized and you have the staff capacity to implement and intentionally manage engagement. Generally, this is when your staff headcount steadily increases, and a solid workplace culture has been established. Other reasons to begin using employee engagement software are when retention becomes an issue or signs of an unhealthy workplace culture start to present themselves.

Benefits Administration Software

Whether you offer benefits through a professional employer organization (PEO) or on your own, software that helps your HR team administer these benefits is key. Unless you are a trained benefits management administrator, understanding plan options, prepping for new hires, managing open enrollments, maintaining reporting, and monitoring compliance can be a lot. Accuracy is essential, and record-keeping procedures are critical.

A PEO helps small businesses acquire great benefits packages at affordable prices through the established co-employer relationship, and will manage many of the necessary tasks related to enrollment, administration, and reporting. If you opt to offer benefits to your employees through a traditional benefits broker or other third-party insurance provider, often they will include software in the package to support benefits administration. The tools provided vary significantly in functionality and ease of use. Still, most will have some support in helping with new hires, open enrollment, managing your plan, and resourcing your employees.

What type of business should invest in benefits administration software?

Investing in benefits administration software is a good idea if you provide any benefits to your employees. Again, many benefits providers working directly with businesses will have an application for you. Just note that capabilities and functionality vary greatly from one provider to the next, and additional systems may be needed to administer your employee benefits program fully.

Offboarding Software

Just as important as how you help employees transition into your organization is the process of offboarding (helping them transition out of the organization). Sometimes integrated into your HRIS or onboarding system are capabilities to ensure proper offboarding. This can include noting the type of separation, deactivating benefits and systems access, processing final paychecks, and completing out-processing paperwork and exit interviews.

Because financial, legal, and internal concerns may result from an incomplete or non-compliant termination, having offboarding software is essential.

What type of business should invest in offboarding software?

Stand-alone offboarding software may not make financial sense for many small businesses. But if you are experiencing high turnover, employ a significant number of seasonal staff, or have multiple compliance steps that come up during terminations, investing in this software or acquiring an HRIS with this software capability is a good idea.

“Businesses have many critical responsibilities related to taking care of their employees. It’s really a no-brainer to invest in HR software that helps you standardize and automate key tasks,”

Pros & Cons of Pros & Cons of HR Software

  • HRIS is a one-stop-shop solution that integrates various types of software into one platform
  • HR software increases efficiency and productivity
  • Many software now integrate AI and machine learning to eliminate errors, automate routine tasks, and provide actionable insights
  • Can get pricey to acquire one or more types of HR software
  • Individual software tools may not integrate with others
  • Software that doesn’t grow with you causes frustration and adds expenses

The Bottom Line

Any business can utilize and realize tangible benefits from acquiring a cloud-based HR software solution. It becomes even more critical when you do not have a dedicated HR department, are experiencing dynamic changes in the size or complexity of your business and workforce, or are looking for efficiencies by leveraging technology. You will see increased ROI if you select a comprehensive HRIS or one or more stand-alone software options for various workforce management tasks.

HR Software Frequently Asked Questions (FAQs)

HR software is tech tools that help staff execute and manage various HR tasks. Different types of HR software are focused on single functions along with those that are comprehensive all-in-one platforms. With the variety of software on the market, it is easy to find one that meets your needs and grows with your business.

HR software varies significantly in price depending on the functionality and type of software. Generally, an HRIS may have a higher price tag because of its various functions. Many platforms require a base fee plus a per-employee monthly fee that can range from $5/employee/month up to $60/employee/month or higher. When evaluating software, consider not only the costs but also the efficiencies and increased productivity they can provide in the long run.

There are some HR software, like payroll, that you should invest in right away. Business needs, including growth and changes in your workforce, will dictate others. You would also invest in HR software to strengthen specific areas or to provide tools that non-HR-trained staff can leverage to complete common HR tasks.

Our HR Software buying guide is a great place to start. We researched and compiled a list of our top HR software picks to help you find the right solution for your business.