Employees play a crucial role in the success and growth of any organization. The manner in which employees are treated and managed contributes greatly to building an amazing team. That’s why many companies from all over the world are investing in various strategies to streamline employee management and provide them with beautiful experiences at work.

HR software is one such tool that makes this process of employee management easy for organizations. Tailored to the specific requirements of each organization type, HR software stands as a valuable tool that simplifies the intricacies of employee management. For instance, addressing the distinct needs of various businesses, HR software for small business provides an array of functionalities that streamline diverse HR responsibilities. Right from managing the team and streamlining workflows, to delivering good employee experience, this tool offers everything that will help you keep your employees happy and motivated. Therefore, it is a perfect partner for your HR team from employee onboarding to offboarding.

Did you know the global HR software market size is projected to reach $33.57 billion at a CAGR of 10.10% by 2028? No wonder the HR software industry is growing tremendously.  

However, considering the number of HR software available in the market today, it is pretty challenging for companies to select the best one for their team. In this post, we will share a definite guide to choosing the right HR software in 2023.

10 Questions to Ask Yourself Before Shortlisting HR Software

Before getting into the selection process, it is wise to have a solid understanding of your existing HR workflows, the challenges you face, and how you wish to overcome these challenges. Therefore, asking yourself the right questions is important. 

Here are a few critical questions that would prove useful during the HR software evaluation process.

  • What are our greatest HR challenges and frustrations?
  • What are our organization’s most critical HR needs?
  • How will the said software help us overcome our challenges?
  • Does the software provide any additional features or benefits?
  • How much time would it take to get the software up and running?
  • Can we integrate this tool with other platforms that we use? How does the integration process work?
  • What is our budget for investing in HR software?
  • Will the software scale as per our growing needs? If yes, what would the pricing structure be like?
  • Does the software offer any kind of training to our team?
  • What kind of customer service are we looking for? Will the support team help us with immediate solutions if something goes wrong?

Once you have answers to these questions, you can go forward with beginning your search.

7 Steps to Follow When Choosing HR Software for Your Business

Here is a 7-step guide to help you select the right HR software for your team.

Step 1 – Form a Team of Decision-Makers

Choosing a new HR software should not be the decision of the HR team alone. It is important to involve key stakeholders and leaders from other departments, such as operations, finance, IT, marketing, sales, and more who will be the primary users of this software. This will bring fresh perspectives and unique insights to tackle workplace challenges and simplify every department’s operations. 

Mark Valderrama, the CEO and Founder Aquarium Store Depot suggests, “Identify the best representatives from every department, such as managers, team leads, executives, and so on who can offer valuable input. This will provide you with a thorough understanding of every department’s unique needs thereby helping you choose software that meets everyone’s requirements. Similarly, it helps you learn about their pain points and take actions to provide an optimal solution.”

Once you have decided on the team members, assign them clear roles and delegate responsibilities to each of them. Most importantly, convey your expectations right from the beginning to ensure efficient communication and collaboration within the team and streamline the decision-making process.

Step 2 – Evaluate Your Existing HR Tools

Once you have assembled a team, it is time to evaluate your existing tools, processes, and workflows to identify the bottlenecks and challenges in your HR department. Whether you are starting from scratch or considering an HR software upgrade, this evaluation is mandatory as it helps you identify the strengths and weaknesses of your existing processes. 

Tom Miller, Director of Marketing at FitnessVolt shares, “By determining what is working well for your company and what is not, you can make thoughtful purchasing decisions that will not only improve your processes but also make them foolproof.  Similarly, it will help you learn how the new HR software will revamp your existing processes, improve your work performance and accomplish your goals.”

Step 3 – Identify the Must-Have Features

After that, the next step is to make a list of features you would want in your HR software. Ask the members of your newly-formed team to make a comprehensive list of features based on the tasks they undertake in their day-to-day work lives. This will give you a fair idea about the requirements for your new HR software. 

Firstly, divide these requirements into two categories – must-have features and nice-to-have features. By doing so, you will have a concise feature list that can be used as a reference during the software selection process. It will also help you eliminate those software products that do not meet your requirements without any hassles. 

Some of the key features you should look for in HR software are as follows –

  • Recruitment

To manage the entire hiring process right from job posting, applicant tracking, interview scheduling, and candidate evaluation.

  • Onboarding

To simplify the new hire onboarding process with automated workflows for collecting employee documentation and providing them with various resources for transitioning into their new role. 

  • Employee data management 

To provide you with a centralized database to store and access crucial employee information, such as personal details, employment documents, experience letters, and so on.

  • Attendance tracking 

To track employees’ attendance, their clock-in and clock-out times, overtime, and more. 

  • Leave management 

To manage and approve leaves and employees’ time-off requests. It also provides a means to view leave balance and streamline your entire leave approval workflow.

To calculate salaries, manage tax and other deductions, and generate pay slips with minimal manual intervention.

  • Employee performance reviews 

To create a streamlined performance review and appraisal process for the employees. 

  • Employee feedback 

To capture 360-degree feedback from employees and the company and build effective performance improvement plans.

  • Learning and development 

To identify the skill gaps among the employees and offer them learning and training opportunities.

HR Management Software


Step 4 – Conduct a Preliminary Research

Now that you are aware of the features you wish your HR software to have, it is time to research potential platforms and the features each of them offers. To generate a list of possible solutions, search for the best HR software on various search engines. 

Reach out to industry peers, connections, or other HR professionals for seeking recommendations. Meanwhile, you can read the software reviews on software review platforms, such as G2crowd, Capterra, and GetApp or visit community forums to gather the user’s experience using the software. 

Katie Holmes, Marketing Expert at Onsite First Aid Training, explains  “Exploring vendor websites to learn about their feature offerings and reading customer case studies is beneficial as it will give you genuine insights into how the software helped its customers in improving their HR processes.” 

Once that is done, it is time to create a shortlist of HR solutions that align with your requirements. It is best to have at least 5 vendors on this list.

Step 5 – Sign Up for a Free Trial to Evaluate the Software

Now, it is time to register for the free trials of the software or sign up for product demos to see the software in action. This will help you assess the software and understand how it can support your HR processes. 

Start by attending a demo session to learn more about product features and the functionalities they offer. Apart from the features, pay attention to the product design and user experience it offers. Do not hesitate to ask questions during these demo sessions to resolve your queries. This will also help you gauge the vendor’s ability to address your queries.

Kenny Kline, President and Financial Lead at BarBend adds, “Leverage the free trial the software provides to get some hands-on experience with the software. Have your entire team try out the software and collect their feedback.” 

Follow this step for all the software in your shortlist. This will help you compare the performance of each of these software, and team feedback. It will also help you learn how well the software fits your organization’s requirements. As a result, you will be able to make an informed purchasing decision.

Step 6 – Make the Final Decision

Meanwhile, present your findings about the shortlisted software to the company’s key stakeholders and share with them how the software can boost your HR processes. Seek their input and opinions about the chosen software and be ready to answer their questions. Hold a collaborative discussion to choose an HR software taking into account the organization’s needs and business objectives.

Once you have made the final decision, sign the contract or subscribe to a paid plan. Devise a change management plan and get ready to implement the new software in your organization. 

Wrapping Up

No doubt, the process of choosing the right HR software can be daunting for many teams. However, with proper research, a systematic approach, and thoughtful planning, this tedious process can be simplified to make an informed decision that benefits the entire organization. 

So, follow the steps we mentioned in this guide and get started with shortlisting the best HR software for your business. We are certain that this guide has helped you learn how to choose the right HR software that delivers desired outcomes and streamlines various HR activities.


Author Bio:

Kruti Shah

Kruti Shah is a content writer and marketer at The Marketing Drama. She loves to write about insights on current trends in Technology, Business and Marketing. In her free time, she loves baking and watching Netflix. You can connect with her on Linkedin.

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