Overview of HR Software + Best Tools

Table of contents

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What is HR Software?

HR software — sometimes referred to as human capital management software, human resource management system, or human resource information system — is a digital tool designed to increase efficiencies and productivity across human resources. The best HR software automates and streamlines payroll processing, performance management, time tracking, employee onboarding, offboarding, and other frequent activities in people management.

Most Purchased HR Software

Workday stands out as the most purchased software in the HR Software category according to Vendr's internal transaction data, with an impressive average contract value of $434.16K. This leading position reflects Workday's comprehensive suite of human capital management solutions and its significant impact on the HR strategies of businesses.

Rippling follows in the second spot, having an average contract value of $112.52K, which highlights its growing influence as a platform that streamlines various HR and IT processes under one roof.

Gem takes the third place, with its recruiting software fetching an average contract value of $49.63K, suggesting its effectiveness in helping companies find and engage top talent.

Lever, positioned fourth, presents a modern applicant tracking and talent relationship management tool valued at $19.40K on average per contract, which showcases their commitment to improving the recruitment process.

Deel rounds out the top five with an average contract value of $346.58K, indicative of their specialization in global payroll and compliance, ensuring businesses can hire anyone, anywhere with ease.

Most Renewed HR Software

Lever emerges as the most renewed software in the HR Software category, with Vendr's internal transaction data showing an average renewal value of $18.14K. This impressive rise to the top spot underscores Lever's strong user engagement and satisfaction with its applicant tracking system and talent relationship management tools.

Gem follows closely with an equally noteworthy ascent to the second position, boasting an average renewal value of $53.62K, which reflects the persistent value it provides in talent acquisition and engagement.

Rippling claims the third spot, highlighting its consistent performance and user satisfaction with an average renewal value of $123.69K, demonstrating the platform's comprehensive approach to HR and IT services.

A new player, BambooHR, makes the list at fourth, indicating a growing preference among HR professionals with an average renewal value of $20.55K, a nod to its user-friendly HR software for small and medium businesses.

Workday rounds out the top five, maintaining a significant presence with an average renewal value of $323.48K, which speaks to the enduring enterprise-level solutions it provides in human capital management.

Most Recently Purchased HR Software

Rippling has asserted itself as the most recently purchased software in the HR Software category, as indicated by Vendr's internal transaction data, with an average new purchase value of $95.78K. This underscores Rippling's relevance and its burgeoning appeal among businesses seeking an integrated system for managing their workforce and IT operations.

Making a surprising debut on the list, Ashby comes in second, showcasing a growing interest in their solutions with an average new purchase value of $28.13K. This entrance highlights Ashby's potential to shake up the HR software space with their innovative approach.

BambooHR stands firm at third, signaling its solid position in the market with an average new purchase value of $3.97K, recognized for its accessible and strategic HR platform tailored to small and medium-sized businesses.

Workday continues to be a mainstay, securing the fourth rank with a significant average new purchase value of $692.41K, reflecting its continued adoption by large enterprises in need of comprehensive human capital management software.

Finally, Gem occupies the fifth spot, with an average new purchase value of $21.65K, indicative of its growing use among companies looking to optimize their sourcing and recruiting processes.

Signs your company needs HR software 

If you currently experience one or more of the following symptoms, your organization is definitely in need of HR software: 

• Administrative burdens due to a growing workforce.
• Existing HR processes cause (or are at risk of causing) delays and errors during the employee lifecycle.
• Limited scalability across current HR systems and processes.
• Compliance risks associated with manual tracking and compliance management.
• Difficulty tracking employee performance and employee engagement metrics.

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7 different types of HR software + key features 

Here are some of the most popular types of HR software, along with the most valuable features each has to offer. 

Human resource information system (HRIS) software 

A Human Resource Information System (HRIS) functions as a centralized repository for employee information and data. HRIS software facilitates HR tasks such as employee benefits administration, time-off requests and approvals, and time tracking. The majority of HRIS software suppliers only cater to businesses employing U.S. citizens. Key features of HRIS software include:

• Time tracking function for monitoring employee attendance in real-time and managing payroll processing.
• Employee self-service portals for accessing personal information and managing PTO time-off requests, often within a mobile app for ease of use.
• Employee benefits administration modules for enrolling employees in health insurance and retirement plans. 
• Workflow automation functions that streamline HR processes and approvals.  

Payroll software

Payroll software automates payroll processing, ensuring accurate, timely payments to employees while simplifying tax calculations and maintaining compliance. Key features include: 

• Templates for generating payroll reports and employee pay stubs. 
• Seamless integration with HRIS software for faster data transfer and easy employee record management. 
• Mobile app accessibility to simplify payroll management when in the field or without access to a desktop computer.
• Real-time updates on applicable tax rates and any regulatory changes to ensure compliance.

HR compliance software

HR compliance software helps businesses adhere to local, regional, and national labor laws, regulations, and industry standards. Maintaining continuous compliance minimizes business risk and associated penalties. Key features include: 

• Notifications and alerts for regulatory changes that might impact HR processes.
• Creating, distributing, and tracking your company’s HR policies and procedures with policy management tools.
• Maintaining compliance records with audit trails and documentation capabilities.
• Learning management systems with an intuitive user experience for employee compliance training and tracking completion. 

Employee onboarding software

Employee onboarding software enables the smooth integration of new hires into the organization while improving the employee experience and time-to-productivity. Key features include:

• Onboarding process templates for standardizing and automating new hire workflows. 
• Smooth integration with HRIS software to seamlessly transfer employee information and documentation to various departments.
• Performance reviews and feedback functions within the software for monitoring employee progress.
• Desktop- and mobile-friendly onboarding portals or APIs that are ideal for remote or distributed teams.

Talent acquisition software

Talent acquisition software streamlines your organization’s recruitment process from talent sourcing and vetting candidates to onboarding successful applicants into your systems and optimizing complex processes. Key features include: 

• An Applicant Tracking System (ATS) to manage open job posts, source candidates, and schedule interviews.
• Integrations with popular job boards and social media platforms to reach a broader pool of candidates.
• Easy-to-use analytics and dashboards for tracking the performance of recruiting efforts and associated ROI.
• Succession planning tools for identifying and developing employees for future leadership roles within the organization. 

Human capital management (HCM) software 

HCM software typically includes every functionality of an HRIS plus additional talent management features. Many HCM solutions are designed to simplify global operations at large enterprises, including customizations for multi-currency, multi-lingual, and country-specific formats. Key features include: 

• All features of HRIS software.
• Employee onboarding.
• Employee performance monitoring.
• Succession planning.
• Salary management.
• Reporting and analytics.

Human resource management software (HRMS)

Most HRMS systems include all of the core features and elements of an HRIS and many also include HCM and talent management functionalities. Key features include: 

• All or most features of HRIS.
• All or most features of HCM.
• Payroll management components.
• Time and labor management.

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How to choose HR software 

To accelerate your journey to purchasing the best HR software, we recommend following these steps: 

1. Assess your organization’s top HR needs and priorities, as well as scalability and tech stack integration requirements. 
2. Identify a handful of solutions to research and make note of their user-friendliness, customer support options, and onboarding processes to minimize the learning curve and time-to-value. 
3. Compare and contrast features and customization options against your priorities, and ensure pricing is within budget.
4. Request demos and/or trials of the most promising solutions to ensure the platform you purchase will solve your specific HR needs with a positive ROI. 

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HR software FAQs

Here are some additional questions that often surface from those evaluating HR software for purchase. 

What level is technical proficiency is required to use HR software? 

Most HR software is designed to be user-friendly and accessible to business users with basic technical skills. In other words, if employees are comfortable with common software such as word processing applications, project management tools, and email clients, they should be able to get up to speed with HR software. 

What are the benefits of using HR software?

Some of the main benefits of using HR software include:

• Increased productivity and operational efficiency. 
• Enhanced employee experience and engagement. 
• Improved compliance and risk management. 
• Faster, more informed decision-making. 

How much does HR software cost?

The total cost of HR software depends on multiple factors, including the number of users your organization will have, the features required to meet your business’s needs, and the software deployment method, either on-premises or a cloud-based platform.

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