From recruiting and onboarding to benefits administration and payroll, human resources (HR) software assists your company in every aspect of your employee life cycle. Individually, these programs can save you time and money. Together, they have the added benefit of giving your employees a single solution for all their HR needs.
This guide provides in-depth information on nine primary types of HR software.
Human Resources Information System
Human resources information systems (HRIS) are HR software that play dual roles. They centralize all staff-related information—like worker data, job data, and compliance records—and give your employees access to their time records and personal information.
A comprehensive HRIS may include additional features, like payroll and benefits administration. While a comprehensive solution may appear expensive, consider your options, as it’s probably more affordable than you think. Going this route also future-proofs your business since you have all the core HR tools you need to manage employees.
Example
Rippling, our recommended HRIS provider, houses all your employee data in an intuitive platform. It also offers a wide range of HR tools to handle the entire employee lifecycle. What sets it apart from other types of HRIS software are its non-HR modules for managing expense claims, computer devices, and employee software access.
Rippling’s reporting tool lets you select data points and add filters to create custom reports from employee and payroll data. (Source: Rippling)
HRIS (Human Resource Information System), HRMS (Human Resource Management System), and HCM (Human Capital Management) are all software that support HR functions, but they differ in scope and focus.
An HRIS primarily helps businesses manage employee data and core HR processes, such as payroll, benefits, and time tracking. These systems are typically database-driven and can be used to store and track a wide range of employee data, such as contact information, job titles, and salary information.
An HRMS is more comprehensive than an HRIS, with additional features that go beyond day-to-day HR administrative tasks. Its functionalities can include talent acquisition, learning and development, and employee engagement.
An HCM, on the other hand, supports a wider range of HR functions. It has everything that an HRIS and HRMS can offer, plus succession planning and compensation management. Its HR features are also designed to help HR leaders create strategic people management initiatives to support overall business objectives.
Here’s a simple table that summarizes their key differences:
HRIS | HRMS | HCM | |
|---|---|---|---|
Focus | Employee data management | People management and analytics | Strategic HR tools and planning |
| HRIS features +
| HRMS features +
|
Applicant Tracking System
An applicant tracking system (ATS) is a recruiting software that streamlines your hiring process. It helps you manage applicants for every job post you’re hiring for, whether that’s one or a dozen.
A high-powered ATS will even have integrations with popular job boards, allowing you to write your job ad, post it, and track applicants as they go through the hiring pipeline. These functionalities allow you to save time by reducing the manual work required to post jobs and review applicants.
Some ATS can also help your company stay compliant. For instance, when you post a job ad, it can add applicable language or terminologies that comply with Equal Employment Opportunity Commission (EEOC) laws, reducing your company’s risk.
Example
Zoho Recruit, our recommended ATS, allows you to post job listings, collaborate with hiring team members, and advance candidates through stages. Its artificial intelligence (AI) tool, Zia, also helps you save time when reviewing resumes, as it instantly ranks and recommends candidates based on your hiring requirements.
Zoho Recruit has a Quick Apply tool that lets candidates apply to your job postings with ease. (Source: Zoho Recruit)
Onboarding & Offboarding
Onboarding tools streamline your new hire process, guide employees with the onboarding documents they need to prepare, and help ensure your business stays compliant. Plus, whenever you hire an employee, you’ll need to complete employment verification paperwork for the federal government and submit state new hire reports. Onboarding software walks you through these requirements every time, so you don’t miss a single step.
Offboarding an employee, whether they were terminated or resigned, is crucial to ending the employment relationship. For example, you may need to provide a departing employee with detailed Consolidated Omnibus Budget Reconciliation Act (COBRA) information. If you don’t, you risk compliance fines and penalties. Creating your own offboarding process can be tedious, so using software will streamline your needs.
Example
BambooHR, one of our recommended onboarding software, is an HR system that offers basic to advanced tools to manage HR processes. Its onboarding module allows you to create custom preboarding packages, gather electronic signatures, track onboarding tasks, and set up emails to welcome new hires.
From a welcome text to an easy-to-follow checklist, BambooHR gives new employees a great onboarding experience. (Source: BambooHR)
Time and Attendance Software
Time and attendance software allow you to track employee work hours and capture the necessary time data to pay workers. It also helps you manage paid time off (PTO) requests and monitor leave accruals, which removes the need for manually calculating vacation accruals.
Without this software, managing employee attendance will be challenging and can increase your exposure to potential problems, such as time theft and buddy punching.
Example
Homebase, our top-recommended time and attendance software, has apps that enable you to turn tablets, computers, smartphones, and POS systems into time clocks where employees can clock in and out. With its GPS tool, you know exactly where your team members are when they clock in. It even has a scheduling feature, with a drag-and-drop interface for easy shift planning.
Homebase’s time tracking tools provide you with an easy way to compute work hours, overtime, breaks, and wages. (Source: Homebase)
Employee Performance Management
Effective performance management involves setting achievable goals, reviewing performance, and improving performance. This sounds simple, but it’s a massive undertaking—and HR software can help your managers more effectively manage their teams.
With an employee performance management system, your people managers and employees can input work goals into the software and use these targets to track progress. Some software can even deduce where team members may require additional development, giving your people managers excellent insight into an employee’s professional development needs. Without this advanced software, managers fly blind, not knowing where gaps in productivity and training may lie.
Example
AssessTEAM, our top recommended performance management software, supports various evaluation formats. It can handle semi-annual and annual reviews, peer evaluations, employee self-assessments, and new hire check-ins after the worker’s first 30, 60, and 90 days. You can also set clear goals and results criteria like key performance indicators (KPIs) so employees can see where to improve.
AssessTEAM measures employee performance using specific deliverables. (Source: AssessTEAM)
Payroll
The best payroll software streamlines your payroll processes. Because of how central it is to a company’s HR needs, it’s often the first HR software that small businesses add.
Be aware that not all payroll systems are created equal. You’ll need to figure out what’s important to you and find a payroll software that meets those needs. At a minimum, you should look for software that calculates or covers:
- Employee gross pay
- Deductions
- Taxes
- Employee net pay
- Direct deposit payments
It’s also a good idea to ensure your payroll system integrates with your company’s benefits provider. This helps you save time from manually tracking benefits-related deductions. And, if you have remote employees, you’ll need software that runs payroll in every state where you have an employee living and working. You may even need one that lets you print payroll checks to pay workers.
Further, the software you choose must give your employees access to their payroll records. Most states require you to give employees immediate access to their current and past payroll records, including pay stubs, itemized deductions, and hours worked.
Example
Gusto, our recommended payroll service for small businesses, offers a user-friendly platform for paying employees and contractors. It lets you process payroll as many times as you need in a month. If you activate its AutoPilot feature, Gusto will process your payroll automatically each pay period—provided you don’t expect any changes to your pay runs.
Gusto lets you add employee time data and additional earnings (like bonuses) directly into its payroll solution. (Source: Gusto)
Learning Management System
A learning management system (LMS) gives your company access to training and development courses for your employees. When combined with an employee performance management system, such software can help you fill those skills gaps in your workforce.
Some states require you to provide annual sexual harassment and anti-discrimination training to all your employees—and the best LMS can help you stay compliant by automating this process for compliance. It can have your employees sign an acknowledgment that they completed the training and provide you with updates as laws change.
Example
360Learning, one of our recommended LMS for small businesses, offers customizable templates and a course builder with an AI tool that suggests course outlines, quizzes, and illustrations. It even automatically enrolls employees in training programs based on their role, location, certification requirements, and other criteria.
360Learning provides an intuitive dashboard to engage learners. (Source: 360Learning)
Employee Engagement
Employee engagement greatly impacts employee retention. If your employees become disengaged, they’ll be less productive, less happy, and more likely to leave.
Employee engagement tools are often part of other HR software types like performance management systems. These tools can help you keep a finger on the pulse of your organization. It gives you insight into the programs you need to engage them and allows you to track how those activities translate into productive results.
The best employee engagement systems have communication and recognition tools to help boost engagement. It also sends automated, anonymous, and regular surveys to employees. These surveys are brief, often taking less than five minutes to complete. The anonymity of the surveys ensures you get honest and transparent feedback that you can put into action.
Example
Connecteam, one of our recommended employee engagement software, offers staff recognition features and multichannel communication options that allow employees to connect and collaborate in real time. Its survey tools also help you gather your team’s feedback and evaluate training needs, performance drivers, and overall employee sentiment.
Connecteam provides real-time results, allowing you to track survey responses as soon as they are submitted. (Source: Connecteam)
Professional Employer Organization
Not technically HR software, a professional employer organization (PEO) is a third-party HR outsourcing company that businesses partner with to manage their HR needs. Essentially, a PEO can take your HR duties off your shoulders, freeing up your HR team to focus on employee engagement, training, benefits, and other strategies to improve a worker’s experience while employed with your company.
Think of their service this way: it’s an outsourced HRIS. Instead of your HR team handling everything in-house, your PEO handles matters for you. It can be a cheaper option than hiring new employees to handle individual HR tasks. Plus, you get the added benefit of sharing compliance with the chosen PEO, so they have a vested interest in your company avoiding lawsuits and fines. Although traditional PEOs tend to run payroll and perform other tasks within the software for you, you will have access to it and should be able to run reports, change employee data, etc.
Example
Justworks, our top-recommended PEO, is ideal for small businesses with limited HR experience because it covers everything from hiring to retiring, handles payroll in multiple states, provides access to enterprise-level employee benefits, and assumes tax liability. Best of all, it offers an affordable PEO service, with monthly fees that start at $59 per employee.
Justworks has a Benefits Center, which lets you and your employees select and enroll in benefits plans. (Source: Justworks)
Benefits of Using HR Software
Whether your business is just getting started and the only HR software you’re using is payroll, or you’re an established business running multiple types of HR software, the biggest benefits are the same: time and cost savings.
HR software can automate many of the tasks you’d otherwise need employees to do. This allows your HR team to focus their time on handling more productive tasks, tackling long-term strategic goals, and building an attractive company culture. In turn, this reduces the number of staff you need to hire, thus reducing your costs.
On top of that, there are some other benefits you’ll see:
- Reduced errors
- Improved organization of documents and employee data
- Streamlined processes
- Accurate analytics
- Legal compliance
Mistakes and compliance issues can be costly for your company, so using HR software can help you save in that way too.
Bottom Line
HR software can change the way your company operates. You can choose an HRIS or PEO for an all-in-one solution—or you can go the a la carte route, adding new software as your small business needs them. By understanding the different types of HR systems available, you can choose those that meet your business needs and budget for more efficient internal processes.
