Nearly 8 in 10 HR decision makers have regretted their software purchase. Only 24 percent of business leaders in Europe feel that their HR system is having a positive effect on their business.

Many software implementations fail or don’t live up to expectations. However, this isn’t always because of a problem with the product, but rather the software selection process was flawed.

Objectives weren’t properly drawn up, budgets weren’t defined, not enough thought was put into must-have versus nice-to-have features, and there wasn’t any future-proofing.

If you’re a small business, you can’t afford (time or money) to make these kind of mistakes. That’s why we’ve called on our conversations with small businesses, as well as data and analysis to help you make the right decision in your HR software selection process.

Tip 1: make an investment to save on admin costs

It’s tempting to choose the cheapest HR software you can find, even if it’s missing some features, as it can be difficult to work out the return on investment.

Here are some figures that should help justify why you need to fork out more during the HR software selection process.

According to a BreatheHR TCO report, in the UK, the median average cost of CEO time spent on HR admin is £18,700 each year, which is 21 percent of the median average salary for a CEO. The report also says that the time that office managers or operations managers spend on HR has a median average value of £4,534 each year , which is 19 percent of the salary of these roles.

Calculations from HR software provider Employee Connect said that letting a human resources system handle leave management could result in savings of $84,036, or 125 working days

It also says: “These cost-effective and time saving benefits are even larger when it comes to automating performance management and managing applicants correctly.

And: “Similar savings are associated with the elimination of emailing payslips, the menial administration work surrounding performance management, as well as time spent searching for employee files and data.”

There are also less tangible benefits to making an investment in an HR system:

  • Data security – using spreadsheets or manual methods to record HR data, leaves your company open to potential data breaches. Confidential information can so easily be shared —accidentally or deliberately— via email. If you have an HR system in place with robust security features, you can ensure that individual employees can only access and share the data that is relevant to them, and that confidential information doesn’t end up in the wrong hands.
  • Avoiding compliance fines – when you have all the data in one place, and it’s up-to-date and accurate, it’s easier to report this data to regulators to ensure that you can keep up with compliance laws. Many HR systems have features that specifically allow you to keep up with certain regulations, such as the Obama-era overtime rule, UK’s Gender Pay Gap Reporting, or OSHA rules on illness and injury reporting
  • Company culture – by choosing an HR system with features such as employee engagement and satisfaction, you can keep a track of the areas of your company and their job that your workers really care about, as well as what is making them unhappy, and suggestions they have to improve these issues. If you have employees working in different offices across the world, HR software can also help bring these workers together and create a sense of community.

You can always look for HR software with a free trial to enable you to test before investing.

Tip 2: prioritize must-have and nice-to-have features

One of the main mistakes that companies make during the HR software selection process is to not properly determine what the system will be used for, and what functionality is required to make this happen.

Your company needs clear, specific, realistic objectives, as well as ways to measure these objectives post implementation.

HR has that extra complication of encompassing many features and functionalities that can also be bought as standalone solutions.

In terms of features, according to data from 10,000 small to medium sized business that are looking to implement HR software, the key feature that an HR solution should have is personnel tracking. This is closely followed by applicant tracking, payroll, and time and attendance.

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This points to the importance of evaluating during the HR software selection process whether your business needs an all-in-one human resources solution that incorporates all these elements, or whether you need core HR functionality at this stage, and will purchase additional standalone software later down the line.

If your objectives are clear, then you will be able to more easily prioritize must-have features, and if you’ve already worked out the ROI of your HR solution, then you’ll be able to identify which nice-to-have features you can afford.

Tip 3: ask about integrations and workflows

Maybe you are prioritizing core HR functionality at the moment, but your plan is to incorporate recruitment, payroll, and time and attendance software in 6-12 months. The easiest option would be if the software had modules for these solutions that you could bolt onto your existing software.

At the very least, you’d need to be able to integrate these modules with your core HR solution.

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The issue of integrations is also crucial in complying with regulations. Take The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 in the UK. This law requires you to report details such as mean and median of the gender pay and bonus gap, as well as the proportion of men and women in each quartile of the organization’s pay structure.

To properly comply with this regulation, you need data from both your payroll, and your HR system. If these systems don’t integrate that it means a lot more manual work with importing and exporting data, and an increased chance of wrongly reporting your company’s information.

What help can I get with the HR software selection process?

It can take more than a year to complete the software selection process, for some types of solutions. If you want to help speed the process, and simplify the software vendor evaluation and selection process, take a look at our software scorecard for HR.

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The scorecard allows you to:

  • Input your price range for the required solution
  • Select and prioritize the features you require
  • Consider integrations
  • Select the devices you need to support.

This software scorecard is an independent way of creating a shortlist of apps that you want to further investigate to see if they meet your needs, as opposed to relying on promotional information software providers give you when pitching their product.


For more information or help using the scorecard, email me on karen@getapp.com.