HR software: How shall I select the right HR software?
Selecting the right HR software always starts with the question of what it actually has to be able to do. Which HR processes would you like to digitally map and support in your company? What technical requirements should the software meet? Is the HR software used exclusively for HR administration? Or, is the goal to digitize recruiting? Is it about payroll, time management or rather digital personnel files? Should the HR software support employee retention and leadership culture? These questions are just a few of many that need to be answered on the way to the optimal HR IT architecture and the selection of suitable HR software.
Every company pursues its own HR digitization approach and needs a solution that is tailored to it. The HR software must provide answers to the company’s different customer challenges, fit into the existing IT landscape, be technically specialized and bring the desired functional depth. Not every HR software provider meets the necessary requirements; and not every software manufacturer is suitable for every HR digitization strategy for one very simple reason: almost every provider pursues its own product strategy to which the further development of the modules and functionalities is specifically geared.
The HR software provider market has grown enormously in recent years. No wonder, since the demand for HR IT solutions has increased since the COVID-19 pandemic. And the momentum will continue. Analysts are forecasting growth of over 70 percent for the industry by 2025. For every HR manager, the following applies more than ever: those who have the choice are spoiled for choice. But let THAT be our concern. We accompany your company on the way to an optimal HR IT architecture and advise you on the selection of the right HR software.
CLEVIS has been supporting customers with HR digitization for over 10 years, regardless of the provider. We know the market players and have a rich experience across providers with a lot of background knowledge about the various strategies, the teams involved, as well as their performance. We compare not only the functionalities of the software applications for you, but also provide you with the broad picture that enables you to make the best decision – for the perfect match between your HR goals and the right HR software provider.
- HR Software: the Selection Procedure
- HR Software Provider
- How Can HR Software Help to Fill Vacancies Faster?
- How Can HR Software Support Employee Retention?
- How Can HR Software Improve People Management?
- To What Extent does HR Software Finally Help to Deliver Reports Suitable for Management?
- Can HR Software Solve the Shortage of Skilled Workers?
HR Software: the Selection Procedure
HR software selection is an important process towards digital HR excellence. If unsuitable providers are selected for individual components, this leads to a technical failure and a considerable waste of time and money. The selection process for the right HR software is roughly comprised of the following four steps: detail scoping, selection process, contract negotiations and implementation (see the graph). The degree of deepening is determined by the technical process that is to be mapped.
We recommend an iterative approach that increases the level of detail along with the progress. Nevertheless, it is essential to understand the technical requirements in depth at an early stage in order to be able to understand and document subsequent dependencies in relation to the data flow across the modules. In addition to the general decision-makers, specific experts and, depending on the corporate culture and responsibility, internal IT, data protection and the works council should be involved in the process.
HR SOFTWARE - THE MARKET LEADERS IN THEIR SEGMENTS
HR SOFTWARE PROVIDER: PERSONIO
No HR software has turned the provider market upside down in recent years as the HR start-up Personio from Munich. The success factor was the consistent customer orientation in terms of the target group of small and medium-sized businesses and the perfectly fitting product features. Personio offers everything you need for digital HR management, including an HR core system, the digital personnel file and self-services. In addition, there is a slim but sufficient recruiting tool. With an increasing focus on larger customer segments of up to 2,000 employees, Personio is consistently expanding its product to meet their needs.
This includes also the platform strategy. It makes it possible to add further modules from other providers to the existing applications. For example, Cornerstone’s learning solutions for mapping further digital education can be easily integrated into the platform via standard integrations. It requires little to no implementation effort for small mid-sized companies to be able to use a system that can only be customized to a limited extent to suit their own needs. It is only questionable whether its requirements are sufficient for larger and medium-sized companies.
HR SOFTWARE PROVIDER: SAP SUCCESSFACTORS
SAP SuccessFactors currently offers the following HR modules: HR Core, Payroll, Recruiting, Performance & Succession and Learning. In the future, all previous HCM software products from SAP will be replaced as cloud versions at SuccessFactors. Afterwards, SuccessFactors, like many other cloud products, was compiled from various previous versions. One can speak of an overall high degree of maturity of the modules, but have to accept breaks in the user interface and in parts of the reporting. What makes SuccessFactors a strategically very interesting solution is its early positioning as a platform. So special modules, for example, can be purchased via a marketplace and integrated for recruiting employees or employees for third-party systems. The advantage for the customers is that they can dock new and innovative solutions to their own Successfactors Suite at any time and is therefore always state-of-the-art. In addition, with Employee Central, SAP has developed a very powerful solution for HR Core, which enables the customer to set up flexible international HR IT architectures.
The strategic orientation of SuccessFactors is correct, but it must be noted that teething troubles are still encountered in many core products. In addition, the high flexibility comes at a price. Furthermore, the skilled labor market is lagging behind experienced consultants and partners to implement SAP product innovation speed, often resulting in expensive and unsatisfactory implementations. The use of SuccessFactors is particularly suitable for larger companies. But medium-sized to larger medium-sized companies use the HR software solution from SAP as well.
HR SOFTWARE PROVIDER: P&I LOGAHR
P&I is one of the pioneers of HR digitization and is still successful in the market. There’s a reason behind it. With a very powerful payroll module in combination with powerful time management and powerful modules for HR administration, P&I basically offers everything that is needed for efficient personnel work. On the positive side, P&I offers all of these functions as a cloud version. New customers do not have to fear migration projects. The very interesting price-performance ratio of the HR software should also be emphasized. P&I offers extremely efficient options for HR administration. Today, however, modern HR must be able to do more than just manage the human resources.
Companies also need powerful recruiting and digital support when it comes to employee retention and development. Although these software modules are available from P&I, they are not broadly comparable with the configuration depth of the competition. The disadvantage for customers is that P&I, unlike what is usual in the HR software market, does not support a platform strategy. In other words, there is no way to dock innovative components via a marketplace. On the contrary, the current system, which is to be regarded as more of a closed technological system, is still presenting itself as a monolith to the customer. In addition to technical innovation deficits, this closed strategy very quickly reaches its limits when it comes to setting up international HR IT architecture, the data flow and reporting required for it. However, it is definitely interesting for certain companies to only use P&I as a payroll provider and to also fall back on other solutions.
HR SOFTWARE PROVIDER: HAUFE
Haufe is a kind of mixture of system house and HR software manufacturer. With Haufe Talent Management, the company offers a very powerful recruiting and talent management suite. In addition, Haufe offers numerous efficient HR software solutions, such as certificate management, OKR or a solution for the management of agile teams. In addition, the Haufe portfolio includes HR solutions from other well-recognized partners, such as the digital personnel file and self-services.
Haufe’s HR roots lie in the area of training and further education. This can also be seen in the product philosophy. This is geared precisely to the top HR topics of our time: finding, integrating, leading, retaining and developing employees. This enables Haufe to keep up with trends, such as replacing classic learning management with learning experience platforms, or helping to shape trends, as the example of the myOnboarding app shows.
With its HR solutions, Haufe is primarily aimed at companies with 500 to 5,000 employees and the public sector. Haufe has one disadvantage: it does not have its own HR core solution in its portfolio. The HR software offer is therefore best suited for customers who want to have very clear technical requirements solved by a real technical specialist. In this segment, Haufe offers attractive pricing, manageable implementation costs and effort, and good customer service. The HR software lacks configuration depth and flexibility compared to other providers.
HR SOFTWARE PROVIDER: WORKDAY
Workday is one of the best-known players in the global HR market and is also established in Germany. Like SAP, Workday sees itself not only as an HR system, but as an ERP system. The focus of the HR solution is on the end-to-end linking of the various modules. As one of the few HR software solutions, Workday consists of “One Line of Code” and not of various purchased solutions. This leads to a smooth flow of data and outstanding reporting options. In addition, the user experience is free of breaks in appearance and operation. Workday offers powerful options for classic HR core topics such as master data management, self-services, case management, etc. Workday also has strong modules for recruiting and talent management.
In sales, Workday is quite self-confident. This can be seen, amongst others, in the expectations regarding the scope of the solution, as well as in the rollout approach, pricing and implementation. Like all vendors, Workday systematically revisits its product strategy. The system now has open interfaces for the integration of third-party providers. Workday doesn’t fit every company. The HR solution assumes the desire to implement a sustainable HR strategy in the company and is also associated with a certain price. Anyone looking for a German payroll provider should also take a closer look, since Workday does not originally offer payroll systems in Germany.
HR SOFTWARE PROVIDER: REXX
Rexx is an old hand among HR software providers in a positive way. The Hamburg software company has long offered a niche for customers with a focus on digital HR administration and recruiting, but without payroll and time management. In addition, the company consistently brought its solution to the cloud at an early stage. The range of modules extends from an employee portal to the digital personnel file, powerful self-services, a good HR core system to recruiting and talent management. The modules can be configured individually for each customer.
The solution is designed for classic medium-sized companies and is applied successfully there. Rexx is suitable for all customers who pursue their own HR approach and want to implement it with an HR system. In addition to the advantages of the software solution, Rexx also scores with an attractive license model in the middle price range. Unlike the big providers such as SAP or Workday, Rexx trains an internal customer team as part of the implementation so that they can set up the HR software system themselves. Although this leads to an increased burden for those involved in the project, it enables them to later adapt the system to their own needs without having to call in an expensive consultant. However, there is a need for optimization in the interfaces of the HR software. If you want to perform really innovative HR work in your company, you have to realize that the HR system from Rexx has proven to be a bottleneck in the long term and cannot keep up with HR platform solutions.
HR SOFTWARE PROVIDER: CORNERSTONE
For more than two decades, Cornerstone has been a leader in talent development and helps companies to realize the potential of their employees in the challenges of a new working world. Cornerstone maps the entire employee journey across the organization, from recruiting to onboarding, development and certification, appraisal interviews and internal mobility and succession planning. Above all, the development of employees is the core of all innovations. A very employee-centric approach is chosen and the focus is placed on one’s own career. This is expressed in strong learning experience elements and a skills logic that spans all modules. In addition, Cornerstone enables integrations with other providers and additional solutions from third parties through a large marketplace.
The solution for employee administration that is also offered is sufficient for specific applications, but can only be used to a limited extent for most companies. A module can be implemented within a few weeks and then configured completely within the company. Here, medium-sized and large companies in particular are Cornerstone’s core customers who want to support their employees with development and can thus bring the entire company forward.
HR SOFTWARE PROVIDER: P&I LOGAHR
Oracle Fusion Cloud Human Capital Management is an all-in-one solution and cloud-native application that connects all HR processes from hiring to retirement. This enables consistent and cross-device working, a single source of HR data to improve decision-making, and supports HR with regular innovations to meet current and future needs and challenges.
Oracle Fusion Cloud HCM is characterized in particular by the idea of a complete solution for all HR processes. In addition, Oracle Cloud HCM impresses with a central, uniform data model and a uniform user interface across the entire portfolio
The service portfolio of the HCM solution includes:
- Planning, management and optimization of global employee processes from a common data source.
- Better decision-making and use of individually configurable workflows.
- Recruitment, onboarding, performance management, career development and succession planning – all in one place.
Align corporate strategy and gain control through a fully integrated solution that links time, work and vacation management with payroll, financial and human resources data.
HR Software Comparison
We will find the right HR software for you!
How Can HR Software Help to Fill Vacancies Faster?
Those who use an HR system generally benefit from more efficiency and data security than if they control their HR processes via Outlook and Excel. Every HR software is able to carry out the various tasks of HR administration as well as recruiting more time- and cost-efficiently. In this point, all HR software solutions are comparable. They differ primarily in the functions that also offer added value.
Anyone who wants to use HR software should therefore clarify in advance which requirements it must meet. For most HR departments, it is sufficient if the program manages the applications received in a structured manner. The majority of recruiting solutions therefore offer the possibility of creating status-related overviews, automating communication with applicants, involving managers and works councils in the application process and creating corresponding reporting.
The faster, the better? Due to “war for talents” it is better to have less boundaries for applying so “one-click” applications are getting trendy. Not every HR software can perform it. In addition, there are huge differences between the individual solutions when it comes to maximizing range. Some recruiting solutions have active sourcing functions, extensive selection options, video application tools, AI or the supported evaluation of profiles. A good recruiting solution should also leave a positive and modern impression on the applicants.
How Can HR Software Support Employee Retention?
HR software offers a variety of useful modules and functions for employee retention. This includes, for example, employee surveys that determine the mood of the workforce and question satisfaction with the workplace, the team and the managers. Employee surveys motivate employees and involve them in decision-making processes. Technically good and digitally optimized onboarding also demonstrably contributes to lower employee fluctuation in the first few months.
Other important topics for employee loyalty are leadership and the working atmosphere. If this leaves something to be desired, this is a reason for leaving for many employees. Even if HR software cannot directly improve leadership and corporate culture, performance management tools can have an impact. Many HR software solutions offer comprehensive options for collecting employee feedback. They provide for regular feedback meetings and pulse surveys. This creates transparency and makes it possible to react to the needs of the employees before the internal and then actual contract termination occurs.
Employee loyalty can also be promoted through further development opportunities. HR software solutions open up completely new paths for further training, such as learning experience platforms with corresponding content access and much more. Likewise, transparent and fair career prospects have the potential to bind employees. HR Software also offers corresponding functions for succession and talent pool management based on individual development plans. Some special HR software solutions are also able to uncover unequal treatment and ensure more equal opportunities.
How Can HR Software Improve People Management?
As a rule, the administrative tasks in an HR department grow. This is not only due to a possible increase in the number of employees, but above all to the increase in external regulations, compliance with which must be guaranteed. Likewise, internal agreements, which make orderly business operations possible in the first place, increase the administrative workload of the HR department. HR software is helpful in accelerating these processes and avoiding the multiple maintenance of data. Self-service and case management functions improve the workflow and can involve decision-makers directly in the process. A ticket system helps to control inquiries to the HRM in a structured way.
The standard of modern HR software now also includes employee portals, that employees can use to access their own personnel file or payroll or to be reminded of upcoming tasks. In many cases, this saves tiresome inquiries.
When selecting HR software, it should also be clear what role the solution should play in the overall IT architecture. For complex company structures with different, often autonomous and international branches or subsidiaries, there is the possibility of introducing a so-called HR core system as the leading system for the maintenance and distribution of master data. Relevant data from other systems can also be imported into it. For such an architecture, however, it is imperative that the HR software has open interfaces.
To What Extent does HR Software Finally Help to Deliver Reports Suitable for Management?
The growing importance of employees for the success of a company combined with a shortage of available specialists means that HR plays a key role in the management of organizations. The associated requirements for clear and transparent reporting pose major challenges for HR. Depending on the level of digital maturity, data must be collected manually or aggregated from different systems.
Only by digitizing the processes can data on process flows and the current status of HR work be determined in a timely manner. This can be professionalized in the long-term using an HR IT architecture with a structured data flow. In many cases, not all HR solutions can be integrated via a software provider. Tools such as payroll and time management are usually mapped digitally as individual solutions. However, it is precisely these solutions that provide important data for reporting on all aspects of wages, salaries and personnel deployment. The solution via data warehouse systems or middleware has proven to be very suitable and flexible in recent years. Data from different systems are brought together and combined with each other. In most cases, however, HR software providers also provide standard reports for download and standard dashboards for various purposes. This enables HR, Management and Controlling to receive HR-relevant information even at short notice.
Can HR Software Solve the Shortage of Skilled Workers?
HR software can be a game changer for the shortage of skilled workers in three ways. It supports efficient recruiting, binds top performers to the company and thus makes new appointments superfluous and, last but not least, it further develops the skills and abilities of the team through suitable re-skilling and upskilling measures. The right HR software not only provides cost-minimizing digital learning content, but rather creates the conditions for establishing a self-directed learning culture. This is done not only by means of ad hoc access to content, the integration of catalogues, in smart suggestion systems for suitable learning content, but also by the possibility of incorporating specific content into individual curricula using the latest methods and didactics. Not every HR software provider offers such learning experience platforms. These are more like specialists.