Selecting the right HR software is crucial in terms of realizing the full potential of digital HR. This is exactly why it is so important for companies to find the right provider. Our HR software comparison shows that the providers vary greatly in terms of both the range and depth of functions. Finding the right provider largely depends on factors such as the size of the company, the strategic objective, the degree of innovation, the future direction, the organization of HR work, etc.

The following article is intended to give you a basic overview of functions and areas that can be digitized with an HR system. At first, to compare HR software, we will inform you which types of HR software providers are available in the market and what you should pay attention to when selecting your people management software.

HR software comparison

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What is particularly important to you about the new software?

HR Software: What Is It and Why Is It Needed?

The HR software is a digital tool for HR management. The terms and definitions in the HR field are not practically uniform but rather very broad and the HR software can support numerous processes in the HR department through the digitization of those HR processes, above all, facilitation of HR administration. Both HR professionals and employees benefit from intelligent software functionalities for both strategic and operational HR activities.

A distinction can be made between tools and programs that only cover a certain part of HR management and those that claim to be general solutions and combine all the necessary functions in a single product.

For Whom Can the HR Software Be Useful?

The HR software can support even the smallest of companies. It should be noted that the software solution shall meet both the requirements of the contemporary companies and be also flexible enough to efficiently support the company’s growth or strategic development in the future.

In particular, the suitability of HR software depends on the different requirements and modules. For example, a working time recording module is just as suitable for SMEs as it is for larger companies. On the other hand, modules such as succession planning or skill management function are efficient only in companies of certain sizes.

Scope of Functions: What Can HR Software Provide for the People Management?

HR software can practically meet all the requirements in the area of HR support and administration, covering also people development and recruitment, which will be discussed later. As a rule, HR software providers develop their offers within the frames of the common HR service areas and combine the functions contained therein as modules. Since the emergence of large standardised system providers for their own extensions, there are no longer any limits, even for selective in-house developments.

The function clusters or modules and significant software features are described below. Since there are no fixed standards for the packaging of individual functions into modules, as well as their respective functional depth and the designation of the modules, the following points are generic and should be seen as “best practice”.

HR-MANAGEMENT-SOFTWARE:

Application in HR support and administration

HR software can practically meet all the requirements in the area of HR support and administration, covering also people development and recruitment, which will be discussed later. As a rule, HR software providers develop their offers within the frames of the common HR service areas and combine the functions contained therein as modules. Since the emergence of large standardised system providers for their own extensions, there are no longer any limits, even for selective in-house developments.

1. Payroll

This includes all aspects of wage and salary accounting – from the preparatory accounting and administration of vacation pay, social security notifications and company pension schemes to tax notifications and gross/net accounting. In addition, the systems offer interfaces to controlling and the statutory certification system.

2. Time Management and Team Calendar

In addition to the simple “negative” time management, which only regulates absences and ensures transparency for colleagues in the team calendar, positive time management in particular, quickly brings great complexity. The basic functions here are dealing with bonuses, breaks, flextime and waiting times as well as the simple planning of shift models.

3. Personnel Scheduling

It supports the Planning of Shift Models in industry and retail. Depending on the range of functions, the providers enable detailed planning here, based either on the employees’ required competence profiles or the number of the personnel depending on sales planning in company’s branches.

4. Personnel Portal (Intranet)

The personnel portal is the digital version of the notice board and can usually be adapted very individually to customer needs. Common functions are the display of to-do’s, company updates, in-depth information on processes, instructions, etc.

5. Application Management and Self-Services Workflow

Approval and instructions can usually be mapped via this module. The configuration of processes, e.g. requests of time-offs, or changes in the master data, etc. can be performed individually by the customer with the roles enabled and their required actions.

6. Electronic Personnel File

The elecronic personnel file includes functions for employee-specific document storage, e.g. application documents, contract data, certifications and instructions. Depending on the functional depth, providers offer audit-proof archiving with search functions, structuring options and text recognition.

HR-MANAGEMENT-SOFTWARE:

Application in people development and recruitment

As you are already well-aware of the HR support and administration, you may find the essential functions for people development and recruitment below:

1. Recruiting or Applicant Management

This module enables easy administration of the entire application process – starting from the approval of the advertisement, preparation of job postings, the management and the assessment of the received applications, to the support in the organization and implementation of job interviews and the possible drafting of contracts. In our guide, we have explained what to look out for when selecting applicant management software.

2. Onboarding

Depending on the provider, such modules not only support the new hires’ onboarding, but also internal job changes. This includes both technical pre-boarding before the first day of work (e.g. personnel master record) and professional onboarding (occupational safety, welcome message, etc.).

3. Appraisal, Feedback and Leadership

The range of functions varies greatly here. Common functions offer support for simple employee appraisals based on  objectives and competencies, for cascaded goals, for interim reviews and the achievement of bonus-relevant goals and annual appraisals. Depending on the provider, agile management methods are also supported.

4. Competence and Skill Management

Functionalities in the context of competences and skills support organizations, not only in the definition of positions, functions and the required organization-specific target skills, but also in recording the actual characteristics of the employee. It is important to define at what extent target profiles in recruiting or actual profiles in learning management can be integrated.

5. Learning and Training Management

These modules support in-company training in a broader administrative sense. It comprises further training offers, booking and approval processes, qualification matrix and further training per person, the organization of events and billing.

6. Learning Content Management System (LCMS)

The range of learning management software, which also enables the creation and integration of your own content, is growing thanks to the increased importance of digital learning formats such as e-learning, virtual classrooms, but also mixed approaches (blended learning) incorporating elements of in-class and online presence.

7. Talent Pool and Succession Management

This feature enables to manage both internal and external talent and potential job successors in pools or groups for the accelerated recruitment purposes.

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What Should Good HR Software Be Able to Do?

The need for the module types to be used for HR work and the extent of the configuration of the profound and individual functions depend on the maturity of the company and the HR objectives.

Regardless of functions, the following points should be considered with regard to an HR system.

  • Further development of the HR system: In which direction does the provider want to develop in the long term?
  • Release planning: What does the provider’s release management look like and what does that mean for me as a customer? Every release change requires internal resources for testing and possible approvals from data protection and the works council bodies.
  • Usability: Does the software suit my workforce and does the solution find the necessary acceptance here?
  • Mobile Readiness: To what extent can the system be used on via mobile, at least for executives and employees?
  • Rights and roles: Can all the required roles be mapped and can their rights be controlled on a granular basis? Not only should employees, managers and HR be considered, but also management, data protection, works council and applicants.
  • Interface concept: How easily can further systems be connected bidirectionally?
  • Data protection and data security: What security standards does the provider follow for hosting the data?
  • Reporting capability across module boundaries: Which data can be combined and evaluated in the system for reporting, and how?
  • Complexity of administration: Is the system also easy to handle for potential 2nd and 3rd level support staff?

What Else is Important for a Good HR Software?

The HR management software and its range of functions has expanded massively in recent years. In addition to new offers from HR software startups, the well-established providers have also expanded their range of functions in terms of the modules offered including their functional depth. Nevertheless, there are some very important aspects that customers should consider before making their decision.

HR-IT-Architektur

Hardly can any HR software provider offer all range of modules. Thus, you have to consider among the latest well-developed comprehensive HR software architecture before you decide on individual HR management software. In general, the providers can be flexibly integrated via interfaces. Nevertheless, the complexity of data and license management increases with each additional HR system provider.

HR Systems as SaaS Solutions

HR software solutions are almost exclusively offered as software-as-a-service models. The advantage is that you, as a customer, can rent good standard solutions with preconfigured processes and roles. Nevertheless, every company often has its own ideas/regulations as to how processes must be mapped in detail and which roles should be involved and to what extent.

It is therefore important to assess precisely whether the standard is suitable for your company or whether your process ideas can be configured within the system. The more suitable you select here, the less configuration effort there is in the implementation project. This saves costs and accelerates the HR software implementation.

Provider History and DNA

Depending on their individual history, most providers have strengths/weaknesses or gaps in their portfolio and are more likely to develop further in the environment of these modules where they are good at. In other words: HR system providers who feel more comfortable in the areas of HR support and administration are also highly qualified there or often offer modules exclusively for this area.

The same applies to the providers in the field of talent development and recruitment. It is also important to find out whether the functionality was coded by the vendor itself or supplemented by additional purchases of other vendors.

Best of Breed Solutions

There are providers for almost every function who position themselves as qualified specialists and innovation drivers with a “best of breed solution”. Such offers can be interesting if you want to have a single function operated very easily and/or innovatively. The use of such solutions is common, e.g. in recruitment or in processes that can have a very high complexity and depth of expression (e.g. in the context of time management or personnel deployment planning).

Customer Oriented Approach of the Providers

The providers usually have a history of their focus customer groups. This is usually based on customer sizes in terms of the number of employees as a variable for the license cost volume. Although the minimum license volume thresholds have been lowered for most providers in recent months, the question arises as to whether a provider from the corporate environment should really be the first choice in the SME segment and vice verse. Please consider the provider history (see point 3).

What HR Software Providers are Available? The Best HR Software in Comparison

The sheer number of HR software providers does not allow for a complete listing. However, the following is an overview of common HR software providers in Europe and their services.

SME Suite

  • Range of functions: Providers in this segment usually focus on simplifying classic HR support and administration. This area includes the processes such as the employee portal, workflow management and forms with self-services. The providers also provide a digital personnel file for this purpose. Furthermore, the solutions are characterized by a powerful module for recruitment. In some cases they have simple basic functions around the topics of onboarding as well as appraisal, feedback and leadership meetings. Very occasionally, topics such as learning and training management are also supported. It should be noted that only very few providers in this segment offer a powerful payroll accounting and/or complex time management/workforce scheduling solution.
  • Typical providers in the segment: Rexx Systems, Perbit, Jacando, Heaven HR. Providers such as P&I or Sage also offer powerful modules and services for payroll accounting.
  • Target customer segment: Small and medium-sized companies up to approx. 2000 employees

Enterprise Suites

  • Scope of functions: Providers in the segment provide an extensive and usually complete portfolio on the major topics of HR support and administration as well as people development and recruiting. It should be noted, that the existing module portfolio was partly expanded and realized through acquisitions from other software providers. In practice, this leads to limited usability and problems with cross-module reporting.
  • Typical providers: SAP Successfactors, Workday, Oracle, Ultimate, Ceridian
  • Target customer segment: Large customers and larger medium-sized companies with around or over 2000 employees.

Talent Suites

  • Scope of functions: Providers in this segment specialize in the areas of talent development and recruiting. The portfolio includes highly configurable solutions for recruiting, onboarding, appraisal, feedback and leadership interviews, skills and competence management, talent pool and succession management, learning and event management, particularly content management.
  • Typical providers: Haufe, Cornerstone on Demand, Talentsoft
  • Target customer segment: medium-sized companies from approx. 500 employees, large customers

Best of Breed Solutions

  • Range of functions: Providers in this segment specialize in a module based on the description in the “Area of application” field. As a rule, these solutions can technically be easily combined with providers in other segments. These providers are characterized by a high rate of innovation in the respective subject area and usually offer comprehensive options for configuring even unusual customer requirements.
  • Typical providers: Haufe myOnboarding (onboarding and job change), SmartRecuiters, Softgarden (recruiting), PeopleDoc (digital personnel file and workflow management)
  • Target customer size: no specific target customer size

How Is the HR System Implemented?

Technical, professional and cultural issues shall be covered while implementing SaaS Solution.

  1. Technical integration means the integration into the existing IT infrastructure in order to create a smooth and barrier-free flow of data and users.
  2. The technical implementation covers all actual requirements for the software and the corresponding processes.
  3. As part of the cultural implementation, user acceptance and change in the company are ensured.

1. Technical Integration

The technical integration is comparatively easy, since all common and modern SaaS providers allow communication via APIs, both incoming and outgoing data streams. On the one hand, it is required to clarify data sovereignty (which system is responsible for which data and when, so that changes in employee information are updated and displayed in all systems without having to change them several times – e.g. name changes) and on the other hand how access is granted to the HR software and how the authorization concept is followed.

2. Professional Integration

Since the providers are careful to map the widest possible range of processes, there is often no standard process in SaaS solutions. This means that you have the option of mapping your processes within the framework of the functionalities offered.

 

Before starting the implementation, it is important to define the scope and expectations as well as concrete goals:

  • When can the implementation succeed?
  • What do we want to achieve?

The experience shows that once the goals and processes have been clearly defined, it is advisable to apply using the software as soon as possible and map processes into it. This can prevent unrealistic or false expectations from being built up. At the same time, you can use the advantages that the new software may offer. An iterative process, which gradually maps the settings and processes, enabling to use processes within a few weeks.

3. Cultural Integration

In addition to the technical and functional implementation, special attention should be paid to the change process that a software implementation entails. On the one hand, you must provide a room for change by preparing the company and the user groups for it.

In addition, it is also important to make it as easy as possible to get started:

  • This can be done through special offers such as short instructional videos for use, training or information events.
  • Alternatively, only a few selected functionalities of the new HR software can be activated initially to get to know them.
  • At the same time, it helps employees to quickly accept the new solution if there is no loss of information or functionality.
  • In other words, historical data is taken over and displayed in a new way in the new software. The success of an HR software implementation is closely linked to user acceptance.
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HR Software Implementation: the Procedure

These three integration areas are of central importance for the implementation of an HR software. Since the actual implementation process is an extremely extensive one, the description of which would go beyond the scope of this article, you will get to know the most important cornerstones of the HR software implementation in a brief overview below.

  1. suite” vs. “best-of-breed solutions”: Before selecting a new software, you should ask yourself the question of the general HR IT architecture. How many software providers can and do you want to manage in terms of license and release management?
  2. Make yourself a clear strategic HR target vision. Which HR services are a must and which services are nice to have. Which HR skills can you use to decisively support your company’s business model? On this basis, it is possible for you to decide to what extent you can introduce standard software and where you really have well-founded individual requirements that need to be configurable.
  3. Wherever possible, you should adapt your processes to the software standard and not the software to your processes. There is a wide range of providers with different, also qualitatively good standards. Every process that can be adopted as standard saves valuable resources and simplifies later operation of the software.
  4. Partnership, intuition and open communication about mutual expectations and goals are particularly important aspects when it comes to implementing HR software. As little as it sounds “business-oriented” at first glance, a partnership-based approach already proves to be important and valuable in the purchasing process. This should also be considered while comparing HR software.
  5. None of the partners (neither customer nor software provider) wins with an unsatisfactory project or software that is not successfully used later. SaaS business models are not one-time transactions with a one-time deal, but are based on the assumption of a long-term partnership between the software provider and the customer.

HR Software for Successful HR Management

The wide range of HR software on the market and the combination options of the providers are both a blessing and a curse. An HR software comparison is essential to guarantee a good fit for the company in advance.

  • Blessing, because basically all common HR requirements can be implemented without in-house developments.
  • Curse due to the large number of possible decision parameters that have to be taken into account.

It is not easy to judge what the right HR IT architecture for your company looks like. As part of a long-term HR strategy, the various providers must be assessed and the right provider selected (possibly in combination with other providers). During the evaluation, one should also be convinced of the basic strategy of the software provider(s).

Software Selection

In concrete terms, this means: What is the background of the company? What is the future direction? Which partnerships or cooperations does the company enter into? All of this can help to identify the right HR software for your own company in addition to the “hard” facts in the decision-making process. Providers or strategies (island solution vs. suite) should not be excluded in advance.

The aim of such a change should be to create an environment that is as stable and future-oriented as possible, which allows internal growth in terms of process optimization and further development and also fulfills the set goals.

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