The Best HR Software in 2021 - Expert Rated

Pricing for the majority of HRIS software is done on a per employee per month basis.  The price depends on the breadth of the feature set you’re getting, as well as the size of your organization.  Below are some price ranges to keep in mind as you look at various vendors for your HR management.

It’s worth noting that the price ranges per employee per month vary a lot for different solutions.  You can find a HRMS that will charge you $2/employee/mo, and solutions that run as high as $30/employee/mo (plus additional fees for payroll and benefits, as well as extra modules for hiring and onboarding).  As many things in life, you get what you pay for in most cases.  If you just need to check the box, then obviously going with a cheaper solution makes sense.  If you want to use your HRIS to be a tool for increasing employee engagement, retaining employees, and generally driving business value through human capital management - then you’ll have to pay up for one of the better solutions.

Some vendors will also charge ancillary fees in addition to the recurring SaaS cost.  Be aware of the various pitfalls here, and realize that for the most part you can negotiate many of these fees much more easily than the recurring per employee per month cost of the cloud-based solution you’re buying:

• Setup fees
• Consulting fees
• Support fees
• Software fees
  

When you’re looking for a top HRIS system, it’s important to think about what your goals are for this software, and then codify these into an organizer spreadsheet you can use to make notes throughout your vetting process.  In addition to the demo questions we have below, it’s worth thinking through some of the key features for your new system.  Here are a few that you’ll want to have in mind as you start demo’ing some of the vendors in this space:

• Employee Self-service portal: Keeping employee information up to date can be a lot of work for your HR department. The self-service function of many human resource management tools help eliminate this challenge by empowering employees to view and edit their own profile, benefits, time off and more.  It’s worth taking the product for a spin as an employee to make sure they can easily access benefits, PTO, etc.
• Time and Attendance Management: An HRIS simplifies the process of tracking time-off as well as planned and unplanned absences due to sickness, injury, maternity leave, or unauthorized leave.
• Onboarding Capability: While onboarding typically involves a lot of paperwork, with an HRIS, employees can complete much of the onboarding process electronically including open enrollment. Some HRIS’s even have electronic signature functionality which allows employees to sign scanned documents that can be stored right in the system.
• Custom Reporting: As HR becomes increasingly reliant on data and trends, it’s important to have a system that can create analytics reports to help improve business decisions. A powerful reporting system takes the manual labor out of preparing reports and can help you gain valuable insights about your business.
• Learning Management: A learning management system may be part of your HR software suite. However, it's much more likely that this is a standalone solution that simply integrates with your HR system so that employees can get the right educational materials during employee onboarding, and throughout the employee lifecycle.
• Employee Database: The employee database of an HRIS allows you to store all employee records and information in a centralized location. The data is searchable, making it easy to find details on employee salary and position, performance appraisal histories, disciplinary histories, training records, and more.
• Recruiting functions: Many HR solutions allow you to post new roles to job boards, manage interviews, store resumes, and transfer information when a new candidate is hired. While not all HRIS’s have their own recruiting and applicant tracking functions, they should at least be able to integrate with your current applicant tracking system (ATS) so that you can transfer new-hire information to your system quickly and smoothly.
• Training and Development Management: Tracking employee training is important, particularly if you are in an industry where employees require certain certifications or licensing. An HRMS allows you to see what training employees may need or want and helps you stay up to date on any required recertifications.
• Central Storage for Company Documents : Serving as a centralized location for any information your employees might need, your HRIS should be a place where employees can find employee handbooks, emergency evacuation procedures, and safety guidelines.
• Benefits Administration: Your HRIS should enable employees to enroll in health insurance, manage their 401k, and track their benefits information. Many HRIS offerings also have payroll solutions so that when an employee updates their benefits information, that information is automatically updated in the payroll system and you can ensure that paychecks are correct. However, many times payroll is an additional charge that your hr department needs to be aware of.
• Compensation management: To reduce the risk of error when handling employee compensation, HRIS’s often offer payroll and compensation management functions. This allows you to handle many forms of compensation including salaries, paid time off, overtime pay, and bonus programs automatically.  This will streamline a lot of your HR processes.

When you start demo’ing various HR management software, it’s important to prepare questions that get at the cored needs your organization has from a functionality standpoint, as well as the various items internal stakeholders will care about (security, data migration, self-service portals, etc).  Here are questions we think HR and People teams should have in their back pocket to make sure they have covered all their bases.

• How will information be exchanged with carriers (for benefits)?
• How can we important data into this system? (API, Excel spreadsheets, documents, other databases, and paper documents)
• Does it accommodate benefits carriers’ rules?
• Does it integrate with ATS/payroll system/any other systems you might have that impact workforce management?
• What built in security measures does it contain?
• Does this solution have SSO capabilities?
• Are there multiple authorization levels for different types of users?
• Is there a maximum number of employees it will support across the workforce?
• What types of reporting capabilities does it have?
• Does it include features to help HR communicate with employees (i.e. mass emails, filtering messages by criteria)?
• How much technical training will be required?
• What kinds of technical support are provided?
• What recruiting capabilities are built in?
• What hr processes will be automated?

While very small companies may be able to handle all of their employee information just in spreadsheets, an HRIS can benefit any company and becomes increasingly important as your business grows. If you’re still not sure if an HRIS is right for your business, here are some key signs that you should definitely be thinking about implementing one:

• You have over 25 employees: While 25 employees is not a rigid threshold, it is a good place to start thinking about using an HRIS for your core HR management. With much more than 25 employees, keeping track of employee data becomes a chore, and at a certain point, it becomes impractical to enter and update all employee data manually.
• Many of your jobs require licensing or certification: If you are in an industry where employees legally require up-to-date certifications, it’s important to stay on top of when employees need to be re-certified. An HRIS can play an important role in reminding you when employee certifications will expire to ensure that all of your employees’ are compliant and your business continues operating smoothly.  This is one HR process it makes sense to automate.
• You’re growing fast: As companies grow and pass different size thresholds, they face changing legal requirements. Keeping up with the legal requirements of a growing company is much easier to do automatically with an HRIS rather than by hand in spreadsheets.
• You want your HR team to play a more strategic role: Having one easily searchable system that stores employee information, runs payroll, and handles benefits saves a lot of time for your HR team. This allows them to focus on more strategic projects for your business such as increasing employee retention or improving company culture.  
• You manage hourly employees: With hourly employees, you often have to track hours and manage changing schedules. Keeping track of all this information becomes much easier with a best in class HR tool.
• You need custom data reports: As businesses become increasingly data driven, data-based reporting about the life of your company becomes more and more important. Many HRIS solutions have features that easily create custom reports for you so you can get a better idea of the health of your company.

What is HR software?

HR software is any tool or solution that aims to improve the functionality of a company’s HR team. 

What does HRIS stand for?

HRIS stands for Human Resource Information System. 

What does HCM stand for?

HCM stands for Human Capital Management.

What does HRMS stand for?

HRMS stands for Human Resource Management System. 

What’s the difference between HRIS, HCM, and HRMS?

On a surface level, there isn’t a huge difference between HRIS, HCM, and HRMS. They are all people management systems for companies. However, there can be some subtle differences. An HRIS is an all-encompassing in-house software for managing people, procedures and policies. An HCM has all the features of an HRIS, but often includes talent management capabilities. An HRMS has all of the features of an HRIS and HCM, but often includes payroll and time and labor management capabilities. 

Why use HR software?

Reasons to use HR software include:

• Saving time with automation
• Improving employee experience
• Improving employee performance
• Increased compliance
• Better organization
• Streamlined hiring
• Better business intelligence
• Workforce management
  

What are some key features of HR software?

There are many key features of HR software, such as:

• Employee self-service portal
• Time and attendance management
• Onboarding capability
• Custom reporting
• Benefits administration
• Employee database
• Recruiting functionality
• Training and development management
• Company document storage
• Compensation management

What is the best HR software?

The best human resource information systems are:

• Sapling: Remote-first HRIS
• Freshteam: People software from Freshworks
• Bob: Culture-focused HRIS
• ClearCompany: Multi-use case vendor
• Namely: Great for payroll & benefits
• BambooHR: Top vendor with flexible pricing
• UKG: Full HCM suite
• Rippling: Employee management platform
• ADP: Classic vendor with PEO offering
• Zenefits: HR essentials with great UX
• Factorial HR: Strong HR solution for SMBs
• Sage People: HR suite for global teams