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Why HR software is essential for small businesses

Rayaan Shire 22 Sep 12:37 min read
OfficeSimplify HR software

Businesses utilise human resources software to combine a variety of essential HR operations. Helping companies to manage better and engage their staff, raise productivity, and ultimately increase profits.

A survey that was conducted 2017-2018 on HR systems stated that 38% of companies intend to increase their HR technology spending. There is no shortage of applications to choose from, as the HR software market is estimated to reach $10 billion by 2022.

You must understand the basics of human resource software before investing in one. We will break it down to you so that you learn everything you need to know.

What is HR software?

Human resources management software, also known as a human resource information system, is a type of data and reporting system that aids in the automation and management of human resource procedures in a company.

HR software assists managers and staff work more efficiently while eliminating errors, guaranteeing compliance, and enhancing production. Enterprises of all sizes use it.

Since the 1970s, computers used to manage human capital data, HR software technology has come long. In the 1980s, HR systems were more readily available to business clients, and the introduction of web-based software in the 1990s made HR software even more popular. Most modern systems are now cloud-based, subscription-based, readily connected with other data management tools, and highly configurable to each firm’s objectives, goals, and budget. In other words, there is now HR software for every size and style of business.

What does HR software do?

To keep it simple - HR software assists an organisation to do things electronically, eliminating the need for paper documents. Time tracking, directory updates, and performance management are all things that Human resources software can do for your business.

Functions of HR software:

  • Employee data is securely stored and organised.
  • Making workflows and keeping track of approvals
  • Time tracking via self-service
  • Employee satisfaction is measured and reported.
  • Goal-setting and performance management
  • Benefits administration and management
  • Pre-boarding, onboarding, and offboarding automation
  • Third-party application integrations
  • Monitoring all data changes with an audit trail
  • Producing custom reports to provide strategic insight
  • And much more

Why do small businesses need it?

The way we work is changing, and so is the way businesses manage their workforces. Companies must invest in new technologies to improve the employee experience and increase the bottom line to satisfy the needs of a modern workplace and recruit the most okay grade people.

By having a human resource system in place, you are saving valuable time and reducing the amount of paper you use.

Organisations can modify management and employees' roles to be more purposeful and engaging by decreasing paperwork and streamlining processes. Employees can focus on higher-level duties thanks to HR software, which leads to better planning, more strategic decision-making, and higher job satisfaction.

What are the benefits of HR software?

HR software helps you save time by automating routine tasks like holiday pay, absence tracking, and training. It can also aid in the streamlining of operations to improve overall productivity and job management.

The following are some of the benefits:

Secured data

Human resources departments are in charge of a vast amount of compassionate employee information. As a result, it's vital to put data protection measures in place. HR management software enhances security by allowing businesses to securely communicate documents while also controlling who has access to them. HR managers may be confident that data is secure because of an audited trace of all actions on each record.

Reduced administrative tasks

Your HR team can spend less time on administrative activities and more time on high-priority projects and company initiatives when efficiently automated processes. HR professionals can focus on what they do best: recruiting top personnel, implementing training programmes, and improving business culture, thanks to reduced paperwork and more straightforward procedures.

Improved compliance

Compliance can be complex for even the most well-organized and watchful HR department. Maintaining flawless paperwork is practically hard with ever-changing state and federal standards. HR software solutions allow organisations to store, exchange quickly, and manage vital employee information, from I-9 forms to healthcare documents. Built-in tools keep track of papers and certifications that are about to expire, ensuring you're always audit-ready and ahead of compliance obligations.

How to choose HR software for your organisation?

When it comes to choosing the ideal HR software for your organisation, it comes down to your company’s needs and future goals. Consider the following questions to establish a good partnership:

  • What are your goals?
  • What tasks do you want to support?
  • How will the partnership work?

Companies can assist ensure that they remain adaptable and profitable in a competitive, dynamic industry by choosing the correct HR software solutions.

What are the types of HR software?

HR software that manages applicant tracking and onboarding, performance, and employee engagement are some examples of HR software that can help your company achieve its objectives. Here are some of the most common types of HR software:

Human resource information system (HRIS)

A Human Resources Information System (HRIS) is a software application that helps an HR department with data entry, tracking, and management. The following are some of the most common characteristics of HRIS software: Time and attendance tracking, an employee profile database, payroll functionality, learning and development, an employee self-service portal and benefit portals.

Application tracking system (ATS)

An applicant tracking system (ATS) is software that aids in the organisation’s employment process from start to finish. It’s to publish job vacancies to several job boards, store applicant data, and screen applications for prospective matches.

Employee document management software

An employee document management system automates all aspects of employee files while also providing essential security and compliance features lacking in most HRISs and HCMs. This programme streamlines time-consuming paper operations by allowing HR managers to classify, file quickly, and route records.

The system stores all documents in the cloud, making it an easy task to access files from anywhere and anytime. An employee document management system is crucial to preserving centralised, audit-ready data as telecommuting becomes more widespread and organisations must maintain compliance across different states or countries.


Onboarding software automates and tracks the process of onboarding new employees into a company. Electronic signatures, pre-boarding packages, training monitoring, employee questionnaires, and other automated methods to help HR guarantee that new employees have a compliant and smooth onboarding experience.

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