HR software covers a range of programs and products that essentially store and process data and streamline tasks for your HR department. Core functions include an employee directory and payroll, but other tools on the market include onboarding and training, recruitment, time tracking, and internal communications. 

Some providers serve multiple functions within the same product, sometimes referred to as all-in-one HR software, but you can also purchase specialized solutions separately.

HR Software Benefits

Many companies use HR software to increase productivity and efficiency and reduce the risk of error. It can also improve decision making and the ways in which employees engage with peers and the company.

Keep reading for the top benefits of HR software.

Higher productivity

HR software can manage a wide range of tasks, from paying wages to providing training, meaning you can spend less time on laborious work such as copying data across siloed processes. 

Imagine, for example, the time-consuming labor involved in manually preparing end-of-month payroll, including calculating net pay and making bank transfers. With HR software, however, you input employee details once and the payroll process is automated, potentially saving several days for your team to focus on more important tasks. 

Centralized data

The data stored and tracked in HR software can be used as the single source of truth in the business. If kept up to date—for example, by ensuring employees regularly update their personal information—it minimizes errors and can enable automatic processes like payroll and performance evaluation. 

Furthermore, having all your staff data in one place—from salary to training status and shift information—means you’re better prepared to serve both employees and line managers if issues arise. 

Improved employee engagement

HR software doesn’t only make things easier for the HR team—it increases employee engagement, too. For instance, staff benefit from automated payments on the same day every month, reducing uncertainty and establishing trust. Allowing staff to complete their digital onboarding in their own time and track their working hours via a digital app also increases flexibility and ownership. Employees become more satisfied and, thus, more engaged with the company.

Furthermore, HR software collaboration features help employees engage with one another. For example, messaging their team on an internal communications app helps coworkers build relationships.

Better decision-making

The data tracked and analyzed by HR software helps you see the bigger picture, whether that’s the skill composition of your workforce, the budget required for next year’s payroll, or the main topics in the social networking feed. Instead of relying on out-of-date spreadsheets and lengthy interviews, you can quickly access reliable data to make more informed decisions about your workforce.

HR Software Features

Generally, HR software draws on a database of employee details to support HR processes like recruitment and onboarding. There’s a wide variety of features available, so determine which ones are a priority for your business to help you choose a software solution.

Here are the top HR features to be aware of.

Employee directory

An essential feature of any HR software is storing employee data. Reliable, up-to-date information that’s easy to access and use effectively supports critical HR functions, including payroll, performance evaluation, and budgeting. You should be able to save and search for basic details, including name and job title, and create custom data fields, such as number of weekly shifts.

Specialized functions

Depending on your business needs, there are specialized functions you may want in your HR software. Platforms that support recruitment are a common example, as they can post to online job boards, track applicants’ progress, and enable collaboration with hiring managers.

If employing shift workers, time-tracking features make it easy to accurately record hours worked and feed results into a payroll calculation. You may also require onboarding and training functionality to standardize the messaging and training received by new starters when they join.

Automated workflows

Your HR software should have the ability to automate tasks that would otherwise be manual, such as sending emails, inputting data, and generating documentation. For example, a payroll solution can pay employees on a given day of the month automatically, without a single click. Similarly, recruitment software can automate emails to candidates based on predefined templates, inviting them to the next stage or declining their application.

Custom reports

Creating custom reports is a standard feature across HR software products, allowing you to filter and analyze the data that matters most to your business. For instance, you may want to filter your employee directory by a specific job title in a certain salary range, or analyze changes in your payroll over the past six months. On an applicant list, you may only want to review those with 10+ years of experience. The data in custom reports helps you make quicker, more informed decisions.


Integrations are a crucial element of HR software, as employee data adds considerable value to other business areas. For starters, if you’re using several HR software solutions, they should be integrated to minimize manual tasks, such as copy-pasting.

In addition, you could integrate your payroll solution with accounting software, and internal communication apps with project management tools like schedulers and task managers. 

Types of HR Software 

Some technology providers focus on a specific HR function while others offer a cross-function solution, including an employee directory, time tracking, and internal communications, for example. Solutions covering several HR functions are referred to as all-in-one HR software.

If you’re looking for specialized solutions, however, here are some of the most important ones on the market.

Applicant Tracking System (ATS)

An Applicant Tracking System (ATS) helps you manage the recruitment and hiring process from one centralized platform. You use it to post jobs on third-party channels, store and categorize applications including CVs and personal details, and track interviews, performance, and job offers. Some solutions may allow communication with applicants directly from the platform through calls and emails, and facilitate collaboration with hiring managers across the business.

Employee Directory Software

You can use employee directory software to store and update employee information, such as name, job title, department, email address, and skill sets. Often, staff update their own details, increasing data reliability and saving HR time. Team members can search the directory using names, job titles, and other keywords, with some solutions enabling calls and instant messages. Certain employee information, like pay grade and career goals, can be set to display to managers only.  

Payroll Software

Payroll software stores and tracks financial data on all employees, including their wages for every pay period. It automatically deducts tax from gross pay, pays employees their wages or salaries at scheduled times, and lets staff self-manage personal details, such as home address. 

Payroll solutions also send out documents such as pay slips and the W-2 form automatically, saving HR teams significant admin time. In addition, reports can be generated on payroll for different departments and geographies, aiding budgeting and financial reporting.

Onboarding and Training Software

While you could purchase onboarding and training solutions separately, it may be more cost-effective to find a tool that covers both. This software streamlines processes for new starters, including signing employment contracts, and provides digital training modules for employees to complete, like health and safety or skills-related training. The admin console lets you personalize the onboarding and training journeys for each employee and tracks progress and next steps.

Time Tracking Software

Time tracking software allows employees to clock in and out, tracking the total number of hours worked during a pay period. Often, it is part of or integrated with payroll software, so you don’t have to input hours worked into a pay calculation. Employees use this software to submit timesheets for specific projects, including overtime and specially-priced hours such as night and weekend shifts.

Internal Communications Software

Internal communications platforms provide tools for communicating various types of information across your organization. This includes instant messaging and calls, as well as social networking feeds, posts and comments, company announcements, document sharing, and more. Some solutions also feature scheduling and task assignment capabilities, time tracking, and training materials.

Human Resources Information System (HRIS)

A Human Resources Information System (HRIS) typically combines several functions at once: an employee directory, benefits administration, applicant tracking, time tracking, and more. An HRIS provides the core information that goes into recruitment, payroll, and performance reviews. It may include automation features, such as sending candidate notifications to hiring managers.


HR software can cover a variety of functions, from basic employee directory and payroll capabilities to onboarding, training, recruitment, and more. Automating workflows and creating custom reports is a core feature of most HR software. You can opt for an all-in-one program covering most functions or several specialized solutions. 

Using one or more solutions can streamline HR processes and significantly reduce manual tasks like sending emails. Employees’ experience is also improved, as they can update their own details and collaborate with colleagues more easily. 

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