HR Tools – An Overview

Resource tools have replaced the human face as end-to-end integrated systems that manage all core HR processes are something no modern organization can do without

Human Resources Management involves dealing with humans, right?

Well, yes … but that’s not all. In the modern organization, HR management will invariably involve manipulating a plethora of tools. Of course, the sole objective of all these HR tools is better management of the people who make up the organization. Most HR processes are compliance-driven and repetitive – hence performing them manually is time-consuming and grueling. Tools help the HR department to better manage their routine activities by leveraging the power of automation – thus saving time and money, as well as managing people more efficiently and objectively.

Why tools?

Generally, HR tools are conceived as end-to-end systems to cover all core HR processes– right from recruitment through retention, evaluation, and exit. The entire suite is called a Human Resources Management System (HRMS) – also referred to variously as Human Resources Information System (HRIS), Human Capital Management System (HCMS), Talent Management Software, or HR Administration Software. They merge human resources as a discipline, together with all activities and processes, with the information technology field. Manageability and ease of access are the two prime qualities of any such system. Of course, things are cent-percent customizable. Based on the requirement, companies can either opt for a simple software package that addresses routine administrative tasks, or they can opt for complex systems that handles all strategic HR areas.

The HRMS software category is analogous to enterprise resource planning (ERP) software in terms of how data processing and standardized routines. In a nutshell, ERP systems originate from software that integrates information from different applications into one universal database. To make the employee experience complete and one-stop, financial and human resource modules are often linked through one combined – thus differentiating them from generic ERP solutions.

Expectations from HR tools

Common features that organizations look for in HR software packages can be summed up as follows:

• Ease of use
• Swift implementation
• Multi-channel access
• At-a-glance dashboards
• Generation of ready-to-use reports
• Seamless integration with third-party applications wherever needed
• Intuitive and low-maintenance employee self-service portal
• Maximum customisability to meet diverse and unique needs
• Scalability to accommodate business growth

Ever since early HR solutions were introduced in the late 1980s, the essential approach has not changed much. There has been little movement in traditional segments of the HRM software market. HR and payroll software, time and attendance, and benefits management are the staple HRMS products, along with storing employee information. Market growth and consolidation are driven by emerging computing technologies that make these systems lighter, as well as new trends in HR management strategies like performance and talent management. Overall the major shift has been from in-house proprietary systems to the SaaS (Software-as-a-Service) approach – and from on-premises to Cloud-based implementation. 

HRMS categories

The major categories of HR software that drives the SaaS model are:

• Recruiting Software
• Applicant Tracking Software (ATS)
• Employee Onboarding/Exit Software
• Payroll Software
• Time Clock/Attendance/Leave Management Software
• Scheduling/Rota management software
• Learning Management Software (LMS)
• Employee Engagement Software
• Performance Management Software

The following table presents the most popular HR software under the major categories that are currently trending worldwide:

Emerging trends

The HR software market is constantly growing and is forecasted to reach $33.58 billion by 2026. Even small and medium businesses are now acutely aware of its benefits. The landscape is rapidly changing with the addition of new applications and tools to keep pace with changing technology, user experience, and strategic shifts in the HR landscape.

The following are a few emerging trends that would affect the shaping of future HR tools:

Analytics gaining ground: As HRMS packages become more inclusive and the payroll software market grows and changes, there are a few additional considerations to make when choosing a solution. Features such as HR analytics, social integration, and mobile capabilities are becoming standard issues for most HR tools rather than innovative selling points.

AI/ML changing the game: The growth of Artificial intelligence (AI) and Machine Learning (ML) in the software space is undeniable, with nearly 50 percent of businesses adopting AI in at least one aspect of their business. AI developers are now focussing on automated recruiting and onboarding tools, and intelligent 365-degree feedback surveys. Machine Learning is being harnessed to Learning Management Systems to better understand what types of courses employees should take next. These tools can also be used to offer learners new resources based on established learning patterns and behavior. AI/ML recruiting tools are also expected to reduce biases in the hiring process.

Team over talent: While talent management and development was the core idea of all HR systems, the new thinking process gives precedence to teams over individual talent. HenceTeam Management, or Workforce Management, is gaining a new focus in HR systems. Organizations are looking for tools that can manage teams that share similar business outcome goals – rather than single-employee approach. Workforce Management is expected to influence recruitment, communication, and performance appraisals.

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