Five steps to choosing the right HR Software
Anyone who has made the shift
will tell you that the benefits of automating human
resources functions are significant. Good
can eliminate hours of
time spent tracking performance reviews, vacation accruals,
benefits, compensation, applications and other items.
In addition, automated reporting cuts staff hours even
further. It provides management with the timely, accurate
reports it needs to operate efficiently, and makes HR a
vital, visible part of the organization. But remember, any
software program simply automates and accelerates your
current processes—it cannot fix problems within the HR
Finding the right software package and
the right company to help you through the conversion process
is a critical step toward easing into automation. Laying out
a systematic game plan that leads you through the process is
a good idea. The ideal plan would contain the following
• Determine the needs, requirements, and
desires of your company—including budget parameters.
• Research the available software packages within your price
range and request demo software on each package.
• Test the software against your company’s requirements.
• Ask questions about the package, support, implementation and
• Make a decision.
With the plan formulated, it’s fairly easy to walk through each step. The
guiding principle as you go should be "Ask plenty of
Determine what your company needs
The rule here is "know your company." Because you are
looking for a solution to specific issues, you need to
clarify those issues at the start. The more you understand
about the company’s current needs, growth rate and strategic
plan, the better able you will be to match a software
program to those needs.
The first thing to consider
is company size and growth rate. That may include
considering such future need as COBRA and affirmative action
tracking that your company may not be doing currently. In
addition, some industries have high turnover rates that make
easy data entry and reporting capabilities key.
Most importantly, find out what other software your company is
using for payroll and other internal functions to ensure
anything you purchase will interface easily with existing
programs. Also, know your company’s database and multi-user
By talking with others in the human
resource department and company management, you can put
together a comprehensive list of needs in order of priority.
The category of "nonnegotiables" may include budget
concerns, compatibility with existing software, and certain
critical functions. When you begin your search, you should
immediately disregard those programs that do not meet those
Make certain that you are realistic
about your needs and budget. There are HR software programs
that can run your budget into the six-figure range.
Certainly, in that range you can expect greater
functionality and customization. But before you spend that
kind of money, make sure that’s what you really need.
Research the kinds of software that are available
The second step is to find out what’s available. Laila
Allen, an HR professional who has helped companies automate
their human resource function, prefers using a three-pronged
"I start by looking at recent HR
publications to determine what issues are being discussed
and who is advertising products that seem to meet my needs.
I also ask other colleagues the plusses and minuses of the
programs they use. Last, I search the Internet for other
product offerings. When I have compiled a list of potential
products, I begin contacting all the prospective companies
to request software demos."
This is a time when you
should weed out any products that do not meet your
nonnegotiable requirements for price, function or
Take the software on a test drive
Testing the various products is probably the most important
part of the process. Generally, you should test for six
things: actual ability to integrate with current software,
ease of learning, simplicity of data entry, function
performance, flexibility and reporting capabilities. If you
have a critical need, such as providing on-the-fly custom
reports to management, be sure to test that section of the
software most thoroughly. In addition, you should spend some
time trying to create custom reports and personalize the
system to make sure it will conform easily to your
Another area to look at is
flexibility. If your company is growing, it’s critical to
assess how easily and how far a program can expand. The last
thing you want to do is complete the conversion process and
have to start over again in a couple of years to shift to a
larger, more powerful program.
Finally, it’s very
smart to test the software company’s support to see how well
the products are supported. Sometimes it takes a little
finesse to get past the salesperson and into the help desk.
According to Allen, "Sometimes I was able to call them
directly; other times I had to go through the salesperson.
In those cases, I always looked for technical questions that
the salesperson would gladly refer to technical support.
Talking to the help desk is very valuable, since that’s the
group you’ll be dealing with after the sale."
find that most programs won’t make it past the questions of
price, function or compatibility with current software.
Others will be thrown out if you receive bad reports from
other users. These filters will allow you to narrow the
search down to just a few options. As you test each product,
make a checklist of the key plus and minus points for each
program. Always shoot for the best price-to-performance
ratio, which will vary depending on your company’s needs.
Some basic grading areas include price, ability to
integrate with current software, user interface, any
unusually good features, any strong negatives, technical
support quality, modules and upgrades available, year 2000
compliance and length of time expected to implement the
findings by talking with each of the references supplied by
the companies and with your own network of HR professionals.
When possible, ask the references if you can speak with the
person responsible for actually implementing the program.
That will quickly reveal a depth of information about the
program that you might otherwise find out the hard way. This
process may also give you some good ideas of preparatory
steps to take and pitfalls to avoid.
When you ask
questions of the software salesperson, look for areas of
potential concern they might reveal. For example, Allen
found that when she asked about future enhancements to the
program, salespeople often told her what was missing from
the current package.
You should also ask questions of
the technical support or help desk staff if the opportunity
presents itself. Questions such as "What is the most common
problem people run into during implementation?" or "What
functions of the program do people most often ask you
about?" can uncover potential concerns.
another area that may require some probing. Because every
company that purchases HR software is different, each
program meets a different range of needs. Software companies
typically meet these varying needs by creating software
modules that can be mixed and matched to approximate a
In addition, technical support is
sometimes included with the package and sometimes offered at
an extra charge after a certain amount of time. Because of
those variables, it sometimes takes a little detective work
to get a true understanding of the programs’ initial and
recurring costs. Though often presented as a tedious and
difficult process, implementation is frequently simple.
Remember, you are simply automating something that already
exists, not recreating the department.
there’s the question of implementation. Some companies
provide onsite support throughout implementation and
training, while others offer training classes, and still
others provide little more than a phone number to call. Of
course, the more attention that is available, the easier it
will be to make the transition. On the other hand, each
level of implementation support will likely reflect on the
real price of implementation.
Though often presented
as a tedious and difficult process, implementation is
frequently very simple. Remember, you are simply automating
something that already exists, not recreating the
department. As a rule, the better organized a department is,
the easier and faster it is to automate.
Make a decision
After going through each of the above
steps, the decision may actually be the easiest step.
Because each preceding step narrows the field, it often
comes down to no more than one or two software packages that
provide what you need.
Take the short way home
While this five-step process may seem time-consuming, you
may find that it will save you time during the conversion
process for several reasons:
• None of the five steps is very time-consuming.
• By working with the demo
software packages, you can make great strides in learning
about the program you ultimately select, as well as gain a
general knowledge of HR software.
• You will establish a
relationship with the company you later choose, including
establishing a rapport with the technical support staff.
• As you speak with references and other HR professionals,
you will learn a great deal about how to smooth the
implementation process and will be able to use their tips to
cut time out of your process.
• You will know what
implementation help you can expect from the software company
and make those arrangements early.
"My initial worry
about the implementation process was short lived," said
Allen. "Thankfully, all the research and testing added up to
a relatively fast and easy conversion." It’s interesting to
note that a little over two years later, Allen moved to
another company that was experiencing exceptional growth and
needed to automate. After all she had learned in the
software-buying process the first time around, it would have
been easy to simply choose the same software program she had
selected before and convert quickly.
But two years is
an eternity in the high-tech world, so she decided to go
through the process once more to make sure her earlier
choice was still the best. In the end, she did once again
choose the same software, but she felt the exercise was
valid and worthwhile.