Cheap or Expensive: What HR Software Better Suits Me?

7 Practical Steps on How to Choose the Right HR Software for Your Business

Is Excel not helping anymore? Are you ready to switch from spreadsheets to an HR software?

Great! Now it’s time to answer the next BIG question that you, as a CEO, should consider when choosing an HR software: What HR Software better suits my company?

No matter what kind of industry you are in, your most important assets are the people working under your roof.

As a CEO or manager, you are well aware of the importance of building a productive workforce, fostering employee engagement and ensuring compliance to trainings and company protocols — I can’t stress these enough.

The right HR software can help you achieve these tasks. Streamlining and automating your HR processes can give your HR employees more time to focus on strategic initiatives that will move your business forward.

But with the plethora of HR software out there, how will you know that Software X is the right one?

Here are 7 practical steps on how to choose the right HR software for your business.

1. “Get Smart” About the HR Software Market

This step is vital in your selection process. And if you’re like most people, you’ll find this task enjoyable too!

There are a lot of resources to research from — you can read blogs and marketplaces (G2 Crowd, GetApp, Capterra) download white papers or simply ask Google.

If you already have some background about the HR software market, you can still use this step to find out what’s new.

Remember that your goal here is not to become a software expert but to gain enough understanding that will help you make informed decisions.

Here are some things to look for in your research:

  • Understand the functions/features
  • Understand various deployment models – is the software web-based or must it be installed manually?
  • Be familiar with the jargons and terminologies used in the industry
  • Cost

2. Know Your Software Requirements

Prioritize your software requirements as this will serve as the foundation of your software selection process.

By doing this, you put yourself in a better position to control the selection — don’t just get carried away by the vendors’ marketing fluff.

You can start by identifying what your challenges are and what your current HR platform is not doing for you.

You can then go ahead and create a list of software capabilities you need to address the problems and shortcoming posted by your current system and growing business.

From experience, we’ve learned that asking inputs from your employees will help a lot! After all, they’ll be the ones who will be using the HR software.

When your list is complete, you can rank them according to importance — what you need and what’s nice to have.

3. Shortlist Software Vendors

There are literally hundreds of HR software vendors out there. So this step might pose a significant challenge on your part.

Despite this, creating a short list of software vendors is still a necessary step in choosing the right HR software for your business. Here’s what you can do:

Start with a long list of products and then eliminate the HR software that don’t meet your industry, functional requirements and business size.

After that, request a price quote from remaining vendors. Remove the systems that are too expensive for your budget.

Once you’ve narrowed down your list to at most 5, go ahead and engage those vendors in the sales process.

4. Product Demonstrations

You need too see your shortlisted products in action so it’s imperative that you arrange for a product demonstration.

To make demos more effective, you can provide each software vendor a script that emphasizes specific workflows that you want to see. The more detail you provide in this script, the better. During the demonstration, you can keep track of your impressions using a demo scorecard.

You can also invite some of your co-workers or HR personnel to participate as their impressions are also valuable.

If it’s impossible for you to arrange for a live demo, most HR software in the know have trial periods that you can use.

5. Scorecards

During the demo, expect that vendors will throw in their carefully crafted and enticing sales pitches.

To keep yourself from being distracted, it is important that you complete a scorecard throughout the demonstration.  A scorecard allows you to make a direct comparison of each software’s capabilities to meet your company’s needs.

You can also provide scorecards for each co-worker that will be participating in the demo. Compile the scorecards after the demo and you’ll have the information you need to make the purchase.

6. Vendor Background and Viability

The demo and the scorecards should have have narrowed your list to one vendor. Now that you have a system that fits your needs, your budget and aesthetics, the next step is to verify the vendor’s viability.

You need to know for yourself if the vendor and its products are really what they’ve claimed to be. The best way to do this is to ask the vendor for customer references that (if possible) share the same challenges/dilemma with your company. Talk to them and when you do, dig deep.

Here are some questions you can ask:

  • What are the challenges you’ve faced with the system?
  • How did the vendor responded to your queries (i.e. customer support)?
  • What would you change about the software, if given the chance?
  • Given your experience, will you recommend this software to our company?

Will the vendor stick around? If you’re using this HR software for a long time, it is imperative that the vendor is at the position (financially and strategically) to last for years.

7. Review and Understand the Software License Agreement

Before you write that check, it’s critical that you review and understand the software license agreement. Most software companies provide discounts based on the size of the deal.

Of course, there are others who don’t offer such discounts. Nevertheless, asking for a discount (especially if you are in for the long run) won’t hurt.

Negotiate the best deal possible. Also, you need to make sure that you are buying enough licenses for the company.

You also need to be wary of auto-renewal and you should have contingency plans in place should the vendor doesn’t hold up their end of the deal.

The Bottom Line

The right HR software can propel you business forward. The opposite is also true if you made a wrong choice.

I hope these steps will help you find the right HR software for your business. One last tip:

Don’t overpay for the features you don’t need. There are a lot of HR software vendors out there who offer HR solutions at the enterprise level.

If you’re just a company of 15 to 25 people, don’t take the bait. Identify your needs and buy an HR software that answers that need.

Anything more than that is just a waste of money.


Written By

Lenmark Anthony Baltazar

I have been living a life of HR for as long as I can remember. My experiences helped me realize that true happiness comes from being a blessing to the lives of others. I hope my skills and talents will be a blessing to you as well.