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Updated Apr 30, 2024

The Best HR Software: Key Differences Explained

If you're feeling overwhelmed by the many types of HR software on the market, this guide will help you break down not only what's out there, but also what options we think are best.

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Written By: Skye SchooleySenior Lead Analyst & Expert on Business Operations
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Utilizing robust HR software is a must for running an effective human resources department. When used correctly, it saves businesses time, money and resources. In our HR Management Systems Market Report for Small Businesses, more than two-thirds of users found that HR software slashed payroll processing time, while 25 percent noted improved legal compliance.

There are many types of HR-related software on the market. Some are all-encompassing, while others are more specific for different individual aspects of HR. Here is a breakdown of not only what’s out there, but also the HR software we think is best. 

What is HR management software?

Instead of keeping manual HR information records, HR software digitally stores and manages core HR functions, such as staffing and onboarding, payroll and benefits administration, workforce management, employee training and development, performance management, and legal risk and compliance.

You may have heard the terms “human resources information system” (HRIS), “human capital management” (HCM), and “human resource management system” (HRMS). Although they vary slightly, HCM, HRIS and HRMS refer to the same general concept: managing human resources via software. 

 

HRIS (Human Resource Information System)

HCM (Human Capital Management)

HRMS (Human Resource Management System)

Focus

Data management and employee records

Strategic workforce management

Comprehensive HR functions

Scope

Primarily administrative

Strategic and operational

Combines administrative and strategic

Key Functions

Employee records, time tracking,  payroll, benefits management, compliance

Talent acquisition, training, time tracking, payroll, benefits management, performance management, employee engagement, analytics

Talent acquisition, training, employee records, time tracking, payroll, benefits management, performance management, employee engagement, analytics

Integration

Often standalone or basic integration with other systems

Integrated across HR processes and departments

Integrated across HR and business systems

There are many sub-genres of HR software (which we cover below) that can funnel up into the HRIS, HCM and HRMS categories. It’s important to note that some software serves a single purpose (i.e., payroll software is for payroll), while other solutions are more comprehensive, satisfying multiple HR functions (i.e., recruiting, onboarding, benefits administration, payroll, performance management, analytics).

What is the best HR software?

There is a wide range of HR management software on the market, each with its own specific features, benefits and limitations. Some software serves niche purposes; however, we found many of the best software to be more comprehensive, offering all of the services needed in one easy-to-use platform..

We spent dozens of hours researching and analyzing various HR systems to identify the top solutions. Here are some of our favorite options when it comes to full-service, comprehensive HR software.

Best All-In-One HR Software

Check out our complete buying guide for the best HR software here

Company

Description

Full Review 

BambooHR

BambooHR is great for employers who want self-service HR management software with an easy user interface and performance management features.

BambooHR review

Bambee

Bambee is less of a standalone HR software and more of an HR service. It’s a great option for small businesses looking for additional compliance support. Useful features include HR audits, policy creation and staff training. 

Bambee review

Gusto

Gusto’s HR platform has robust payroll functionality. It can also help you onboard new workers, administer benefits, track hours and PTO, process single-state and multistate payroll, and file payroll taxes.

Gusto review

Rippling

Rippling’s HR solution can be used with or without the co-employment model of a PEO. In addition to automating several HR processes, it has IT and finance features.

Rippling review

Paycor

Paycor is a competitive HR software with robust analytics features. Not only does it offer data in a simplified manner, but it can also identify workforce trends and compare certain metrics against benchmark industry data. 

Paycor review

Insperity

Insperity offers essential HR features like payroll, benefits administration, employee training and professional development. It offers PEO and non-PEO plans.

Insperity review

HR management systems solve a plethora of HR problems. However, certain types of software are better at addressing particular needs. Before you choose an HR solution, determine which functions your HR software should accommodate.

TipBottom line
Are you ready to find the best HR management system for your business? We've spent dozens of hours doing the research for you. Check out our comprehensive buying guide for a comparison of HR software on the market!

What are the different types of HR management systems? 

There are several types of HR management systems. While some systems serve one primary function, others are comprehensive and include a combination of services. Here are 10 of the most common HR management system types and some of the primary services they include.

  1. Recruitment software
  2. Employee scheduling software
  3. Time and attendance software
  4. Benefits administration software
  5. Compensation management software
  6. Payroll software and services
  7. Learning management software
  8. Employee monitoring software
  9. Performance management software
  10. Employee engagement software
FYIDid you know
When choosing HR software, pay attention to how it integrates with your other platforms. For example, if you use one platform for time tracking and another for payroll, they must integrate properly to ensure you are compensating your employees correctly.

1. Recruitment software

Finding the right employees can be crucial to your business’s success, but attracting and hiring top talent can be tough. In a survey by PwC, 39 percent of HR leaders said recruiting and hiring was one of their biggest challenges. Recruitment software can be a game changer for this process because it allows you to cast a wider (or more targeted) net to find qualified candidates. As a result, more businesses are using HR software as part of their recruitment process.  

There are multiple types of recruitment software. Some common types include: 

  • Applicant tracking systems (ATS): This software lets you track applicants throughout the recruitment process to ensure they move swiftly through the funnel before they get swooped up by the competition. This includes tracking information like job postings, resume screenings, interviews, and candidate profiles.
  • Recruitment candidate relationship management (CRM) systems: Recruitment CRM systems focus on building and managing relationships with potential candidates. They often integrate with ATS to track interactions, communication history and candidate engagement.
  • Video interviewing software: Whether you are conducting a preliminary screening for a candidate or a final interview for a remote worker, video interviews have become a mainstay in the recruitment process. Video interviewing software can facilitate this process with features for scheduling interviews, recording sessions, and sharing feedback with hiring teams.
  • Background check software: Some software and services allow you to screen candidates with pre-employment background checks to verify criminal records, employment and education history, professional licensing and more. It is a useful way to ensure compliance and mitigate potential risks.
  • Onboarding software: Once a candidate is cleared and ready to hire, you can use HR software to onboard them. This software has features to help automate paperwork and digitize documents with e-signature capabilities. It can facilitate training modules, compliance tasks, and employee introductions through automated workflows.

It’s important to note that some recruitment software can perform multiple functions of the software listed above. Additionally, many of these types of software can integrate with each other to allow for a seamless recruitment process.

Did You Know?Did you know
A bad hire can cost your business 30 percent of the employee's first-year earnings. Proper vetting and recruitment can help you avoid this mistake.

2. Employee scheduling software

If you want your business to be as efficient as possible, you must manage your workforce strategically. Employee scheduling software provides features to help manage your workforce efficiently and allocate resources effectively. It simplifies the process of assigning shifts, tracking employee availability, and handling time-off requests. Additionally, it provides insights into labor costs, productivity trends, and compliance with labor regulations, aiding in strategic decision-making for staffing needs. Proper staffing means your customers receive appropriate attention and your employees aren’t overworked.

Buddy Punch scheduling software

Online employee scheduling software makes it easy to manage employee schedules on the go. Source: Buddy Punch

3. Time and attendance software

Time and attendance software allows you to monitor employee time so you can compensate workers accordingly. It tracks how many hours each team member works, the locations where they clock in and out, and how much time they spend on specific projects or jobs. You can also track and manage paid time off (PTO) requests. These features ensure you comply with labor laws and avoid time theft.

Best Time and Attendance Software

Check out our complete buying guide for the best time and attendance software here

Company

Description

Full Review 

Connecteam

Connecteam is a great time and attendance solution, especially for frontline workers. It has a user-friendly interface, communication features and customized overtime rules.

 

When I Work

When I Work is a versatile time and attendance solution for restaurants and retailers. It has advanced shift scheduling, team messaging features, and a mobile app.

When I Work review

Buddy Punch

This time and attendance solution has useful features like break planning, shift trading, and biometric time clocks. It also has an add-on feature for workforce analytics.

 

TimeClock Plus

TimeClock Plus (TCP) is a highly customizable software with multiple plans and tiered support. In addition to time tracking features, it can also track projects, jobs and tasks.

TimeClock Plus review

QuickBooks Time

QuickBooks Time is a time-tracking and employee-scheduling software platform that helps businesses efficiently manage HR and payroll for in-office and mobile workforces.

QuickBooks Time review

4. Benefits administration software

Benefits administration software simplifies the management of employee benefits like health insurance, retirement plans and paid time off. It centralizes all benefit-related information, automates enrollment processes and generates reports to track usage and costs. This software helps save time, reduce errors, and ensure compliance with regulations, allowing small businesses to focus on supporting their employees’ well-being.

ADP benefits administration

Managing employee benefits is made easier with benefits administration services like ADP.  Source: ADP

5. Compensation management software

In recent years, pay transparency has become a top priority for many employers, and there is HR software that helps with that. Some HR and compensation management solutions track employee compensation and compare it against job benchmarks and industry standards. This functionality eliminates the guesswork of maintaining fair and competitive employee compensation throughout your company. 

FYIDid you know
HR software with compensation management features can help you comply with your state's sick leave and disability leave laws.

6. Payroll software and services

Payroll software processes payroll, file payroll taxes, reports new hires to the state, tracks and manages time off accruals, and pays your employees. Some solutions even integrate directly with your employee benefits administration to ensure each employee is compensated appropriately. An all-in-one HR solution, or multiple solutions that integrate, is a great way to ensure your employees receive their total compensation on time.

Did You Know?Did you know
Payroll is one of the most time-consuming HR functions. Our HR Management Systems Market Report found that 69 percent of people agree that their HR management tools cut down on this process.

Best Payroll Software and Services

Check out our complete buying guide for the best payroll software here

Company

Description

Full Review 

Intuit QuickBooks

Intuit QuickBooks is a top-rated payroll provider with excellent accounting integration. It offers multiple flexible subscriptions and next-day direct deposit. It also offers a contractor-only plan.

QuickBooks payroll review

OnPay

OnPay offers payroll with transparent pricing, user-friendly tools and unlimited multistate pay runs. It also guarantees tax accuracy.

OnPay payroll review

ADP

ADP is a powerhouse in the HR industry. It has several subscription plans, hundreds of application integrations and a tax filing guarantee. It also offers benefits administration that integrates directly with its payroll.

ADP payroll review

Paycor

Paycor is a user-friendly platform with many employee self-service capabilities. It offers unlimited payroll processing and flexible pay options. 

Paycor review

Gusto

The Gusto platform has robust payroll functionality. It can also onboard new workers, administer benefits, track hours and PTO, process single-state and multistate payroll, and file payroll taxes.

Gusto payroll review

7. Learning management software

Employee development is a crucial factor in many job candidates’ decisions to accept a new position. A well-defined employee development process helps attract and retain top talent while improving your bottom line. With a team of highly skilled employees in place, your organization produces better work overall. 

Learning management software provides professional development opportunities to your workers, often through e-learning platforms. Although some companies offer in-person training, online courses and workshops have become popular ways to upskill and educate employees. Giving employees a clear path to their future can help increase employee engagement and satisfaction.

TipBottom line
Are you looking for a learning management system? Check out our buying guide: 5 High-Quality and Low-Cost LMS Applications for Employee Skill Development.

Employees often use learning management software to access necessary training, including sexual harassment prevention training. Some HR software providers offer guidance to help you comply with labor and employment laws, such as ensuring COBRA and OSHA compliance.

8. Employee monitoring software

Employee monitoring software is a tool that allows small business owners to track and analyze their employees’ activities during work hours. It provides insights into productivity levels, task completion rates and time spent on various projects. This helps employers make data-driven decisions to optimize workflow and improve efficiency. Additionally, some employee monitoring software offers features like screenshot capture, activity tracking, keystroke logging and website usage tracking to promote accountability and ensure compliance with company policies.

Employee monitoring software can also be used to protect your organization. Some platforms let you filter and block certain websites and activities, configure user rules and permission settings, and monitor for insider threats.

Best Employee Monitoring Software

Check out our complete buying guide for the best employee monitoring software here

Company

Description

Full Review 

Teramind

Teramind has many useful security threat detections like video and audio monitoring, customizable content filtering, and audits and forensics.

Teramind review

ActivTrak

ActivTrak is an employee monitoring and productivity tracking solution that provides employers with the workforce analytics they need to optimize workflow efficiency.

ActivTrak review

Veriato

Veriato is a monitoring application that supports thousands of user endpoints. It has features like role-based settings, predictive risk scoring and AI-powered insider risk management.

Veriato review

SentryPC

SentryPC is one of the more affordable monitoring solutions. It has six service plans with features like real-time monitoring, keystroke tracking and content filtering/blocking.

SentryPC review

InterGuard

InterGuard is robust employee monitoring software package that helps businesses enhance productivity and security by tracking and managing employee activities on in-office and remote devices.

InterGuard review

9. Performance management software

HR software manages employees’ performance through goal setting, real-time feedback and performance reviews. The best software compiles a vast amount of data that can be used to create an excellent employee performance process. You can identify your most efficient workers and reward them accordingly. You can also see who might be approaching burnout or who needs a little extra training or support.

BambooHR software

HR software with performance management features is a useful tool for monitoring employees’ progress toward their goals. Source: BambooHR

TipBottom line
If you notice an employee is struggling to meet their goals, consider putting them on a performance improvement plan.

10. Employee engagement software

Employee engagement software is a digital tool designed to foster meaningful connections and boost morale among your team members. It helps you understand your employees’ needs and preferences, facilitate open communication, and create personalized experiences that promote a positive work environment. Utilizing this software can cultivate a motivated and engaged workforce, and increase productivity and employee satisfaction.

What are alternatives to HR software?

Just because there are many types of HR software available, doesn’t mean HR software is the right choice for everybody. For example, if you don’t have internal staff available to use and manage the software effectively, it may render useless or under-utilized. For some companies, it is more beneficial to outsource their HR functions to a third party like a human resources outsourcing (HRO) service or a professional employer organization (PEO). 

If you’re looking for a more comprehensive HR solution that can handle some or all of your HR responsibilities for you, consider using one of the best HRO services or the best PEO services available. In our buying guides, we break down the best options. 

author image
Written By: Skye SchooleySenior Lead Analyst & Expert on Business Operations
Skye Schooley is a dedicated business professional who is especially passionate about human resources and digital marketing. For more than a decade, she has helped clients navigate the employee recruitment and customer acquisition processes, ensuring small business owners have the knowledge they need to succeed and grow their companies. In recent years, Schooley has enjoyed evaluating and comparing HR software and other human resources solutions to help businesses find the tools and services that best suit their needs. With a degree in business communications, she excels at simplifying complicated subjects and interviewing business vendors and entrepreneurs to gain new insights. Her guidance spans various formats, including newsletters, long-form videos and YouTube Shorts, reflecting her commitment to providing valuable expertise in accessible ways.
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