Choosing the best HR software: Essential questions to ask

Looking for HR software? It can feel like a daunting job given the plethora of solutions on the market.

You’ll undoubtedly have done your research into the options available and had a look on a broad selection of supplier websites. You may have read a few case studies or ventured onto a software review site, such as Capterra, to get real-world user reviews.

Armed with your shortlist, your next step is to contact the suppliers, which you may want to do through their website, by email or simply on the phone. Speaking to a knowledgeable consultant is the fastest way to understand if the HR system ticks the right boxes for your business.

However, take a bit of time beforehand to equip yourself with a list of your key requirements so you can check them off as you talk to the different suppliers. This will make it easier to make comparisons, so you’ll know who you want to follow up with.

We know there’s a lot to think about when choosing an HR software solution, so we’ve put together a checklist of essential questions you should ask as a guide.

Getting a handle on costs

For most of us, the first step in any HR management software selection process is to identify the optimal match between system functionality and budget. While there is no point in selecting an HR system that doesn’t meet your essential requirements, putting forward a budget that the business won’t sign off is going to be a frustrating waste of your time.

HR suppliers have quite different pricing models when it comes to system fees, set up services and support. So, it’s important to ask the right questions to ensure there are no nasty surprises further down the line.

Licence/Subscription fees

• What are the subscription/licence fees?
• What are they based on? E.g. fixed headcount, active headcount, modules taken, users etc.
• How are they charged? E.g. Monthly, annually, in advance, in arrears.
• Have you increased your pricing in the last two years, and if so, by how much?
• Can I reduce the fees during the subscription term? E.g. if we have fewer employees or want to drop a module.
• If yes, how much notice is required?
• What is the minimum subscription term?
• Is there a cap on data storage? If there is, how much does extra storage cost?

Setup/Implementation

• What setup services are included in the licence/subscription fee?
• What would a typical implementation for a company of our size cost (and what does that include)?
• How long would you expect it to take?
• Do you help with data upload?
• Are any of the configurations / customisations you make carried forward into future releases at no charge, or might they need to be redeveloped and recharged for?

Training

• What training would you recommend?
• Who should be trained (HR, manager, employees, suppliers)?
• What does training cost?
• Can training be delivered online/at our office/at your facilities?
• What training is provided when new features are released?

Support

• Is support an extra cost? If so, how much?
• How does support work?
• Do you have an online support portal?
• What is your SLA (Standard Service Level Agreement)?
• What escalation processes are in place?
• Where are support staff based?
• What hours do they operate?

Maintenance & updates

• What ongoing maintenance and update services do you provide as part of your licence/subscription fees?
• Do we automatically receive new features for our purchased modules as soon as they are released?
• How are releases managed?
• Are updates included for free? If not, what should I budget for annually?

Considering contractual terms

As with pricing, you’ll find that suppliers have different contract and cancellation terms. Committing to a long-term contract may not be an issue for you, but, if you would like the freedom to move on if your needs change, it’s important to make sure you pick the vendor with the approach that works for you.

• What is the minimum contract period?
• How much notice must I give of cancellation?
• How do I get data back should I cancel?
• Is there a charge?
• How long do you retain data after cancellation (you’ll need to know this for GDPR compliance)?

Securing data (& GDPR compliance)

As an HR professional, you know how important data security is. And as the custodian of personal data within your organisation, it is your responsibility to secure and manage it in a way that complies with GDPR and the legal and lawful requirements of your organisation.

It’s rare to find an HR supplier that doesn’t treat data security just as seriously as you do. However, it is your responsibility to check – and to make sure the system will help you with your own compliance, too.

Vendor data security and GDPR compliance

• Is your HR system/service GDPR compliant (UK and EU)?
• Where is data hosted and backed up? Is it within the EEA or UK?
• How long are backups kept for? Is deleted data permanently removed?
• Who hosts the software and HR data? What certifications do they have in place?
• Do you have independent security certification, such as ISO27001?
• Do you have regular independent penetration testing in place to validate your data security measures?
• Is data encrypted?
• Can I set up different security roles for employees in different countries/parts of the business, so I can control what they can see or change?
• Can I use single sign-on or dual authentication?
• What password policies can I enforce?

Managing your own GDPR compliance

• Can I provide secure self-service, so employees can see and update their own information?
• Can changes to employee data be routed through single or multi-step approval workflows?
• Can I track whether employees have received, and signed to say they have read, key documents?
• Can I set up data retention policies to automatically delete or anonymise data in line with GDPR requirements and different requirements in different parts of our business, or is the process manual?
• Can I set up alerts to send out automatic notifications when mandatory training or other activities need to be reviewed?
• Is there a portal or central area where I can store documents – such as data security policies, new starter handbooks or compliance processes – for easy access by different sets of employees?
• How are subject access requests managed?

Document storage

One of the great things about modern HR software platforms is that many of them make it really easy to move away from having to rely on paper-based systems and processes. Not only is this much more efficient, it’s also much better when it comes to GDPR compliance.

All good HR systems will have some form of document management capability, but it’s important to make sure it has key features that’ll make your day-to-day activities both more efficient and more secure.

• Does it have the ability to upload, create, send, track and store any kind of document?
• Will I have the ability to edit uploaded documents via an in-built document editor?
• Can I easily distribute and track documents?
• Can I create custom document templates?
• Is there e-signature functionality?
• Can I create and distribute documents for e-signatures?
• Can I validate the location of where a document has been signed and spot potential anomalies?

Following the 80:20 rule

The best HR software solutions should be ready to use straight away. After all, you don’t want to be wasting time (and money!) setting up all the basics yourself, do you? For example, it should be easy and simple to upload data for your everyday HR processes, such as holiday approval workflows or sicknote notifications.

A straightforward way to think of it is the 80:20 rule. In truth, 80% of what any HR system does is universal across most companies (e.g. data upload, security roles, standardised workflows, notifications, key reports etc). These should be in the system from the start. However, the other 20%, the bit that makes the system fit your specific needs and way of working, is something you should be able to control.

• What data can you upload for me?
• How much do you charge?
• What security roles are already set up? How easy is it to tailor them to our business?
• What authorisation workflows are in place?
• What notifications are in place?
• Does the system come with standard reports, such as the Bradford Factor?
• What interfaces do you have in place (e.g. to payroll or LMS)?

Adapting to your way of working

Organisations don’t stand still, and your HR processes won’t either. So, alongside your check list of key features, it is essential to uncover just how flexible the system is – and how much control you have over set up and configuration. If you are reliant on your supplier to make changes, you’ll need to budget accordingly. Some of the key questions you may want to ask are:

• Can I create, save and schedule reports to run automatically?
• Can I streamline repetitive HR tasks such as tracking sickness, approving holiday requests or updating employee information?
• Can I access deep-dive people analytics and graphic reporting?
• Can I add my own forms with workflow authorisations?
• Can I set up my own security roles?
• Can I relabel or add fields?
• Can I change authorisation workflows to route in different ways in different countries or operations?
• Can I add new countries/languages/divisions/departments?
• If my license/subscription is based on a fixed figure, what happens if I add more employees?
• Do you have an open API and webhooks (which makes interfacing to third party applications more straight-forward)?
• Can HR, managers and employees have their own dashboards that include the most important information relevant to their specific role?

A reflection of your own brand

As you and your employees will be the main users of your HR system, it makes sense that it should fit in with your own organisation’s brand. A good brand identity permeates every consumer and employee touchpoint: why should your HR system be any different? Some questions to consider include:

• Can the system include my company’s logo?
• Can it be edited to reflect our brand identity, for example to use our own terminology or colour scheme?
• Can these adjustments be made by us, rather than requiring supplier or IT involvement?

Looking under the bonnet

Cloud hosted or Cloud native HR software solutions are now the standard with virtually all suppliers. However, not all Cloud-based systems are created equal! Given that choosing to invest in an HR system is a big decision, you’ll want to ensure what you’re getting is the latest technology.

There are three simple questions you can ask:

• Is your system multi-tenanted?
• Are all customers automatically updated with new features as soon as they are released?
• Can your platform automatically scale in response to system demand?

If the answer is no to any of these, the chances are the supplier is on an older technology platform. That may not be a problem, but it will influence future costs and, at the very least, you will want to run it past your IT team.

It’s also the case that good HR systems will have their own native mobile apps. This means users can gain access to self-service functions – such as absence management or time tracking, for example – whenever or wherever they may be. If your HR application is made purely for desktop use or doesn’t feature enhanced mobile capabilities, you’ll struggle to get everyone to use it.

• Which browsers does the application support?
• Do you have native mobile apps? If so, for which operating platforms?

Thinking beyond your immediate needs

Lastly, you should also consider how any HR software solution you choose can be futureproofed and scale with your business. It’s unlikely that your organisation’s workforce will remain static for a long period of time, and the needs of your HR team are also likely to change and flex depending on the challenges your business encounters. Some questions you may want to consider:

• Is there a limit to the maximum number of employees that the HR system can support in the future?
• Can the system be adapted to other business processes as the company grows?
• Are the system’s functions scalable depending on the needs of the business?

HR software buyer guides

We hope these questions will help you to find the right HR software solution for your business. But, if you still need some further guidance, why not check out our free HR Buyer’s Guide. You can download them both for free by following this link.