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HR software – Reasons for purchasing

Category: Blog HR Products Technology

Every year, thousands of buyers contact consultants and software advisors in search of new HR software. Latest stats from Software Advice gives us valuable insight in understanding their pain points and what they’re looking for in a new system. They looked at over 200 of these interactions over the past year with some interesting results…

Nearly Half of Buyers Rely Solely On Manual Methods
Forty-eight percent of buyers rely solely on manual methods, such as pen and paper or general purpose software like Microsoft Excel, for their HR needs. This is 16 percent more than the 32 percent of buyers that currently use some form of dedicated HR software. Relying on manual methods presents a wealth of problems. For one, it’s incredibly inefficient and doesn’t scale well with company growth. Relying on things like spreadsheets for important tasks like payroll and attendance tracking can also lead to a number of errors and can also present a security threat against employees’ sensitive information.

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Manual Method Users Want Efficiency; Others Seek Functionality
The biggest reasons that current manual methods users are looking to purchase HR software are to improve efficiency and organisation (44 percent) and to automate HR processes (22 percent). With up to 80 percent of an HR department’s time spent on paperwork and administration alone, implementing dedicated software for the first time can present obvious benefits.

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On the other hand, those currently using business software (HR software, accounting software, etc.) are looking to purchase a new system most often for more functionality (35 percent) or to consolidate and centralise information (19 percent). Buyers are looking to handle the entire employee lifecycle (recruiting, onboarding and personnel needs) with one to two systems which can help eliminate a lot of double-entry.

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Buyers Primarily Seek Personnel Tracking or Recruiting Functionality
Forty-five percent of buyers want their new system to have personnel tracking functionality, while 30 percent want recruiting functionality. Digging deeper, buyers requesting personnel tracking functionality most often want the software to track contact details (69 percent), paid time off (PTO; 65 percent) or sick leave (49 percent). The total direct and indirect cost of PTO can reach as high as 38 percent of payroll, so companies would be wise to accurately track this benefit.

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Buyers requesting recruiting functionality most often want to track applicants (100 percent) and be able to post job openings (45 percent).” – Brian Westfall, Market Research Associate

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