Checklist to select the right HR software for your business in 2022 

Business growth calls for making changes to how things are being done. In the digital-first era, adoption of new technologies for automation and optimal operations will be required. Digital transformation in MSMEs is essential, and as a business owner you can give your business the competitive edge by investing in digital tools and software solutions for growth and process optimisation.  

But finding the right software solution to invest in can be tedious. And while an ERP or CRM solution often tops the list of must-haves, a HR software should also be prioritised.  

In this article we look at: 

  • The benefits of HRMS software in business 
  • A checklist to find the right HR solution for your MSME in 2022 


Why your business needs a HR software? 

The importance of HR solutions has grown significantly in recent years. As businesses grow and scale, the need to manage employee data, track attendance and performance, and stay compliant has become crucial.  

The strategic value that HR management systems can offer businesses is gradually being recognised by businesses of all sizes, with many investing in HR software.  

Some of the popular benefits of HR software for small businesses include: 

  • Managing employee data from a centralised database 
  • Automating employee attendance tracking, payroll, performance, and lifecycle  
  • Reducing manual errors and paperwork, and saving time and cost  
  • Drawing insights for enhanced decision making through analytical reports 
  • Improving efficiency to focus on strategic planning  
  • Keeping business compliant   

Not surprisingly, HR systems are being considered as a game-changer in agile business environments. As a MSME owner, with limited budgets and resources, it is important to find a HR tool that is aligned with your business needs and helps it achieve it. 

In the next section, we walk you through a checklist to find the right HR solution for your business. 

Checklist for selecting the right HR software 

There’s a host of great HR software in India available for businesses today. As a business owner, before purchasing a HR tool, ask the following questions: 

  • What are the must-have features/functions? 
  • How easy/difficult is it to use? 
  • Is it cloud-based or requires software installation? 
  • What subscription plans are available? 
  • Can it be scaled based on business requirements? 
  • What is the customer support like? 
  • What are the reviews/ratings the tool has? 

Let us look at each of the checklist items to understand them better. 

Relevant features and functionalities of HR software 

The first thing you need to identify are the features and functionalities the HR software should come with. This must be aligned with your business goals and organisational objectives. For instance, if your goal is to: 

  • Manage remote employee leaves and attendance, you need an attendance management software with advanced attendance tracking features such as location tracking and facial recognition or image-based (selfie) attendance. e.g., ubiAttendance 
  • Streamline and simplify payroll processes and attendance, while automating statutory compliance needs, you need a HR payroll management software. e.g., greytHR 
  • Automate end-to-end HR process including recruitment, attendance, payroll, performance, expense, core HR etc. you need an integrated HCM suite or cloud HRMS software e.g., HROne 

So, think of your HR and business goal and find a software that caters to it. The best practice would be to check with key stakeholders on how an HR tool will help their departments. For example, for the HR team, tracking attendance is important; for sales managers, ensuring that teams have a cloud-solution to mark attendance on the go is important. 

Ease of use

The next thing to consider is how easy is it to use the tool. Identify who the end-users of the tool are and test it with them. For instance, if the end user are HR managers working from office, then test if they find it easy to use; if the end users are reporting managers (remote) then test if they are able to login easily and use it effectively. 

Ask the following questions to evaluate user-friendliness of an HR application

  • Who needs to use the software? e.g., HR managers, employees, team managers, business owners etc. 
  • Is the app easy to instal/download?  
  • Does it work on existing systems/devices? Is additional software/hardware installation required? 
  • How will training be provided to the required stakeholders?  

Appoint representatives from every team to participate in the product demo sessions and share their feedback. As end-users, they will be able to provide honest feedback that will help you to decide better.  

It is not unnatural for users to struggle with new tools. After all, not all your team members are technology savvy. The HR solution you select should be easy even for those who are new to technology adoption. 


On-premises or cloud-based HR software system

On-premises software comes with its own benefits (e.g., advanced security, storage, functionality etc.) and there was a time when every business gained from it. But with the advent of digital solutions and cloud technology, there’s the gradual shift to cloud-based solutions. 

Cloud software makes it convenient for users to access it on the go and update details in real-time. In many cases, they come with mobile accessibility, making it possible to access it on their phones. 

For instance, greytHR payroll solution, is a cloud-based application that allow employees the flexibility to self-login and update tax declaration, leaves and attendance, or download payslips. There is little reliance on emails or writing to HR teams. Employees can update data, and the data is automatically updated in the centralised database with additional support.  

Subscription plans and HR software cost 

Ideally, pricing should not be among the first things to consider – the features and benefits of HR solutions are what should be accounted for first. However, as a small business owner, cost must be factored in when selecting and purchasing a HR solution. 

Check for the following details: 

  • What are the available subscription plans? How many users are allowed at one time? 
  • What is the base package? What are the add-on features and pricing? 
  • Is it scalable? How will pricing affect as more users are added? 
  • Does it come with a free-trial offer?  
  • How about refunds? 

In certain cases, apps do not provide free trials. In that case, check if refunds are available.  

Also, go for quarterly subscriptions to begin with instead of annual plans. This will give your team time to adopt to the new tool. In certain cases, where you are sure of the value a new HR tool will bring to the team, annual plans work best. They also come with the best pricing offers. 


Scalability as per business needs

As a business owner, your MSME growth should be on top of your mind. Growth in terms of number of employees, revenue, markets catered to, products/services and more. This means that when you are evaluating suitable HR applications for your MSME, you need to ensure that the app will be able to accommodate your business’s growing requirements. 

Simple things to check here would be: 

  • Number of users the HR system can support 
  • Features offered based on pricing and users 
  • Ability to customise based on changing business requirements  
  • Storage and security offered (don’t ignore security as this will affect other aspects of business) 
  • Integrations offered and/or required 

Also, always check for existing clients to understand the size, sector, location of clients the app is used by.  

For instance, HROne cloud HRMS solution caters to large and small businesses across 20+ sectors. Payroll solution, greytHR is used by clients across 150+ cities. In brief, check if the tool you select can be scaled or not (and the complexities that come with it). 

Customer support offered 

It’s a no brainer that every business will provide prompt support and service before you buy the product – what matters is how the service is afterwards. 

When it comes to a human resource management system, it is expected that there will be queries and assistance required a lot of times. A reliable software partner will assign an account manager to help you with your queries.  

Also, check what channels are available to connect with support e.g., chat, email, phone, and what is the average response time for each. Most apps will be efficient on 1-2 channels only, and not all. Moreover, while a 24–48-hour window is acceptable for most tickets, response time for critical issues should be immediate. 

Reviews and ratings of HR app  

And last but not the least, your checklist for buying HR software should include online for reviews and ratings of the tools in consideration.  

It is not uncommon to find negative reviews online – e.g., poor customer support, software crashes, hidden costs, etc. What is important is to identify the real ones that will affect your business. For instance, a downtime for 2-3 hours can be ignored, or a bad customer support review provided 3 years back might not be relevant today. 

As a best practice, follow these steps: 

  • Before purchasing a tool, check the online reviews and highlight the alarming ones 
  • When negotiating, discuss the negative reviews and what they have done about it 
  • Check with business associates and groups on their feedback and recommendations 

Closing thoughts: When you are ready to buy HR software 

The checklist should help you to find and buy HRMS software solution good for your business. Understanding your business goal and how a new tool will help you achieve it is key to adding new technology in business.  

Understand that there is no best HR software or worst tool. Each tool has been built with an objective – and you need to find one that helps you to achieve yours.

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