How To Choose an HR Software Development Company? Questions You Should Ask To Avoid Pitfalls

・15 min read
How To Choose an HR Software Development Company? Questions You Should Ask To Avoid Pitfalls

What is the first thing a business owner or a manager should do before selecting the company's software? Well, the very first step is always to ask questions. Questions you should ask yourself, why do you need this software? The question you should ask the developers, how they will build the software. There is an excellent saying by Carl Sagan, an American astronomer and he said:

There is no such thing as a dumb question.

We get afraid of asking questions that it will make us look stupid. But you shouldn’t get afraid, especially when you are investing a huge amount in buying or building something like HR software. Small to medium-sized business managers tend to reject using HR Software, irrespective of the fact that HR software or HRIS can boost their overall performance by streamlining the processes.

The first question that an owner should ask is whether they should choose ready-made or create a new SaaS product for B2B. The rapidly growing interest of companies in HR solutions generated the idea of SaaS-based HR software.

Read more about SaaS-Based HR software, its advantages, and benefits in our comprehensive blog

Asking questions is important for your business. It will help you decide what is best as per your business requirements. If you don’t ask questions, you might end up losing a considerable amount of investment, or worse, you will be stuck with a useless HRIS, which will snatch money out of your pockets every month and, in return, give you nothing.

Think of the potential chaos and crater-sized hole in your budget after rolling out a system you need to replace.

Before getting to the list of must-ask-questions from a Software Engineer or an HR Software development company, let’s dive into more details about HR Software and its types.

What does HR Software mean?

HR software is a central hub consisting of all the systems designed to manage Human Resource management in businesses of all sizes. It helps to boost performance and employee satisfaction levels. We know HR software through many names such as HR system, Human Resources Information System (HRIS), Human Capital Management Software (HCM), and Human Resources Management System (HRMS).

There are many different types of HR systems. We will discuss the main types in a bird's eye view.

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#1: Human Resources Information Systems (HRIS)

Human Resource Information System (HRIS) is software designed to provide a complete solution for data entry, data management, and data tracking of an organization's human resources operations. It is also referred to as Human Resource Management system (HRMS) as it helps businesses manage and plan human resources quite effectively. It can be used by a small, medium, or corporate company.

#2: Hiring Software and Applicant Tracking System (ATS)

An Application Tracking system is software designed to automate the hiring and application tracking process. It helps businesses increase the efficiency and productivity of the overall HR department and recruiters with a centralized database.

#3: Employee Performance Software

Employee Performance Software is designed to help businesses review employee performance based on set individual goals. The software also performs other functionalities such as collecting feedback, storing documents, reporting the important performance key metrics to stakeholders.

#4: Employee Engagement & Work Culture System

Employee Engagement Software helps businesses boost employee sentiment and increase individual and team engagement. It is done through everyday work priorities, feedback, coaching, and analytical reports.

#5: Onboarding Software

Onboarding software is designed to help businesses make the onboarding of a new employee easier and smooth through all the necessary steps. It enables the new employee to become a full-fledged and productive cog of the organizational machine, from digitally signing important paperwork to completing training tasks.

#6: Learning Management System (LMS)

A Learning Management System (LMS) is a tool designed to track an employee’s education, certifications, qualifications, and skills. It connects the employees with materials or courses available to develop their skills within or outside the organization.

Why do you need HR Software for your Business?

There are numerous benefits and advantages of having a high-quality HR system in the company. Let’s discuss the top benefits of having an HR solution.

Benefit # 1: Less Workload

HR software helps businesses streamline the process with increased productivity. With an HR solution, there will be no need for excessive paperwork and file keeping. Employees can enter, update and monitor their details. HR managers can also request information when needed.

Benefit # 2: Help in Decision Making

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HR Software helps employees and HR managers to gather all data at one central point. The data can be used to monitor and track attendance, time, leaves, performance, or any disturbing pattern. Managers in all departments can request the data in the form of analytical reports and charts to make a sound and better decision.

Benefit # 3: More Employee Satisfaction

HR software gives a boost to employee individuality. An employee feels more involved in the process by getting self-service functionality such as updating their personal information, requesting leave, and checking company policies with simple clicks on their smartphone.

Benefit # 4: Measurable ROI

Measuring ROI on an employee with a simple equation is very difficult. But, HR software automates the entire process. Hence the time invested in these processes will be radically diminished. HR professionals can concentrate on more valuable jobs such as delivering on business goals and focusing on strategic outcomes.

Benefit # 5: Security of the Employees’ Data

HR software is usually cloud-based or SaaS-based, and in both cases, the employees' information is protected by encryption and backup procedures.

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Benefit # 6: Reduced Risk

When the company has HR software for all the work, there will be no need for paperwork which means there will be less risk involved. Since all employees' data are safe in the cloud with frequent backup, no human error could make it risky.

Benefit # 7: A Centralized Hub

All employees’ data is stored and collected at a centralized hub. So it will be easier for HR personals and managers to get rid of duplicate entries and retrieve data for payroll in clicks.

Benefit # 8: Simple Integration with Mobile Friendliness

HR software can be easily integrated with your Gmail, work email, Google Drive, or calendar. So, automatic messages sent every time a request is sent or accepted make it easier to be connected with your job even when you are at home via your smartphone. You and your employees can make decisions on the go about time and attendance.

Now, we come to the main point of the article. Let say you decided to get a custom-build HR software through a software development company. If so, here are the main questions you should ask them before hiring them to develop your HR software.

10 Questions To Ask Before Choosing An HR Software Development Company

Choosing the right HR Software for your company is a complex job. If you don’t know your company’s needs and what you want to improve with HR software, then there’s a huge chance you will end up with a platform that won’t solve your company’s challenges. If this happens, then you won’t get back the time and money.

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Fortunately, to help you get the right HR software the first time, here’s a list of 10 questions you should ask before choosing an HR software development company.

Question # 1: What is the biggest HR difficulty your company faces?

In the first step, you need to question your process and systems. You, as a business owner, should understand the basic challenges your company is facing. Is your HR team spending more time duplicating information on the different systems because they are not integrated? Does your company have a complex PTO request and approval system? Is the employee turnover in your company very high that it consumes your recruiting budget before the end?

The hardest challenges are usually the results of inefficiencies. You need to allocate what issues are creating the greatest challenges that are hard to face. Locate those areas where the company is facing more challenges; coordinate with employees in the trial and your HR people who deal with human resource management daily. They will be the better guide as handling the pulse of the overall operation. They will help you set priorities for a technology platform.

Question # 2: What tedious everyday tasks in your organization are a waste of time?

Ineffectiveness in a process or a system occurs due to improper allocation of resources. You need to understand if your company is exhausting resources on tasks that can be eliminated or redundant?

For example, if your company is exchanging employees’ information between the HR department and Finance department every week, isn’t there a way to shift this process weekly to Bi-monthly or monthly? Adjusting the frequency of tasks can be a simple and effective solution.

Question # 3: What is your organization doing right?

Are you blindly applying the proverbial Band-Aid to the entire HR department? If your HR department faces challenges, it doesn’t mean that all the HR processes need an overhaul. Making improvements is a good step, but don’t get too overexcited that you ignore the company's already efficient process.

Make sure whatever technology you choose facilitates the areas of your HR operations that are working well, rather than creating new problems that didn’t exist before.

Question # 4: What are the Key Needs of your Company?

The process that is causing issues, consuming most of your time, and costing more than expected should be the greatest priority to fix. If you successfully identify these processes, you will be one step closer to selecting the right solution for your company.

Question # 5: What features will be the most important and effective for your company?

You have already allocated the most critical issues of your company. Now, it is time to list down what features will improve your overall process and boost your employees’ performance. Although this list is reserved for wants versus needs, these “extras” can sometimes be the difference between an efficient organization and an exceptional one.

What is the difference between must-have and nice-to-have? We have already listed the hardest challenges the company is facing; features to resolve those challenges will come under the list of must-have features. Whereas the list we created for extra features to boost and improve performance comes under the nice-to-have list.

For example, suppose payroll processing and paperless employee onboarding processes are your HR must-haves. In that case, your nice-to-haves might include a fully integrated employee performance review or applicant tracking system.

Question # 6: What are the top goals you want to accomplish, and how to measure the ROI?

What are the main goals you want to achieve once the software is placed in the company? How will you measure the ROI? Knowing the answer to these questions is important. Your goals may be reducing paperwork, employee turnover, waste of time, etc. It can also be such as cost-effective training for employees, hiring the best fit for the job, or time tracking management.

These goals should be closely aligned with the HR department. The right HR solution will help you overcome your greatest HR challenges, which in turn can lessen your administrative burden and make your business more profitable through increased efficiencies.

Question # 7: Who will be involved in the decision-making process?

Determining the list of decision-makers doesn’t mean that everyone who is making a decision should access the HR software. If this happens, it will cost you too much to buy a subscription for every employee. Access to the HR software should be granted to people who are directly involved in the process. Apart from this, one representative from each department or team within your organization is enough. This group of representatives will serve as your vendor in the software selection committee, and their key role will be helping you weigh the pros and cons of software development companies.

The second question is how the selection process will take place? Will everyone in the committee get the chance to present their views, or will select members to have a say in the decision? These are factors best considered in advance – not as an afterthought.

Question # 8: What’s our budget for purchasing an HR platform?

Budget is the second most important factor in the entire process of choosing an HR software development company. You should have a complete knowledge of the funds available to make you enable to determine which vendors and platforms are within your budget and which ones aren’t. It will help you narrow down the top contenders without wasting time on options that may not be the right fit for your company.

Question # 9: When do we want to have a system in place?

Deadlines are one of the most effective KPI for any task. Before making your decision, you should have a realistic deadline for when you need the company's HR solution placed. The deadline will be decided on key factors such as how much time it will take for the selection committee to decide which option is best for the company. It will also be affected by the time the vendor will take to implement the system. It is better to keep deadlines flexible.

You also need to consider the company’s procurement protocol and fiscal calendar, which will decide how soon you can implement HR software.

Question # 10: Choose a Ready-Made or On-Premises Solution? How to Choose an Outsourcing Company?

Your company’s requirements, budget, and challenges will decide whether you should go with a readymade solution or choose an on-premises one. If you need just time tracking or Payroll management, building an entire software and investing money would be a foolish decision. Similarly, if you have more requirements like time tracking, hiring, payroll, reviewing, and training of your employees in your mind, then a ready-made solution won’t be the best idea. In such a scenario, you should better invest in on-premises, customized, and as-per-the-required HR solutions.

Choosing an HR software development company is a crucial job. You are probably wondering how to pick the best one and avoid misunderstandings and disappointment. Here’s a complete guide on how to choose an outsourcing company.

Well, now you know what questions you should consider before choosing an HR software development company. Let’s discuss the pitfalls to avoid while choosing an HR software development company.

5 Pitfalls to Avoid

Here are five deadly pitfalls you should avoid.

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Fixating on Budget

Budget is important, but it shouldn’t drive your entire decision. There are other factors to take into account while making your decision. If you do not ask these questions before making the decision, your entire selection process will be based on your budget.

Focusing solely on price doesn’t provide a holistic view of whether the selected HR solution will meet your company’s requirements. It’s important to consider all features and functionality and compare that with the total cost for everything your company will need. This approach makes it easier for you to compare different platforms and systems with different features and pricing models, such as a-la-carte vs. flat fee.

Not Having MVP

MVP means Minimum Viable Product. It is a version of a product that has a limited set of features. If you get caught up in the bells and create unrealistic expectations without evaluating your company and employees’ needs, you will end up with a useless HR solution.

Not asking for Client Testimonials

A testimonial is a recognition of any company’s journey via its clients. When choosing an HR software development company, don’t forget to ask for the company’s testimonial and client profiles. It will give you a better idea of the company’s standing within the market. It will also help you understand the skill sets of the development team working for the company.

You can also try contacting some of their clients directly to ask for more details on their collaboration and recommendation.

Not getting Involved in the Process

Getting involved in the entire process of development is very important. You should have a clear understanding of the technology stack for the platform. You should also know the team working on your project, their expertise, skills, and what communication tools they will be using for the entire development process.

Employees Not Comfortable with the Software

The involvement of your employees is very important too. Because your employees, especially the HR people, will be the end-user of the HR software. If they do not buy the software, there will be no use for your investment. Before implementing the software, employees’ feedback is very important.

Final Thoughts

By considering these questions, you will be better prepared to make the perfect selection. Take the time to analyze your requirements, getting employees' feedback, listing down the must-have features, drafting a list of goals to achieve, and above all, analyzing the options which provide HR software within the budget.

Ask these questions and be confident that you have found the right software for your company. Be confident that this investment will grow your business, increase your employee satisfaction, and boost the ROI of your company.

If you are still uncertain and undecided about choosing the right HR solution for your company, you can always take experts' opinions at Selleo. We have a team of highly-experienced developers who can provide you with useful insight into everything you need.

Don’t hesitate and contact us now for guidance on every step.

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