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Which HR tools are right for your company?

Expert Mary E. Shacklett examines the top HR tools to determine which option may be best for your organization.

When human resources management software providers develop their products, they aim for a best-of-breed solution that still meets the majority of their clients' needs. The rest of the job is up to you, the prospective client, to determine how well a given HR toolset meets your requirements. Now that you know what you need, what are your options?

Here we examine seven of the leading HR tools from vendors including IBM Kenexa, Oracle, Workday, SAP, Cornerstone, ADP and Ultimate Software, and offer guidelines to help you determine which products might be best for your company.

Core HR tools

Most vendors offer core HR tools such as payroll, benefits, compensation, and time and attendance. However, for companies with specialized needs, such as compliance monitoring or a global payroll option, Ultimate Software UltiPro, ADP and Oracle HCM offer global payroll software that supports the payroll and compliance requirements of employees in many different countries outside of the U.S.

Talent management software

If your company is small to medium-sized and wants to add talent management software, you have several options.

The best fit is software as a service (SaaS) talent management from vendors such as Cornerstone, IBM and SAP. These vendors provide the software as well as on-staff expertise to help you get your talent management system up and running. With a cloud-based system, the SaaS vendor is also responsible for taking care of most of your IT needs, which reduces work for corporate IT.

If your company would like to start small by adding one software module at a time, both Cornerstone OnDemand and SAP SuccessFactors give you the flexibility of starting with one software module and then adding other modules as you expand. IBM Kenexa also offers flexible packaging options for its software based on your needs, but doesn't offer its software on a single module basis.

If your HR goal is internal development of employee talent through training, IBM Kenexa offers comprehensive internal training software. Cornerstone OnDemand, IBM Kenexa and SAP SuccessFactors all offer end-to-end talent management that begins with recruitment and extends into the entire employee development and performance management process.

For large enterprises that have existing systems and have substantial custom code and business processes built around that system that they don't want to lose, there are several options.

Software compatibility and integration with the existing on-premises software are major concerns. From a software integration standpoint, the easiest way to obtain the additional talent management software is to first check with the vendor of the on-premises system to see if it offers talent management.

However, you should also interview other talent management software vendors to see if their offerings are a better fit. If a vendor other than the vendor of the on-premises system has the best talent management software, your company should consider moving to a cloud-based offering for the new functionality and integrating this new software with the existing on-premises system through a standard API that links the on-premises software with the cloud. SAP offers both on-premises and cloud-based talent management software. Oracle, which has an established on-premises core HR software base, offers its talent management software in the cloud.

These talent management tools expand upon the existing core HR tools, which makes them logical first places to look if an enterprise already has on-premises software. Other HR software providers that offer a full complement of talent management software include ADP, IBM Kenexa, Cornerstone OnDemand, Ultimate Software and Workday.

The move to pay for performance

If your company's existing compensation module doesn't have the flexibility to administer a variable compensation system (aka pay for performance), the most straightforward approach from a purely economic standpoint is to obtain a variable compensation software module through a cloud-based HCM vendor that offers its software on a per-module basis, such as Cornerstone OnDemand or SAP SuccessFactors.

The complicating factor in doing this is that the new compensation software module must also work with your company's existing HR software, since the variable compensation module in the cloud must be integrated with your existing HR subsystems such as performance management, which contains data on performance that shows which employees are top performers deserving of better bonuses and higher salary increases.

As a result, integrating a standalone cloud-based compensation module with your company's existing on-premises systems can require extra development time of custom interfaces between the new and existing software so they can readily pass data to each other. Even if your company uses cloud-based HR software, there's still risk when you try to integrate a standalone variable compensation module.

If your existing HR cloud vendor and the variable compensation module cloud vendor aren't the same, the two different vendors may not have a cooperative agreement for integrating their two products. In this case, you risk a lack of vendor cooperation that could cause your project to stall, because the non-cooperative vendor that perceives it could lose business will give your project very low priority.

Nevertheless, if you can find an easy way to integrate a standalone variable compensation module with your existing HR software, the savings can benefit your company, since you only have to purchase or subscribe to a single module of software.

If the integration for a standalone variable compensation module proves to be too risky, it might be time for your company to consider moving to another HR software suite that more closely aligns with your company's future HR needs. An end-to-end HCM suite that's cloud-based should be considered in this situation. Both Workday and Ultimate Software provide cloud-based HR software that includes a feature-rich compensation module that enables you to selectively design appropriate pay-for-performance metrics and rewards systems for different areas of the company based on work objectives.

Maximizing the potential of your mobile workforce

With employees out in the field and seldom in their offices, it's easy for projects to get off track when communications are missed or late. If your company wants to engage its employees with headquarters and with each other; offer online training, instant messaging and project collaboration; and enable employees using mobile devices to change their HR benefits elections or seek HR information 24/7, your company could benefit from an employee engagement system.

Almost every HR software vendor offers mobile apps and employee engagement, but some offerings are more full-featured than others. For example, ease of use is a critical requirement, since these apps will be used in the field. Also, mobile security (and compatibility with your IT security governances and security standards) is important. The HR tool should also support the mobile devices your employees use. Minimally, this means support of iPhone, Android, BlackBerry -- and all tablets that are compatible with these mobile platforms.

Finally, most social engagement software comes with standard APIs that enable it to pass and receive data from your existing HR systems. IBM Kenexa actively engages employees across the company in communications and collaboration, and also features real-time learning and knowledge sharing on the go. Another option is Cornerstone OnDemand, which features video learning on any mobile device.

Software the addresses employees' lifestyle as well as work needs

Today's employees value work, but they also want opportunities to make a difference in the lives of others. An emerging area in HR software is employee work-life products that can assess an employee's interests and skills and match them to corporate volunteer initiatives and projects. Oracle HCM, for example, addresses this with its My Volunteering module.

Running a bare-bones payroll system

For small companies with limited IT staff that want to keep administrative HR work to a minimum, a cloud-based, SaaS payroll software and outsourcing might work best. One example of an HR outsource provider is ADP, which handles administering payroll as well as a service-level agreement (SLA) that guarantees rapid response on issues (and software) resolution, a dedicated account representative, additional HR on-staff expertise that can be consulted with on an as-needed basis for HR issues, and a minimum of at least quarterly meetings between the vendor and the company on payroll/HR status and issues. ADP also offers a full suite of HR software, should you choose to expand the HR software you use beyond payroll later, such as adding time and attendance or performance management.

Handling HR for corporate acquisitions

For companies that are expanding through corporate acquisitions, it's imperative to get IT and HR requirements for the newly acquired companies onto their systems as quickly as possible. If your company has a highly customized, internal HR system, chances are that system is already integrated through custom-coded interfaces with other internal systems such as ERP. This makes it difficult to develop new custom code to integrate the HR of every new organization your company acquires. The task is further complicated when each newly acquired company is running an HR system from a different HR software vendor.

The best approach in this case is to check if the vendor of the enterprise's on-premises system offers a cloud-based version of its system. If it does (and most likely it will), the enterprise can quickly onboard its acquired companies (and their employees) to the cloud-based version of the HR software so they can at least get accustomed and trained on the generic version of the system the enterprise is using internally.

Over time, the enterprise can decide whether to migrate (and integrate) each acquired company over to its on-premises HR system, or to keep these acquired companies running on the cloud-based HR system.

In some cases, the decision may even be to ultimately migrate the enterprise itself to cloud-based HR. The on-premises HR software that enterprises are most likely to have is SAP or Oracle. SAP has a cloud-based version of its software that's headlined by SuccessFactors Talent Management, while Oracle HCM is a cloud-based HR suite that contains SaaS talent management software acquired with Taleo. Both of these cloud-based offerings provide an easy way to integrate newly acquired companies.

Finding the right HR tool for your company

In today's marketplace, there are more flavors and delivery models for HR software than ever before. This makes it easier for companies to find the right fit for their needs, but they can only do this if they have a clear understanding of their HR business cases and what they want to achieve now and in the future. Vendors know this, too. They will put forth their best efforts to show how they can help and provide opportunities for your company to try the software first. The important thing to remember is that you're in the driver's seat when it comes to the decision-making process.

Next Steps

Know which questions to ask before implementing human resource management software

Six savvy steps to take advantage of social media for recruitment, training and performance management

This was last published in April 2015

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Which HR tools best fit your company's needs?
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Based on my experience, it is better to opt for a SaaS based solution, where maintenance charges and efforts are minimal and these are hassle free to handle. We use SutiHR software which is a cloud based HCM solution.
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