The Ultimate HR Software Checklist

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Introduction

HR tech has exploded in recent years. New, specialist functionality is constantly being released to cater to niche industries as well as each business function. Competition among vendors is hotting up too.

This is great news for HR teams.

Not only is the perfect set of functionality more likely to be available, the competitive nature of the market means you’re in the driving seat when it comes to negotiating on price.

The only downside with all of this competition is it’s more difficult to make sure you select the best system for your needs. System Shortlist can help to steer you in the right direction by creating an initial shortlist of attractive options. It saves you a lot of time at the outset, but the ultimate decision needs to come from you.

In this guide is split into ten sections and covers checklist of 190 things you should understand about an HR software vendor before signing a contract.

Most of these are questions you should ask the vendor directly, some information is available publicly.

Understanding these areas will help you confirm that the functionality meets your needs, both now and into the future, at a price that suits your budget, and that the vendor is likely to be a strategic partner you can work with for the long-term.

Functionality

Before speaking with any vendors you should be clear on what it is you want to achieve from investing in a new HR system. What information will your system be used to store? What processes (existing or new) will your system be required to follow to reduce the amount of administration in the organisation?

Also, you should have at least a rough idea of the functionality that is essential to you and other stakeholders in your organisation to achieve these outcomes. You can refine the specifics of what functionality is important to you as you become more familiar with what is available from different vendors in the market.

 

Standard functionality

At the early stage of shopping around for an initial shortlist of suitable vendors, it is perfectly fine to have a loose checklist of functional requirements.

Later in your buying journey, you will want to see demonstrations of specific, scenario-based tasks being completed that map to your organisation’s specific processes. You will also want to assess the software, not just on available functionality but ease-of-use for the HR team, line managers and employees.

Below is a list of 80 areas of top-level people-management functionality for you to consider. Treat these as a quick hygiene test to quickly whittle down the entire market to ones that stand a chance of meeting your needs. You should have one-eye on the scalability of the software and your future requirements, however, it’s also important to be realistic with the functionality you say you require. While it’s tempting to say that everything is essential, if you do go down this route, be prepared for some hefty quotes from a small number of vendors. 

Human Resources software functionality
Absence management Accident recording and reporting
Active directory Analytics and reports
Appraisals Asset tracking
Audit trails Background checking
Benefits information Bradford factor calculations
Bulk data uploads Case management
Clocking in / clocking out Communications
CPD management Dashboards
Data exports (in what file formats?) Document storage & management
E-signature Employee details
Employee directory Employee recognition
Expenses Flexible benefits
Future candidate pools GDPR reporting
Gender pay-gap reporting Health and safety records
Job information KPIs
Leaver details Learning management (LMS)
Mail merge Mobile access (which apps / browsers?)
Multiple role management Multilingual (which languages?)
Multi-currency Offboarding
Onboarding Org charting
Outsourced HR advice Performance management
Point-in-time reprting Reminders, alerts and notifications
Read and accept / policy acceptance Rostering, rotas, shifts
Template documents Timesheets
Total reward statements Pay information
Safeguarding Self-service
Skills, qualifications and competencies Succession planning
Surveys Talent management
Two-factor authentication Workflows
Work patterns
Recruitment software functionality
  • Agency access
  • Applicant tracking
  • Candidate communications
  • CV parsing
  • Job boards
  • Mail merge
  • Referral tracking
  • Reporting
  • Social referrals
  • Talent pools
  • Website embedding
  • Workflows
Payroll solutions
  • Bureau and outsourced payroll services
  • E-payslips
  • P11d, P45s, P60s
  • Pensions auto-enrolment
  • RTI
  • Payroll software
    • Is it tested and recognised by the HMRC?
  • Spinal pay points

* For any of the functionality that’s important to you, you should also ask whether any of it is provided by a third party but white-labelled as the vendor’s own solution. You’d be surprised how often this happens.

Configuration & customisation

Most HR systems can be configured to hold information that is unique to your organisation by adding custom fields.  Many RFI’s don’t take this into account and repeat themselves over and over checking whether a system can hold dozens of specific fields. Rest assured, if the HR system can be configured to hold information like an employee’s shirt size, it can also be configured to store their shoe size too. It’s more important to check the broader requirements of the configuration, the types of information that can be stored, and what that information can be used for.

Ask:

  • Which fields are included as standard in the HR system?
  • Can I add custom fields myself?
    • Get the salesperson to show you how to do this.
      • Is there a limit to how many fields you can add?
  • What formats of information can a custom field be used to hold?
    • Text
    • Number
    • Date
    • Time
    • Percentage
    • Monetary value
    • Multiple picklists
    • Dropdown list
    • Auto calculation
    • Tick box
    • True/False/Yes/No
  • If it’s not possible to add new fields yourself, how do you go about getting new ones added? How much will it cost? How long will it take?
  • Are there any areas or modules of functionality where you can’t add custom fields?
  • Can you use custom fields you have added into mail merges or use them to drive workflows?
  • Are there any areas of functionality or modules where information from a custom field can’t be used to drive workflows or calculations?

In addition to the system being customised to store and work with information that’s important to you, you will also want to understand how the system can be configured to allow and restrict access as required.

Common examples include what information should an employee be able to see about themselves, their colleagues in their team, in other teams? What should a line manager be able to see about their direct reports? Should an IT manager be able to view, create and edit certain, limited information for all employees to help track assets?

Before signing a contract with a supplier you should work through detailed, specific examples of how you will need your access to be configured.

Many HR systems enable the look and feel of their software to be customised. This can range from simply adding your organisation’s logo through to changing the colour scheme of the entire system and background images to fully reflect your employer brand. 

Some HR systems also allow the user interface to vary depending on the user’s profile. For example, employees of Tropicana would see the system branded to Tropicana’s look and feel and employees of Doritos would see a system branded to Doritos look and feel, even though both brands are owned by Pepsico.

Ask:

  • What can be customised about the look and feel?
  • Can you show me examples or mock-ups?
  • How can you customise the look and feel?
    • Is this something you can do yourself?
    • If not, is there a cost involved?
  • If it’s a SaaS system, what will the URL be to login? Can it be accessed through our own URL?
  • Can I display different brands to different users?
    • What can I base the different brands on e.g. department, country, business unit, etc?

Usability

This isn’t so much a question to ask of the vendor but one to have locked away in the back of your mind when looking at software demonstrations. If the system isn’t easy and intuitive to use, you’re going to have an uphill battle getting employees to use it. The result; absences aren’t logged, personal details aren’t updated, messages aren’t read and training courses aren’t completed.

And if the information in the system isn’t accurate and up-to-date, then you might as well not have a system. Rubbish in = rubbish out.

 

Roadmap

The right HR system for you has the potential to be an organisational advantage over your competitors. Your employees can be more productive, your organisation more efficient and your C-Suite can make more informed strategic decisions.

So, while you need to select an HR vendor based on their ability to meet your current needs and demands, you’ll also want to understand their ability to grow with you.

Ask:

  • What new functionality has been released in the last 12 months?
  • What new functionality will be released in the next 12 months?
  • How do you develop your roadmap?

 

Integrations

It used to be that most HR professionals wanted to get everything from a single supplier. From a supplier management perspective, this approach is certainly easier. There’s one support team to call so, if there’s ever an issue, you have one supplier to hold accountable rather than multiple suppliers all pointing the finger of blame at each other. There’s also just one contract to get through your legal checks and sign, and one invoice to pay.

However, with the number of highly specialised tools available on the market, you should at least consider a best-of-breed approach to your HR solution where standalone tools and solutions integrate into your HR system as a central source of truth for your people-data.

Beyond integrating people-management solutions you should also consider what tools used throughout your organisation either rely on up-to-date information about your employees or would be able to give you greater insights into your people activity if they did. For example, you could integrate your organisation’s CRM system with your HR system to uncover trends between training activity for your sales team and sales performance on certain product lines. 

Whatever integrations you would like to build with your HR system you should ask:

  • Do you have a live example of this integration?
  • How many customers have an integration between your HR system and whatever the third-party software is?
  • How does the integration work? API? Flat-file?

IT and infrastructure

This area is one for your IT team to get involved in but worth you having a grounding in first. At an early stage, you should speak to your IT team to understand which requirements are fundamental red-lines. It can avoid lots of time spent scoping out a project with a possible supplier, only to find that you’re not able to progress because of a platform or security-related issue.

Ask:

  • Technology platform
    • How is the service delivered? SaaS, on-site?
    • If SaaS, what browsers is it compatible with?
    • Where is the data hosted?
    • For mobile functionality, are there any operating systems that it is not compatible with?
  • Security and business continuity
    • What security accreditations do you hold?
    • What business continuity measures do you have in place?
    • What background checks are carried out into your employees?
    • How many data centres is your software hosted in?
    • How frequently is your data backed up?
    • Do you conduct penetration tests with CREST approved third parties?

Implementation

While some HR systems are simple enough to be implemented entirely by your own, in-house resource, beyond a certain level of sophistication, it becomes necessary to have a professional implementation service provided by the vendor.

The cost and timescales for your implementation will depend on the complexity of your project. This in turn impacts the amount of time spent on the project by consultants of varying seniority and experience. Much of the implementation will be reliant upon you performing certain tasks, for example providing employee data to import into the HR system in the correct format.

You may have a specific and immovable deadline which you need to have rolled-out your new HR system by, for example, if your current supplier has given you a deadline by which they will no longer support your service. If this is the case raise this early in the process to ensure you’re working with a vendor who can achieve this timescale.

Ask:

  • Will the implementation be carried out by the vendor or an external, third-party consultant?
  • Assuming you, the buyer, meet all of your waypoints, what is the expected time to implement the HR system to a basic level e.g. self-service for personal information and absence management?
  • What is the expected timescale to implement the HR system fully?
  • Will the vendor be able to meet a certain deadline (if critical to you)?
  • Can you see an example, anonymised implementation plan?

Support

If you ask a vendor how good their support is, every single one of them will tell you the support they provide is excellent. To help uncover the truth you’re after specifics. Being confident that you will be well supported to get the most out of your purchase after signing the contract is as important as the functionality. Most of the time, when a user has a complaint about a system, it’s not because the functionality doesn’t exist, it’s that they’re not familiar enough with the system to use it to its fullest.

  • How do you communicate with customers? (ask for examples of each)
    • Newsletters?
    • Webinars?
    • Forums?
    • Video guides?
    • Written user guides?
  • What customer events do you host?
  • What SLAs do you have for your support team?
  • How do you monitor the effectiveness of the support you provide e.g. Customer Satisfaction score (CSAT), Net Promoter Score (NPS), etc?
  • Do you provide customers with an account manager?
  • How do you ensure your customers get the most value out of the system?
  • How is the training provided? Online, classroom, client site?
  • Beyond formal training sessions, what access do you provide to other training resources e.g. user guides, videos, etc?
  • How much training is provided during the implementation phase?
  • What happens if our organisation hires a new HR administrator? How do we get them trained on using the system? What is the cost?

Company

Understanding some of the background about a vendor will give you a better idea of the potential long-term viability of that relationship.

  • When were they founded? If founded just a few years ago you may not feel as confident about working with them vs a company that has endured for multiple decades.
  • Are they privately owned or traded on a public stock market? If they’re privately owned how are they funded? It might be that an ambitious entrepreneur has grown the business from scratch without needing outside funding. Alternatively, they may have taken investment from outside sources like venture capital or private equity, if so when did they take that investment? If they have taken outside funding then at some point the investors are going to want to cash-out their investment. This investment cycle is typically in the range of three to five years, at the end of which the investors may reinvest, sell their stake to another investor, sell their stake to another vendor (known as a trade sale) or if they’re large enough, float on a stock exchange. This isn’t necessarily a problem but something you want to be aware of to avoid any sudden surprises.
  • What is the purpose or mission of their company? If you’re not able to get a quick and clear answer this is a flag that company culture is weak. This in turn can have implications for the employee turnover and ultimately the quality of the support you’re likely to receive as a customer.
  • It’s also worth checking the Glassdoor reviews of a vendor, this is often where you will get a real, behind the scenes insight into how well the company is being run and how well they look after their customers.

Understanding the vendor’s customer base will give you a sense of how well suited they are for your needs.

Ask:

  • How many customers do they have?
  • How many customers do they have in your industry?
  • What is the median size of their customers? Are you going to be significantly smaller than most customers that the vendor has? If so, there’s a good chance your voice won’t be listened to quite as attentively when you ask for product developments and issues you raise with support may not be treated with the same priority as others. Equally, are you going to be significantly larger than their typical customer? If so, this might indicate that the vendor’s product doesn’t scale to support organisations like yours as well as some alternatives.

Growth is a useful indicator of how well a vendor’s solution and the underlying business model meet the needs of the market. Be aware that your

Ask:

  • Is their turnover and profit increasing? (Also see financial information section below)?
  • How many customers do they have? Is this number increasing? If it’s decreasing this indicates a serious underlying issue.
  • How many employees do they have? How many did they have last year? If the vendor has doubled their customer base but only added a handful of employees to look after them, future product development and support may suffer.

It’s worth involving your finance team to do a bit of due diligence here. Even if the financial outlay or contractual commitment is low, if the vendor goes bust, you’re at risk of losing employee data, potentially face critical issues with processing payroll, and have to go through another lengthy procurement and implementation process.

 Find out:

  • What is their turnover?
  • Are they profitable?
  • Are they showing signs of growth?
  • How much debt do they have and is it manageable?
  • What is their credit risk?

Pricing

At an early stage, you will want to get a rough sense of the likely costs of a solution. There is no point you and your colleagues sitting through hours of demonstrations for a solution you like the look of only to discover it is WAY out of your price range.

Vendors of sophisticated HR systems are likely to say that they can’t give a price before understanding your needs. This is a result of how the vendor’s sales teams are structured and rewarded. The person on the phone is probably incentivised to book as many sales meetings as possible and doesn’t want to put you off before the sales team has had a chance to “sell the value” of their solution.  By simply explaining that you won’t be able to progress any further without a ballpark upfront and subscription cost based on your organisation size, you’ll quickly get a rough range of costs to set your expectations.

Later in the selection process, you will want a more detailed understanding of the costs you can expect.

Ask:

  • What are the up-front costs
  • Are there any “activation” fees?
  • What will the cost of implementing the system be?
  • What are the up-front training costs?
  • What are future training costs?
  • What are the payment terms? Is it annually in advance, quarterly or monthly?
  • At what point do you start to pay for the software subscription? Is it before, during, or after implementation?
  • Is the price fixed for the duration of the contract or will it increase each year? If it increases, how much will it increase?
  • What are the price bandings above your current headcount?
  • Are there any other costs such as “data storage”? 

 

Summary

Selecting the best HR system for your needs is a serious undertaking and one that you will have to live with for a long time. By being clear on your critical requirements, budget, and needs early on, you can save a lot of time later in the process. The sales teams of every vendor are incentivised to persuade you that theirs is the better solution vs their competitors. The key to really understanding the truth is to ask specific questions and to see specific examples.

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