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5 signs you’ve outgrown your HR software

By 20/02/2018November 16th, 2022Analytics, HR Software, Software

As your business grows, processes and systems will need to evolve in order for your organisation to scale effectively. With people being one of the most important factors that enable growth, the HR processes that support your workforce will need to become more structured as you get bigger.

The tools that support your HR processes will need to adapt or be replaced to keep pace with the changing shape of your organisation. It is very common for HR professionals to become frustrated with their HR software if it can’t adapt – yet many struggle on regardless. This can ultimately create increased company-wide risks, such as mistakes resulting in non-compliance or ineffective hiring leading to stifled growth.

If you feel your business may be outgrowing your HR software, acting swiftly will avoid some of the issues you faced prior to implementing your current system, especially the need for manual administration. You don’t want to return to this burdensome place, particularly as you’ll be supporting a larger organisation. It’s also likely your software will need to be more sophisticated to cope with a more complex organisation.

When a business is expanding, how the HR team itself will cope is often an afterthought. For a while, the department may be able to manage. But it’s a simple equation – as the workforce gets bigger, so too does the HR department’s workload. Eventually, new HR processes will be required and existing ones will need to become more efficient.

Often growth can take the business leaders by surprise, particularly when acquisitions are involved. You are running steadily with 50 employees, then suddenly you have 150. The business looks and feels very different, yet the HR function is broadly the same.

If your business has a headcount of 50, 150 or more, and is stuck using the same HR tools it’s been using for years, it’s likely that your HR software is no longer fit for purpose. But if you want to know for sure, then this post highlights the most common signs that you’ve outgrown your HR technology.

1) Limited functionality

As the HR leader, your main focus should be people, not software. Old-fashioned tools, such as Excel spreadsheets or outdated systems, require significant manual data entry and offer limited functionality. The result is you get bogged down with manual administration, preventing you from working on the strategic initiatives that will really benefit your business.

Improved HR software would enable you to overcome this, firstly with employee and manager self-service, allowing you to devolve responsibility for routine transactions. Aside from saving time, this improves data accuracy, adherence to policies and can increase employee engagement.

In recent years software has evolved to the point where much of the functionality needed to support HR can be found in a single system. Just a few years ago, businesses tended to buy multiple, disparate solutions for different purposes. However, HR interventions spanning the whole employee lifecycle can now be met through a single piece of HR software, with workflows and automation. Not only do you get all the functionality you need in one place, you have all your data, notifications and approvals there too.

2) Poor or no risk management

As your business expands, so do the risks. HR issues are heavily regulated and there is a constant stream of new compliance requirements. A good example being the EU’s upcoming General Data Protection Regulation (GDPR) which, amongst other things, puts new constraints on how you manage employee data.

Security is also a growing concern, especially with cyber attacks on the rise – you simply cannot afford for confidential employee details to leave your organisation.

Compliance and security will be more important than ever in the era of GDPR. Are you confident your current HR system is up to scratch? Specifically, do you know exactly where all your employee’s personal data is stored and how it is used? Are you confident in your information security?

If you are unsure about the answers to these questions, it may be time to look at your software.

3) No support to maximise your HR tools

Many HR software vendors simply sell you their software and leave you to it, without offering ongoing support or training. This can leave you with nowhere to turn when you want to get more from your software or have processes you want to implement but aren’t sure how the software can support them.

Today, your software vendor should be willing to work in partnership with you, without sending in a huge consultancy bill. Without this flexibility, you can easily get stuck with a system you can’t leverage fully unless you spend a lot more money.

4) Unable to tailor the solution to your business

Most businesses want to use HR software to support key HR initiatives, such as addressing absenteeism. So, you need some level of adaptability to tailor your software to your business. Outdated systems make this difficult, often requiring heavy manual input to customise the simplest of processes.

Modern cloud solutions can be customised without requiring expensive consultants to spend weeks onsite, while automated workflows are easily modified to suit your needs. Meanwhile, employee engagement can be measured through inbuilt functions such as surveys.

If you are unable to utilise your software to support key HR initiatives, by looking at other options you’ll be able to see how technology has progressed.

5) Limited reporting and analytics

HR analytics is becoming increasingly advanced, and more and more organisations want this capability. But old-fashioned systems, particularly where data is stored in multiple software packages or spreadsheets, can make even the simplest reporting task difficult. Meanwhile, to do effective HR analytics, you need to be able to analyse trends in your data over time. This means that your HR software package needs to store historical data when updates are made. Many old-fashioned software packages don’t do this. Instead, they often just change data entries to the most recent information entered – erasing evidence of how the data has altered.

With modern HR software, reporting and analytics is now a possibility for smaller companies. By having your employee data in a single system, reliable reporting on basic key performance indicators (KPIs) becomes much more straightforward. And this really should be in place before you even consider more advanced analytics. Today’s leading tools typically provide built-in analytics functionality too, including the ability to store data histories. Modern software will also store the reasons for changes where this is appropriate, such as reasons for salary increases. This ensures that company leaders always have access to the best information possible on all HR matters.

If you are still struggling to get together an accurate headcount report, your life would be made much easier with the right tools and automated processes.

In summary

If the signs are there that your current HR software is no longer fit for purpose, then you already know this needs to be addressed. Many HR leaders face challenges in securing buy-in from leadership to invest in new software – but you’ll be hurting the business, not just your own department if you continue as you are.

Outdated systems increase the risk of non-compliance, impact productivity and can even slow the growth of your company. Modern HR software can put you in more control and free up the HR function to focus on the bigger initiatives. The pain of making the change is likely to be far less than staying as you are.