Choosing the Right HR Software: Should You Prioritize Features or Pricing?

How should I evaluate and choose the right HR software? Product features or pricing?

When evaluating and selecting the appropriate HR software for your organization, it is essential to consider a combination of product features and pricing. Firstly, assess your specific needs and objectives as a company. Determine the key functionalities and features that are crucial for streamlining your HR processes and meeting your business requirements. Once you have identified these requirements, compare different HR software solutions to see which ones offer the most comprehensive features that align with your needs.

In addition to product features, pricing is also a significant factor to consider. While it may be tempting to opt for the cheapest option available, it is essential to strike a balance between cost and value. Evaluate the pricing structures of different HR software vendors, considering not only the initial costs but also any potential long-term expenses such as maintenance, upgrades, and support fees.

Ultimately, the ideal HR software choice will be one that not only meets your functional requirements but also fits within your budget constraints. By carefully weighing both product features and pricing, you can make an informed decision that will benefit your organization in the long run.

Dear Sheetal,

Suppose you have received a quotation from the three vendors, i.e., A, B & C.

Step 1: Identify Useful Features

Identify from your side which features of each software are useful to you. Identify the features that you do not require. Find out what will be the savings per month by using the software. Please note that calculating savings per month is a very important calculation.

Step 2: Request Revised Quotes

Approach each vendor and tell them to requote by (a) removing the unwanted features and (b) adding the features you require but they have not quoted for.

Step 3: Compare Revised Quotes

Now you should have three quotes wherein each quote has the features that you require. More or less, these should be identical except for the price and after-sales service.

Step 4: Choose Based on Break-even Point or TCO

Now you have two options to select the software. One option is to calculate the Break-even Point, or select the software by calculating the Total Cost of Ownership (TCO).

Step 5: Calculate the Break-even Point

a) (Fixed cost for software A)/(Savings by software A in one year) = Break-even for A

b) (Fixed cost for software B)/(Savings by software B in one year) = Break-even for B

c) (Fixed cost for software C)/(Savings by software C in one year) = Break-even for C

You should choose the software that has the least Break-even point.

You can select the software by calculating the TCO also. However, it is difficult to explain the procedure. Please study on your own.

All the best!

Dinesh Divekar

Just wanted to add to what Dinesh Divakar has said. His suggestion is very helpful and valid. I wanted to add that you could also examine the need for CMMI inclusion in the software. That will help in the long run.

Regards,
Ronald

Choosing the right HR software is a challenging task.

As an HR professional, I have experience working with several HR software systems. I believe the best way to identify the right HR software for your organization is to start by evaluating the requirements of the organization and look for applications that have features to fulfill those requirements. Since there are several applications that provide numerous features, it is important to identify the features that your organization can utilize and look for the most feasible options available in the market.

Opt for a trial session before making a final decision. A trial session is essential because even an expensive HR software might not be compatible with the existing applications. In my personal experience, I have been using HROne, which has been a one-stop solution for me. You can consider trying HROne as an option.

Dear Sheetal,

I have a very straightforward answer for your query.

Why do you need HR software?

If I ask you a question, why do you need HR software in the first place? Your answer could be:

1. I am/my company/my employees are facing 1, 2, 3 problems, and I want to solve those problems.
2. I want to minimize effort and save time.
3. I want to maintain accurate data and reports for my management & statutory purposes.

Out of the above, the first point is the most important purpose of the software system. Once you address your pain areas and find a good solution provider (HR Software), then you will be confident of the rest of the points. So, find out the vendors' solutions which solve all/most of your problems and do a shortlist.

The second point is also important because once you get your work done efficiently using the software with minimal effort & time, then you will have a good amount of time to concentrate on other important HR activities.

The third point is the result of the first two points, which enhance your ability to analyze the data for future planning, recruitment, attrition, payroll cost, etc.

So, please consider the above points along with other suggestions made by experts in this thread.

Hope you find this information useful.

Regards,
Jay