The year 2020 was full of challenges for German SMEs. But not everything is negative: the impact of the Corona pandemic, for example, has given digitization an enormous boost. For entrepreneurs, however, this means they have some catching up to do when it comes to digital software solutions. Since large parts of the workforce are sitting in home offices, there is a growing need for intelligent, digital software solutions for HR that relieve HR of time-consuming routine and free up resources for HR’s core competencies.
The HR Software 2021 study by SoftSelect located in Hamburg focused on the functions covered by 126 HR solutions. The results impressively show which functionalities are already common in HR solutions today, which trends are emerging and where there is still a need to catch up. The most important insights from the study are summarized below:
A suitable HR software solution for every employer
The study showed that the HR software market is now so broadly positioned that suitable solutions are available for almost any size of company. Around two-thirds of the software products examined are also offered for smaller companies with up to 50 employees, so that SMEs can also find the right solution for them. Larger companies have significantly more choice – 95 percent of the products are aimed at companies with up to 500 employees.
Most solutions can be usedfor a wide range of industries – 93 percent of providers classify their HR software as industry-neutral. Somewhat less well represented are solutions that cover the requirements of specific industries such as the public sector (83 percent) and agriculture (82 percent).
Changes in the type of deployment have also been emerging in recent years. While 81 percent of HR software was still designed as in-house solutions in 2017, SaaS is increasingly gaining ground. Purchasing software via the Internet has caught up from 73 to 80 percent since 2017, pushing in-house solutions into second place at 72 percent. The higher acceptance on the part of HR staff is certainly also responsible for this, because the strict requirements of the DSGVO promote confidence in the security of data transmission. The pure rental model ASP (Application Service Providing) is declining slightly, as is the complete outsourcing of business processes through Business Service Providing (BPO).
The functional scope of HR software: between all-rounder and specialist
The HR software market is divided into all-rounders and specialists. 74 percent of solutions cover personnel administration and an HR/employee portal. Only about half of the solutions offer functions such as payroll accounting, time management or skills management. There are numerous specialized HR software manufacturers on the market that concentrate purely on offering sophisticated solutions for applicant management and recruiting, or offer payroll software that can really map every possible payroll case.
Employers thus have the choice between well interlinked stand-alone solutions or all-round solutions that are supplemented by isolated special software as required. This is especially true if they want to cover more specialized areas, such as fleet management or travel expense management. E-learning solutions are only included in 23 percent of the HR software examined and can mainly be obtained from specialist providers.
The most important facts of the study
The study captures the current state of the software landscape in numerous sub-areas:
Personnel management: Issues usually in the details
Whether personnel statistics, digital personnel files, employee management or applicant management, when it comes to general personnel management, it is worth comparing the range of functions down to the smallest detail. 78 percent of providers state that they have implemented a digital personnel file. However, the module is rarely actually suitable for completely dispensing with paper. Rather, it is intended to facilitate internal collaboration, but without claiming to implement the paperless office.
Employee Self Services: more independence for employees
Employee Self Services enable employees to make changes to their data on their own responsibility. This relieves HR of time-consuming routine tasks and gives employees the feeling that they are in control of the data stored with the employer at all times. In fact, 86 percent of the solutions examined offer employee self-services, which employees can use to edit their master data, record absences or submit vacation requests. Approval processes in particular have a high time-saving potential – if the solutions can be configured individually, even complex approval processes can be accelerated significantly via the systems.
Payroll: It all depends on the requirements
Standards such as headcount statistics, payout lists, gross payroll or retroactive accounting are made possible by almost every HR payroll software.
Issues occur essentially in the details, especially if it comes to payroll accounting for special wage types such as home worker wages (68 percent) or the requirements of specific industries such as the public sector or construction wages (48 percent). Those with special requirements should examine the scope of functions even more closely. In doing so, they should also take into account future payroll scenarios that could arise, for example, as a result of company expansion or short-time working.
Personnel controlling: reliable forecasting of future data
Personnel controlling offers companies a tool for not only looking at current personnel and cost planning data, but also forecasting future developments. 90 percent of the solutions that include a personnel controlling module cover the important plan/actual comparisons and can process quantitative personnel key figures. Still, four out of five solutions offer headcount planning, personnel cost planning and the consideration of qualitative personnel key figures.
What is still rather slow, however, is the embedding of personnel controlling in the framework of risk management – not even every second solution covers this area.
Personnel resource planning: distribution of personnel capacities to jobs
Within the framework of workforce management, existing personnel are distributed to vacant positions with the help of software and deployment areas can be distributed sensibly. Not even three out of four software solutions can take into account the wishes or qualifications of employees. Fully automated scheduling, which can save a lot of time in operations, is offered by only 30 percent of the software vendors – nevertheless, at 54 percent, semiautomatic scheduling is represented in every second solution. Modules such as career, succession and further training planning are also standard in only one in two software solutions.
Time management: special functions require special solutions
In the area of personnel time recording, almost all software providers cover the usual functions such as vacation planning, an interface to payroll accounting, or absence and holiday management. The situation becomes more difficult when it comes to more specialized requirements such as visitor management (35 percent) or machine data collection (44 percent).
Applicant management: targeted recruiting with a need to catch up
In the field of applicant management, there are a large number of specialized providers that focus on recruiting. Already 85 percent offer a qualified applicant pool.
Four out of five solutions can track
down suitable candidates via matching. This means that two important steps have already been taken on the path to faster job placements. However, only around two-thirds of recruiting solutions offer a direct interface to job portals and social networks for automated matching of job and applicant profiles. There is also still a lot of catching up to do when it comes to the automated reading of resumes (parsing) and the integration of talent management.
Travel expense management: integrated approval management makes everyday life easier
In terms of travel expense management, most providers are well positioned in terms of their range of functions – which is certainly also due to the large number of special solutions in this area. Particularly practical is the approval management available at 80 percent, which automates the approval of business trips. However, every second software lacks a direct interface to online banking, and the automatic calculation of diets is also only a matter of course in 58 percent of the solutions.
Personnel development: focus on employee appraisals
In the area of personnel development, HR software manufacturers score points with a wide range of functions. In most cases, the focus is on the assessment of employees and associated functions such as target agreements or self-assessments by employees. In addition, there are target/actual competence comparisons and the application and evaluation of further training measures.
E-learning: predominantly special solutions
Generalist HR software often only covers the e-learning block in rudimentary form and rarely goes beyond pure seminar management. The e-learning suites of specialized software providers are even more multifaceted.
In addition to course management, they also support event histories, online booking systems or room and material management.
If employers want to rely on sound e-learning software, they should take a close look at the features. More specialized functions such as audio and video conferencing, an authoring tool, test generators or virtual classrooms are offered by only 30 to 40 percent of the solutions.
rexx Suite: The all-in-one solution for all HR tasks
With rexx Suite, employers gain a broad-based software solution for HR work at all levels. Whether personnel management, talent management or recruiting, the practically implemented functions and sophisticated and interconnected processes make rexx Suite one of the best HR solutions for all industries. At the same time, the software solution is modular and can be adapted to the customer’s individual requirements.
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