A human resource management system (HRMS) is comprehensive software that integrates core and strategic HR functions into one solution. It typically features an employee self-service portal and a centralized database. It also automates administrative processes, streamlines recruiting and reduces turnover.

The global HRMS market is expected to grow to $30 billion
by 2025

Source: Grand View Research

54% of companies are increasing their spending on HR Technology

Source: HR Technology Market 2019

Small businesses experienced a 28% of companies plan to replace their HRMS solution within the bext 12 months

Source: HR Technology Market 2019

HRMS Buyer's Guide

What is HRMS?

A human resource management system (HRMS) is comprehensive software that integrates core and strategic HR functions into one solution. It typically features an employee self-service portal and a centralized database. It also automates administrative processes, streamlines recruiting and reduces turnover.

Typical HRMS Modules

Although a single HRMS solution probably won't include every HR function, here are the typical modules found in many platforms:

Applicant tracking

An applicant tracking system (ATS) helps recruiters, HR and hiring managers track and manage candidate information and the interview process. Companies can create career portals and post positions to job boards and social networking sites.

Learning Management

A learning management system (LMS) provides training and e-learning programs. Employees can access manuals, classes and even educational games. Managers can assess employee training for completion and compliance purposes.

Payroll

Payroll software helps administrators maintain accurate payroll records. It calculates and tracks employee wages/salaries and deductions. Administrators can also print checks or manage direct deposits.

Talent Management

A talent management system module tracks employee performance using competency guides, goal-setting and reviews. The module can also help HR managers plan for talent succession and talent gaps.

Benefits

The benefits module helps administrators track employee benefits, such as insurance, 401(k), vacation/sick time and FMLA. It also records employee information to help companies comply with insurance, tax audits and other regulations.

Onboarding

The onboarding module helps HR handle paperwork and other tasks related to new hires. Forms can be completed with e-signatures. It can also introduce employees to company policies, team members and upcoming projects.

Reporting and analytics

The reporting and analytics module helps HR and executives use real-time employee and performance data to make business and workforce decisions. The module also includes reporting tools, such as standard and customized reporting templates, to help with compliance.

Time and attendance

Time and attendance, or time clock, software tracks employee attendance and hours. Employees can clock in and out using timecards, passcodes, physical devices, mobile devices or biometric devices.

Common HRMS Features

HRMS solutions commonly have the following features:

Self-service portals

Self-service portals allow employees to track and update their info without having to contact HR, including addresses, emergency contacts, direct deposit accounts, W-4s, vacation/sick time, insurance, 401(k)s and performance reviews. Employees can also request time off.

Mobile access

Mobile access is becoming common with HRMS solutions. Depending on the vendor, the solution may be available as an app or accessible through a web browser on tablets and smartphones. Employees can use mobile functionality to access the self-service portal and clock in and out.

Employee database

HRMS systems typically store info in a centralized employee database with uniform records that can be accessed across the organization, no matter the location. Administrators can limit access to sensitive info by user or department.

Social collaboration

Social collaboration is a newer feature in HRMS solutions. It includes job posting to social networking sites, training programs via networking media and social intranets.

Document management

Some vendors offer document management functionality, which stores employee handbooks, company memos and other documents.

HRIS vs. HCM vs. HRMS: What's the Difference?

HRIS, HCM and HRMS are acronyms used for comprehensive HR software. It's easy to get them confused because these terms are used inconsistently and interchangeably.

Although you should always check which individual modules are included in a comprehensive HR software, here's some guidance on these ambiguous terms might be used:

small and medium businesses
HRISHRMSHCM
Applicant tracking
Self-Service portal
Central database
Analytics
Training
Compensation & benefits
Onboarding 
Talent Management 
Payroll  
Time & attendance  
Performance tracking  

Top Benefits of HRMS

Using an HRMS system has the following benefits

Streamline hiring

HRMS software has applicant tracking functionality that streamlines the hiring process using resume analytics, progress dashboards and communication tools. Companies can create a branded, professional career portal on their website. An HRMS solution can transfer applicant information to the employee database after they're hired.

Onboard more efficiently

It's important to keep employees engaged from the start. With an HRMS solution, they can sign administrative documents electronically, catch up on company news and business goals, and join virtual social networks of colleagues. On their first day, they'll have more time to tour the facility, set up their equipment and hit the ground running.

Increase employee engagement

HRMS solutions boost engagement through continuing education. Hiring speakers or holding physical classes can be expensive. HRMS offers a cost-effective alternative with e-learning modules to help employees improve their skills and performance at their own pace. This type of professional development not only promotes employee engagement, but also prepares future leaders within the company who might otherwise leave.

Reduce data entry and HR questions

Employees often have specific questions about their salaries, benefits and time off. Answering them, however, can take up a huge chunk of your HR manager's day. With a self-service portal, employees can view and update their information any time, anywhere. This reduces data entry and administrative tasks for the HR department.

Automate payroll and compliance processes

An HRMS automates payroll processes and compliance records, reducing costly errors. It calculates wages and salaries, deducts the correct amount of taxes and benefits, prints checks and executes direct deposits. It can also schedule reminders when compliance forms are due, require employees to digitally accept communications and deliver compliance training.

Improve employee feedback and performance

HRMS solutions empower employees to take their performance into their own hands. With the performance management module, employees can monitor their progress, make improvements between scheduled reviews and develop their future goals. Managers can give more relevant feedback, recognize achievements, and plan future assignments and talent succession.

Understand employee turnover

HRMS solutions can communicate with employees even after they leave a company. Because they've had time to understand their reasons for leaving and now have the space to be direct, their insight can be valuable. This information can be combined with other metrics collected by the software, such as demographics, performance, promotion wait time and compensation ratio, to create a clearer picture of employee turnover.

Support data-driven strategies

An HRMS not only records information, but it can also generate reports and analyze real-time key performance indicators, such as time-in-position or time-to-achieve goals. This data can help you develop evidence-based strategies that are more likely to get buy-in from senior management. Some solutions even offer predictive analytics that can give you more certainty in your workforce decisions and insights for future recruitment and retention strategies.

Types of HRMS DEPLOYMENT

HRMS is deployed in three different ways:

Cloud

Software and data are hosted on a remote third-party server. Under a software-as-a-service (SaaS) model, companies pay a subscription fee to access the software through the internet. Vendors are responsible for software maintenance and updates. The data server provider manages the hardware and ensures data security and backup. Because of their low up-front costs, more intuitive interfaces and best-of-breed capabilities, cloud HRMS solutions are often deployed by small and medium-sized businesses.

On-Premise

The software is installed and customized on the company's own hardware and servers. The company typically pays a one-time license fee to purchase the software and is responsible for the maintenance, security and backup of the software and data.

Many large, multinational companies already use on-premise HRMS solutions that they purchased and installed years ago before cloud deployments became more common.

Hosted

Hosted deployment is similar to on-premise. The main difference is that the company pays a monthly fee to keep data servers at a third-party data center. The data center is responsible for staffing, bandwidth and support of the servers. Hosted deployments are increasingly rare.

HRMS Pricing

HRMS solutions vary widely in not only price, but how they charge customers. We'll review the common pricing plans to help you better understand your options.

Per employee, per month

In this model, you pay a monthly fee for each employee at your company, whether they use the software or not. There may be additional fees for implementation, but overall expenses are based on how many employees you currently have and intend on hiring in the future. Per employee, per month prices usually range from $1 to $10.

man with checklist and giant pen

Per user, per month

Your company only pays a monthly fee for the administrative users of the software, which typically include HR staff and senior executives. Be aware that if the HRMS solution has an employee self-service portal, all employees with access may be classified as “users.” Per user, per month prices generally range from $5 to $20.

man at desk thinking

One-time payment

This option is more common for on-premise HRMS deployments. A company pays a large initial fee to purchase and install the software. There are often additional fees for support, maintenance and upgrades to the software. One-time payments typically range from $10,000 to $100,000.

man with checklist and giant pen
For more details, check out our comprehensive pricing guide for HRMS solutions.

How to Choose an HRMS

Because HRMS solutions vary widely with their features and pricing, it's important to carefully research your options before committing to one. Here are the steps you should take before choosing an HRMS solution:

1

Identify your company's needs

First, get input from users, which include HR staff, senior management, IT, payroll and employees.

What are the problems with the current HR system? What are the opportunities to streamline routine processes, reduce administrative errors and improve HR metrics like retention and cost-per-hire?

Consider your company's specific operations. Do you have employees in multiple locations or countries? Do you need to schedule shifts and have employees clock in and out of work? Do you hire using external recruiters or your own team?

2

Create a shortlist

Research vendors that best fit your needs. In addition to current requirements, you should also consider implementation and scalability.

Can the HRMS solution be easily integrated with existing systems, and how much support does the vendor offer with deploying the software?

If you plan to grow the company, can the solution handle more users and employees? Does that affect the pricing structure, and will it require upgrades?

Once you've answered these questions, you can put together a shortlist of vendors whose offerings match your needs.

3

Contact vendors

Begin contacting vendors on your shortlist. You'll want to request a demo of the solution to see how it works and if it fits into your company's operations. You might also consider testing the software through a free trial, if the vendor offers it.

It's important to fully understand the vendor's pricing structure, which is based on features, number of users and level of support. Some vendors charge extra for specific modules. Others only offer implementation, support and training at an additional cost. Keep this in mind when asking for a price quote.

4

Conduct due diligence

Once you've completed a demo of the HRMS solution and have a better understanding of price and services, you'll want to get references from a vendor's existing or previous clients.

The vendor will give you the names of clients with good experiences, but ask for companies that have similar needs to yours (e.g., businesses with under 50 employees or companies with employees in multiple locations). When contacting the reference, ask if there have been any issues with the vendor or the solution.

Challenges of HRMS Software

What are the main challenges HRMS software?

Figuring out goals for using the software

Businesses may not be sure what goals they have in mind for using HRMS. Do they want to focus on hiring and retaining talent? Or do they want to track an employee's lifecycle within the company? What do they expect to get out of using the software? It's important for businesses to carefully list their goals for an HRMS prior to selecting a solution.

Resistance from IT, top executives and managers

Getting buy-in not just from users, but IT and executives is important. For example, IT may have concerns about data security if a vendor hosts a solution in the cloud. Or they may not want the responsibility of hosting and maintaining the software on company servers. Also, there may be resistance from managers who are used to handling performance reviews or time-off requests a certain way.

Limited use cases

Some organizations may already have a dedicated payroll solution that works for them, but need an HRMS for talent management. Or they may only require payroll, benefits management, and time & attendance modules, but not anything else. It may be more beneficial for them to purchase dedicated solutions.

Finding a solution with all desired modules

Some HRMS solutions may not offer certain modules. For instance, one solution may include many functions except for learning management and recruiting management. Finding a solution with the exact modules needed can take time.

Issues for companies with locations in multiple countries

Some solutions may not be compliant with the laws for every country, which means companies may need to consider a country-specific solution.

Issues for small businesses

Most HRMS solutions are built for medium-sized businesses or larger. This means the software may have modules and functionality that are unnecessary for small businesses. HRMS solutions may also have corresponding costly price tags, which can be too expensive for companies on tighter budgets. Another possible issue is that HRMS solutions are often designed for larger hierarchical organizations, which may not be easy to use for companies with smaller, less complicated structures.

ADP RUN
VENDOR NAME: ADP
READ REVIEW

GOOD

Four distinct packages so companies only pay for features they need, access to ADP's resources and HR specialists for help on HR best practices, dedicated mobile app.

BAD

Advanced recruiting and learning management features are not offered.

BOTTOM LINE

Cloud-based solution that specifically helps small businesses streamline their payroll and HR tasks.

READ REVIEW
Vantage HCM
VENDOR NAME: ADP
READ REVIEW

GOOD

Integration to ADP Data Cloud for insights into real-time data, organized and comprehensive benefits information for employees, strong talent management features.

BAD

While ADP targets multinational companies, those companies need to be based in the U.S.

BOTTOM LINE

Cloud-based HCM system that helps large, multinational U.S.-based companies automate their HR workflows.

READ REVIEW

GOOD

Error-detection feature that ensures data accuracy, flexible time-collection methods, Intelligent Insights feature that helps companies better manage their employees.

BAD

Doesn't offer training features but integrates to learning management systems.

BOTTOM LINE

HCM solution specifically designed for midsized and large companies, especially organizations with global locations.

READ REVIEW
Ascentis
VENDOR NAME: Ascentis
READ REVIEW

GOOD

A comprehensive HR platform, empowering employees and managers with self-service access.

BAD

Implementation tactics have received criticism.

BOTTOM LINE

HRIS software with online payroll, an applicant tracking system and a robust learning management system.

READ REVIEW
Smart Office
VENDOR NAME: Asure Software
READ REVIEW

GOOD

Workforce analytics module with over 600 reporting templates, unique time-collection methods, integrated platform.

BAD

May be too robust for small businesses.

BOTTOM LINE

An all-in-one solution for core HR tasks.

READ REVIEW
BerniePortal
VENDOR NAME: Bernard Health
READ REVIEW

GOOD

Quick setup, robust features, user-friendly interface, tailored to small businesses.

BAD

Only sold through brokers, some limitations on reporting functionality.

BOTTOM LINE

BerniePortal is simple to use and offers small and medium-sized businesses many HR features all in one program.

READ REVIEW
BizMerlinHR
VENDOR NAME: BizMerlin
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GOOD

Project management functionality, integration with many different applications, social networking-like feed.

BAD

Dedicated payroll and benefits features aren't offered, not intended for large companies.

BOTTOM LINE

Customizable modular solution that helps SMBs hire, manage and retain their employees.

READ REVIEW
CakeHR
VENDOR NAME: HR Bakery Ltd
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GOOD

Ease of signing up and access; "history of changes made" feature for easier tracking of data changes; and one-click reports on employee time off, HR demographics and other metrics.

BAD

It doesn't offer payroll, benefits or learning management features.

BOTTOM LINE

Cloud-based platform where employees can easily track leave balance and request time off.

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iManage
VENDOR NAME: CBS
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GOOD

Paper-free document handling for each stage in an employee's life cycle.

BAD

Many services are tied into the product.

BOTTOM LINE

An HRIS solution with strong payroll functionality and strong client support.

READ REVIEW
CEIPAL Workforce
VENDOR NAME: CEIPAL LLC
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GOOD

Accessibility from both Web and mobile devices, scalable open-source platform, expense and invoicing features.

BAD

Doesn't offer payroll, benefits (aside from time management) or performance management functionality.

BOTTOM LINE

Workforce management solution that helps companies manage employee jobs and attendance, and ensure legal compliance.

READ REVIEW
Dayforce HCM
VENDOR NAME: Ceridian
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GOOD

Cuts down on manual data entry through self-service processes.

BAD

Customer service tend to be slow in solving support issues, reporting module could be easier to use.

BOTTOM LINE

All-in-one cloud based HCM with focus on time and attendance.

READ REVIEW
Criterion HCM
VENDOR NAME: Criterion
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GOOD

Self-service portal can be accessed via mobile apps and supports integration with time-management and biometric devices.

BAD

Criterion HCM doesn't focus on large or enterprise-level customers.

BOTTOM LINE

Cloud-based, all-in-one platform targeting mid-sized companies with extensive modules and features.

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EBS PaySuite
VENDOR NAME: EBS
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GOOD

Built-in workflow that automates many HR tasks, business intelligence functionality, flexibility for all company sizes.

BAD

EBS currently doesn't offer billing engine, tax filing or payroll checking printing services; highly customized system can lead to increased costs and implementation length.

BOTTOM LINE

EBS PaySuite is an integrated human resource solution that helps companies manage the employee lifecycle.

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EPAY HCM
VENDOR NAME: EPAY Systems
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GOOD

Strong workforce management capabilities for hourly workforces, free premium support 24/7, features to help companies comply with ACA regulations, self-service functionality available in both English and Spanish.

BAD

Not intended for small businesses.

BOTTOM LINE

Human capital management solution with a unique focus on medium to large-sized businesses with hourly workforces.

READ REVIEW
Epicor HCM
VENDOR NAME: Epicor
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GOOD

Self-service with comprehensive performance tracking.

BAD

Pricing and the time frame for implementation depends on client needs and is estimated after consultation.

BOTTOM LINE

Talent management solution that integrates with accounting functions for a full few on human capital expenses.

READ REVIEW
High Line
VENDOR NAME: High Line Corp.
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GOOD

Automated processes that improve productivity, integrated business intelligence tool, flexible deployment.

BAD

Not intended for small businesses.

BOTTOM LINE

Configurable HRMS solution for companies with complex business requirements to help them better manage their workforce.

READ REVIEW
Highflyer HR
VENDOR NAME: Highflyer HR
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GOOD

Robust payroll functionality, HR Pro for guidance on best practices, flexible time-collection methods.

BAD

While it's intended for all company sizes, Highflyer HR may be too robust for small businesses.

BOTTOM LINE

Cloud-based midmarket HCM solution that automates time-consuming and critical HR tasks.

READ REVIEW
HR Cloud
VENDOR NAME: HR Cloud
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GOOD

Strong focus on employee engagement and recognition, offboarding functionality, automated workflows.

BAD

Some HR features, such as payroll, are not offered by HR Cloud, but HR Cloud provides integrations to those applications.

BOTTOM LINE

HR Cloud streamlines many HR tasks and helps companies increase their employee engagement.

READ REVIEW
info:HR
VENDOR NAME: HRSS
READ REVIEW

GOOD

Repetitive tasks are automated, employee and manager self-service, short learning curve.

BAD

Payroll and scheduling modules are not provided, however, info:HR does integrate to third-party systems.

BOTTOM LINE

Customizable HRMS solution that helps small-to-medium-sized businesses automate their HR tasks.

READ REVIEW
Core HR
VENDOR NAME: Lanteria
READ REVIEW

GOOD

Complete organizational chart for mapping out employee management processes, integrates with additional modules.

BAD

Not intended for small businesses.

BOTTOM LINE

Highly scalable Microsoft-based HR solution with an additional full product suite for users.

READ REVIEW
Maxwell Health
VENDOR NAME: SCI & Associates
READ REVIEW

GOOD

Ability to manage all benefit plans from one system, accessible via all devices, heavy emphasis on employee self service.

BAD

Doesn't offer other HR functions such as recruiting and performance.

BOTTOM LINE

Cloud-based system that helps companies find and manage the best benefit plans for their employees.

READ REVIEW
Namely
VENDOR NAME: Namely
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GOOD

An easy-to-learn, intuitive interface that automates sending enrollment data to carriers and benefits deductions to payroll.

BAD

Review creation process is long and complicated, which makes it difficult to share information with specific users.

BOTTOM LINE

An end-to-end HRMS with robust features to manage every function related to a HR department.

READ REVIEW
neonHR
VENDOR NAME: neon
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GOOD

Options of purchasing individual modules or entire workforce solution, accessible by managers and employees, helps companies adhere to regulatory and labor compliance.

BAD

Not available as on-premise, doesn't offer learning management feature.

BOTTOM LINE

Workforce management solution with features that help HR professionals do their jobs more efficiently.

READ REVIEW
PeopleSoft HCM
VENDOR NAME: Oracle
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GOOD

Supports many languages and currencies, dedicated self-service tool that includes HR help desk, comprehensive core and strategic HR features.

BAD

Not intended for businesses with less than 500 employees; last software upgrade was in 2013.

BOTTOM LINE

Human capital management solution that accommodates large and enterprise businesses with complex business requirements.

READ REVIEW
OrangeHRM
VENDOR NAME: OrangeHRM
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GOOD

Opensource solution for businesses to use for free.

BAD

When choosing opensource, customer support is limited.

BOTTOM LINE

Affordable all-in-one HR system.

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HRMatrix
VENDOR NAME: Orblogic
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GOOD

Project-management functionality, ability to manage and track employee expense reports, fostering of employee collaboration.

BAD

No payroll functionality offered (only available as third-party integration), does not integrate with time clock devices.

BOTTOM LINE

An online HRMS that does more than just manage day-to-day HR tasks: Companies can also manage their own projects and assets.

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Paylocity
VENDOR NAME: Paylocity
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GOOD

Community feature for users to learn new company updates and interact with co-workers, automated expense reimbursement feature, full-service tax filing.

BAD

Creating reports can be cumbersome, interface is not always user-friendly.

BOTTOM LINE

Unified, cloud-based solution that streamlines important HR processes.

READ REVIEW
People-Trak
VENDOR NAME: Technical Difference
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GOOD

High-level customization for tailoring workflows.

BAD

Lacks talent sourcing with social media integration

BOTTOM LINE

Complete HRIS software suite for small and mid-sized businesses.

READ REVIEW
PeopleGuru HCM
VENDOR NAME: PeopleGuru
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GOOD

Robust self-service functionality that's accessible on mobile devices, social networking tool for increasing employee engagement, over 400 standard reports to help executives better analyze workforce.

BAD

Not suitable for small businesses or enterprise organizations.

BOTTOM LINE

Human Capital Management solution designed to help mid-market organizations successfully manage their employee lifecycles.

READ REVIEW
PeopleStrategy eHCM
VENDOR NAME: PeopleStrategy
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GOOD

Strong focus on employee and manager self service, intuitive user experience accessible from any device, single database so all data is accessible in one location, end-to-end integrated suite.

BAD

LMS and full talent management functionality is not built in (can be obtained through a third-party provider).

BOTTOM LINE

End-to-end HCM suite that helps businesses efficiently manage all HR functions in one system.

READ REVIEW
PurelyHR
VENDOR NAME: Ironflow Technologies
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GOOD

Robust functionality for time off tasks, ease of use, responsive customer support.

BAD

Waiting on fully operational mobile app (planned for 2019).

BOTTOM LINE

An efficient, intuitive leave management solution with added HRMS value from its functional integrations, despite lack of dedicated mobile app.

READ REVIEW

GOOD

Streamlined HR processes, supports global workforce with multiple langauges and currencies, Employee Central Service Center module for ease of employees accessing information and contacting HR.

BAD

Challenging to learn and not always intuitive. Also, users have reported that customer service support tends to be slow.

BOTTOM LINE

Cloud-based all-in-one HR system with a focus on talent management.

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SentricWorkforce
VENDOR NAME: Sentric
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GOOD

HRMS for businesses to choose their select needs.

BAD

Not intended for large companies.

BOTTOM LINE

Service-oriented solution that helps companies manage their HR functions all in one place.

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SilkRoad
VENDOR NAME: SilkRoad
READ REVIEW

GOOD

Accommodates all types of employees from full-time workers to contractors, integration with Microsoft 365 and other apps, video job descriptions in recruiting module.

BAD

Interface is not always intuitive or user-friendly, limited reporting and customization in recruiting module.

BOTTOM LINE

Talent management solution designed to aid employers in personalizing talent journeys from recruiting to succession.

READ REVIEW
StarGarden
VENDOR NAME: StarGarden
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GOOD

Fields focus on job duties and functions rather than individual employees in order to scale information quickly.

BAD

Does not offer payroll services, only the product.

BOTTOM LINE

HRMS with integrated payroll for end-to-end performance tracking.

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SutiHR
VENDOR NAME: SutiSoft, Inc.
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GOOD

End-to-end HR including the self-service portal, ability to track project timelines and resources, eSignature, performance reviews, onboarding and improved productivity due to automating and streamlining processes.

BAD

Shift scheduling, succession and workforce planning, and stock options management features are not available but will be later this year.

BOTTOM LINE

Cloud-based solution with flexible pricing that allows companies to pay only for features they need.

READ REVIEW
SyncHR
VENDOR NAME: SyncHR
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GOOD

Non-linear payroll processing, strong reporting functionality, integration with many applications.

BAD

Not targeted to small businesses.

BOTTOM LINE

Centralized HCM platform designed to help mid-sized companies manage their workers.

READ REVIEW
TreenoHR
VENDOR NAME: Treeno
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GOOD

Can be customized to company's preferences to fit into current workflow.

BAD

TreenoHR isn't offered as an on-premise solution.

BOTTOM LINE

A cloud-based HRIS that uses a dashboard to easily access and manage business information and employee records in one place.

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TriNet
VENDOR NAME: TriNet
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GOOD

Expense management functionality; robust benefits offering; full-service payroll, benefits and HR functions.

BAD

Desktop interface and mobile app aren't always user friendly; knowledge base isn't offered, so users will have to contact support for questions.

BOTTOM LINE

Cloud-based HRMS platform with core and strategic HR features for small to medium-sized businesses.

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Workday HCM
VENDOR NAME: Workday
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GOOD

Companies can assess their workforce by utilizing analytics and Big Data.

BAD

Generating reports may be complicated for some users.

BOTTOM LINE

HCM designed for medium-to-large-sized companies with multiple locations.

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Worklogic HRIS
VENDOR NAME: Worklogic HR
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GOOD

CRM module for sales to track leads and contacts, online time clock, optional discount program for employees.

BAD

Not intended for large businesses, recruiting and LMS features aren't offered.

BOTTOM LINE

Robust HRIS that helps smaller businesses streamline their HR workflows.

READ REVIEW