Core human resource (HR) software, also referred to as human capital management (HCM) software, stores employee information within a central system of record. Core HR systems are used to manage employee information, such as payroll and benefits data, within an easily accessible, centralized HR database. These HR technology systems have long been marketed as human resource information systems (HRIS) or human resource management systems (HRMS) but have recently been replaced by the popular term, HCM.
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What is Core HR Software?
Core HR software provides human resource administrators with a centralized system of record with which they can maintain, track, and update employee records. Data contained within these systems can originate from a variety of HR functions and be input manually or automatically through integrations with other HR software such as payroll, benefits administration, performance management, onboarding, or compensation management systems.
Core HR software provides a broad range of HR-related functionality. As businesses grow, the demand for their HR departments grows with them, and the many responsibilities of HR teams become difficult to handle without the help of a software solution. Because the role of an HR team is one with a lot of range, it often makes sense to have one tool which can handle many of the functions necessary rather than one tool for each function of an HR team.
HR departments and personnel manage benefits administration, recruiting, workforce management, time tracking, and more. Core HR software provides functionality for all of these solutions or offers integrations to pertinent software. The ability to manage tasks relating to all of these business areas within one tool is crucial for boosting the efficiency of an HR team.
Another significant component of human resource management is the preparation of reports examining workforce trends such as benefits usage, turnover, retention, and employee performance. These reports facilitate the analysis of employee data and help shape HR policies. Reporting tools built into core HR systems can streamline this process by using stored employee records to automate report generation.
Although not intrinsic to all core HR products, these built-in reporting tools or integrations with third-party applications help HR departments analyze workforce trends and gauge organizational key performance indicators (KPIs). These reporting capabilities simplify the delivery of actionable human resource insights to key stakeholders.
The depth and complexity of reports made with core HR systems are dependent on the amount of employee data present. Integrating a core HR solution with other HR systems increases the amount of information available for reports. Core HR systems that are not integrated with other applications only offer information on employee headcount, demographics, and longevity with the company. Organizations with a fully integrated core HR system can analyze employee retention, onboarding efficacy, payroll trends, performance levels, and compensation structures. Administrators can then track how these factors affect corporate budgets and federal and state regulations compliance.
Some core HR products also allow employees to generate personalized reports through their self-service portal. These reports can include information in the form of historical pay stubs, PTO balances, benefits usage, performance goals, and training progress. These can be used as periodic reference points for employees to use as benchmarks for their performance. For more advanced reporting capabilities, industry professionals often look to HR analytics software that operates on top of the core HR system and provides more robust analytics.
Key Benefits of Core HR Software
- More effectively standardize and process payroll, compensation packages, and benefits plans
- Automate and track recruiting, onboarding, and employee performance
- Centralize company employment information, PTO, and other information relevant to employees
- Generate and automate reporting of HR data trends
- Reduce effort spent by HR administrators on individual employee selections
Why Use Core HR Software?
When a business starts out and only has a handful of employees, the notion of spending money on HR software seems farfetched. However, as a business grows, human resources management becomes a crucial part of a business’s success. Today, there are more core HR software offerings than ever, and modern, cloud-based systems are available at a much more affordable price than the traditional, on-premises behemoths of days past.
The maintenance of employee information is an important component of human resource management that, if managed poorly, can occupy a disproportionate amount of administrators’ time. To ease this process, core HR software offers multiple features that help administrators retain and organize workforce data. Additionally, core HR products include self-service capabilities that enable employees as end users to access and edit the information stored in the system.
HR professionals use core HR systems to store and update employee information when necessary, such as in the case of employee promotions or significant life events. Employee records are typically created when an individual is first hired and can extend beyond retirement. Relevant information normally included in a standard core HR system includes employee demographics, contact information, and position details. Many core HR products also allow HR administrators to store onboarding paperwork within the system for centralized accessibility. HR departments can extend the functionality of their core HR system by integrating it with other HR applications such as corporate LMS and workforce management software.
Employee access — Core HR software also often enables employees to view their personal information, making it easier for them to change things like benefit elections. This is a huge benefit for employees, as they are not left asking questions about things like payroll or benefits. It also helps save time for the HR professional, since they do not have to manually look up information or make changes for employees.
Compliance — Core HR software can be incredibly helpful for an HR department when it comes to record-keeping and compliance. HR regulations are constantly changing, be it health care reform, tax codes, or labor laws. Core HR software can help the person in charge of HR stay on top of these changes, as well as manage employee data so that any necessary changes can be made easily.
Implementation — Since these software products are becoming more accessible and affordable, organizations are rightly turning to them sooner. Depending on the complexity of the tool, implementation is possible to be done in-house in a relatively quick timeframe. This wasn’t always the case in the past. Businesses often required consultants to come in and configure the tool for the business. Now that this isn’t the norm, it’s wise for small and growing businesses to consider a core HR tool.
Who Uses Core HR Software?
HR departments, personnel, and team members of everything from small businesses to enterprise-sized companies use core HR software to maintain accurate employee records.
Small businesses — Small businesses often have one person dedicated to taking care of all HR-related duties, and sometimes that is just a portion of this person’s job function. As a business grows, this can become overwhelming for someone, especially without the aid of a core HR tool. If an HR department doesn’t grow at the same pace as its business’ workforce, either via tools or manpower, errors and disorganization are likely to follow.
Kinds of Core HR Software
Core HR helps HR departments and personnel manage basic HR processes. This HR technology might provide the following HR solutions:
People management — Core HR software helps HR departments and personnel manage employee records.
Workforce management — Core HR technology maintains all HR administrative data and can be used to manage employee rostering, time and attendance, and scheduling.
Payroll — Core HR technology can integrate payroll features to streamline accurate payroll reporting and compliance.
Core HR Software Features
Organization management — Core HR software arranges employees in an organizational structure that can be used throughout the application for reporting, permissions, etc.
Self-service portal — Self-service portals offered by core HR products allow employees to reference and update their information without relying on HR administrators for assistance. Information, such as available paid time off (PTO), payroll details, and onboarding and training materials, are all accessible to employees through core HR self-service options. HR administrators can often customize permission levels for different HR information within the core HR system, preventing employees from accessing private information through their portal.
Time, attendance, and PTO — Core HR often includes features that track time, attendance, paid time off, sick time, scheduling, and more.
Salary structures — Core HR provides functions that manage position descriptions and pay grades/structures for each role.
Expense management — Core HR features might include functionality for employees to submit expense reports and track reimbursements.
Compliance — This solution helps protect risk areas by ensuring compliance standards are met through tracking and reporting.
Benefits administration — Core HR enables employees to manage their benefit plans by viewing them and making changes during open enrollment and for life event changes. Employers can report and manage payroll deductions based on selected plan options.
Customization — Core HR software lets administrators customize to accommodate their unique processes. This feature includes the ability to create custom objects, fields, rules, calculations, and views.
Application programming interface (API) integration — APIs specify how the application communicates with other software. APIs typically enable the integration of data, logic, objects, etc., with other software applications.
Internationalization — Enables users to view and transact business with the same content in multiple languages and currencies.
User, role, and access management — The ability to grant access to select data, features, objects, etc., based on the users, user roles, and groups.
Reporting — Enables reporting of all data contained within the system. It typically contains standard reports as well as the ability to create ad-hoc reports.
Dashboards — An easy-to-read, often single-page, the real-time user interface shows a graphical presentation of the current status and historical trends of an organization’s key performance indicators (KPIs) to enable instantaneous and informed decisions to be made at a glance.
Software and Services Related to Core HR Software
HR management suites — Core HR software and HR management suites provide similar functionality but differ in the way they can be purchased. HR management suite providers offer a series of modules that can be purchased separately, whereas core HR products are not necessarily offered a la carte.
Payroll software — Some core HR products will even have the functionality to support cerspecificnance and accounting tasks. Payroll, for example, is something that, depending on the size of your business, may be handled by the same person that handles HR. In this case, it can be useful to have a tool with payroll functionalities. Even if the same person isn’t handling both of these duties, it can still be beneficial to purchase a product that combines these functionalities. A payroll team needs access to employee data, which is managed by HR, so it is reasonable to want all of these tasks within one system.
Workforce management — Core HR products provide the ability to take care of many HR-related tasks in one place, so there’s no need for a user to navigate from tool to tool for each task. Other HR-specific categories, like workforce management, won’t provide the breadth of functionality but may provide more functionality for forecasting labor demands and developing workforce contingency plans, for example.
Benefits administration — Core HR products offer a centralized platform to complete many HR-related needs. For more in-depth benefits features, HR departments can employ benefits administration software to manage all benefits for their employees.
Performance management — Core HR products provide integrations to performance management solutions to help HR personnel and managers establish performance standards and evaluate performance while maintaining a single system of record.
Training eLearning — Core HR products provide integrations with training eLearning software, including corporate LMS software, to organize, track, and manage employee training efforts while maintaining training initiatives all in one place of record.