Best HR Software for 2023

• HR software helps businesses of all sizes streamline their HR processes, including timekeeping, payroll and performance management.
• HR software solutions are often designed with different business sizes, types and goals in mind, so it is important to shop around to find the right platform for your business.
• HR software can also provide helpful reporting and analytics tools to give businesses a clearer view of their workforce.
• This best picks page is for business owners who need help choosing the right HR software platform for their business.

The best human resources (HR) software can streamline functions such as recruiting, employee onboarding, time and attendance tracking, payroll and benefits administration, employee performance management, and legal compliance. These platforms integrate seamlessly into hiring and operational workflows so that HR management is easy not only for HR leaders but all employees. To help you choose the best HR software for your business, we examined the top HR applications, evaluating each platform on its price, ease of use and valuable features.

HR software often includes a base subscription fee and a per-employee fee. Base prices may range from $25 to $200 per month depending on the service and subscription level, and per-employee fees might range from $5 to $20 per employee per month.

When you’re shopping for HR software, it is important to pay attention to which services are included in the base packages and which require a subscription add-on. Many vendors aim to provide an all-in-one service with their subscriptions, but it is relatively common for services such as payroll to be charged as add-ons.

Many of the vendors on our best picks list do not charge implementation or setup fees, but some HR software vendors do. These can often range from $50 to $200 for standard implementation processes. However, services that provide more personalized support and build processes and policies from the ground up, such as Bamblee, may charge setup fees of $500 to $3,500.

Onboarding

The onboarding process involves more than documentation for a new employee; it’s a powerful way to communicate your company culture and to show your true colors with the benefits, support and compensation you offer your employees. On the administrator’s side, this complex process means getting your newest team members ready with the right paperwork and equipment — for example, setting up software access, company-provided devices, payroll paperwork, benefits enrollment, and other critical operations. HR software tools streamline this process with automated workflows, taking as little as 90 seconds to give each new employee everything they need to succeed and feel comfortable in their new role from the moment they arrive for work on their first day, no matter where that happens to be.

Payroll and Taxes

Another daunting task that demands the highest degree of accuracy is paying your team. Today’s best HR software makes it easy to run accurate payroll for salaried and hourly employees and, more importantly, automatically calculates and files your local, state and federal payroll taxes on your behalf. Many of the best HR software options have even expanded into contractor payment and international payroll. Payroll compliance is not only an essential part of operating a business but also a way to help your business maintain a stellar reputation and attract the best talent.

Benefits Management

Financial and health benefits administration can be a giant headache for new and established HR teams alike. Whether you’re shopping for providers, enrolling new employees, or helping a team member navigate a life-changing event such as the birth of a child, benefits management is another area where you have to satisfy everyone. Most all-in-one HR software platforms have native integrations with thousands of benefits providers, or open APIs that allow you to keep your existing benefits packages but manage the data through your HR dashboard. Whichever case suits your company best, keeping all of your benefits data in one place that’s easy for employees to review will save time and greatly reduce your stress.

Performance Management

HR software can help employers streamline their performance review process and improve communication around performance between reviews. Most solutions offer customizable templates designed to simplify employee reviews. Many of the top HR software solutions also support 360 degree feedback where peers, manager, and subordinates can all be invited to submit feedback. HR software can also be used to view reporting on employee attendance, productivity, and other key performance metrics.

Integrations

Open APIs and marketplace integrations are the easiest ways for small and midsize businesses to tailor HR solutions to their teams. Finding an HR software platform that integrates with various other programs is important to keep your company agile and adaptable. For small companies, the software services you need will likely evolve as your business grows, so it’s important to know that you can mix and match your benefits, accounting systems, payroll solutions and other critical apps to meet the challenges you’re sure to face in the years to come. Most HR solutions designed for small and midsize businesses offer extensive opportunities for integrations, ensuring you always have access to the tailored solution you need.

Here are a few easy ways to narrow your search when you’re sifting through the long list of potential HR software providers for your company.

1. Features

The most important step in shopping for HR software is to identify the features your company needs. Before you can effectively compare service providers and pricing, you have to know which features you want. That means taking a close look at every aspect of your current HR process — onboarding, offboarding and everything in between — to determine what’s working well and what’s not.

While most HR software platforms offer all-in-one packages to handle every task that falls to your human resources department, many platforms are highly customizable, so you can keep your existing health insurance and 401(k) benefits if that’s what you prefer.

2. Budget

Once you’ve decided on features, narrow your search by cost. If you’re looking for an all-in-one provider with standard pricing options, you can easily whittle down the field by eliminating the handful of companies without transparent pricing. On the other hand, if you’re searching for a tailored solution that will allow you to use some of your existing software partners while adding new tools, you can quickly eliminate many of the providers that only offer specific packages with set pricing.

3. Customer Service and Reviews

Once you have your desired features identified and the potential costs relatively even among your remaining options, it’s time to consider the level of support you expect. We’ve combined customer service and reviews into a single consideration because we think they tell the same story. While you always have to take customer reviews with a grain of salt — knowing that you’re most likely seeing the very best and very worst experiences rather than the average customer’s opinion — it’s still valuable to be able to judge a software provider based on its highest and lowest performance.

During the sales process, you’re likely to encounter incredibly friendly and helpful service, but will that positive experience continue a few months down the line? If not, customer reviews are where you’ll find that important piece of information. However, if you have an experienced HR team on staff, you may not run into the same issues other customers are having. If you don’t have access to full-time HR staff, you may want to prioritize access to a customer support manager who is dedicated solely to your company.

4. User Interface

We found all the HR software options that we selected as top picks to be relatively user-friendly, but they all offer a somewhat different user interface and experience. Some HR software vendors offer free trials or limited free plans that allow you to test out the platform for yourself. Many of the ones that don’t offer free trials have some form of interactive product tour, which will still let you explore the user interface. When reviewing each HR software’s user interface and navigability, think about the skill level and average experience of your employees. Certain HR softwares offer a lower learning curve for less tech-savvy teams or those new to HR software.

5. Integrations

Don’t forget about integrations. If there is a communication tool, time tracking program, accounting software, or any other supplemental HR tools that you’d like to use alongside the new software, double-check that they integrate with your top choices. Most of the top HR softwares integrate with the major business software programs like QuickBooks, Google Suite, Asana and Microsoft Office. However, each software has its own integration marketplace and it’s best to make sure before you commit to a specific HR software.

If you’re still managing your HR tasks through an Excel spreadsheet or on paper, then you’re spending too much time in the weeds and opening yourself up to costly mistakes. Today’s HR software platforms use intelligent workflows and easy-to-use automation to take many of the tedious and potentially troublesome tasks — such as filing your local, state and federal payroll taxes — completely out of your hands. In simpler terms, these are the main advantages of using HR software:

• It improves productivity. An all-in-one HR software solution can boost your employees’ productivity by providing a single, centralized platform to complete their tasks.
• It ensures compliance. Keeping all of your data in one place makes it much easier to adhere to evolving HR compliance requirements, with alerts that keep your team on top of critical regulatory tasks.
• It supports your staff. Whether it’s administering financial and health benefits or enabling requests for well-deserved vacations, an intuitive HR software system can support your employees in ways that bring satisfaction to their careers.
• It helps you make informed decisions. Many HR software providers offer performance management with reporting and analytics that provide actionable insights to improve employee satisfaction and performance while reducing turnover, all of which benefit your company’s bottom line and reputation as an employer.
• It saves you money. If you currently handle all of your important HR tasks with a piecemeal solution from various service providers, chances are, you can find a much better price for everything you need by customizing a service through one or just a few providers. Even if you still use more than one service provider, you can often find integrations to bring all of your HR data into one useful dashboard.

The HR software market is always changing and growing as HR software vendors adapt to workforce trends, advancements in technology, and regulatory changes. Below are some of the top HR software trends to watch in 2023.

HR Software Market Growth

The global HR software market is projected to reach a value of $37.4 billion by 2029, according to a projection from Data Bridge Market Research. The research noted that the growth and expansion of HR software into different verticals such as banking, healthcare, retail and other core industries is helping to advance the space. Other factors driving this growth include greater awareness of the benefits of HR software and improvements in the automation capabilities of the software.

Global Payroll and HR Functionality

One new feature that we saw emerge this year is the expansion of globalized payroll functionality within HR software options. Rippling recently introduced its global payroll feature in five countries and has plans to expand to many more by the end of the year. Many of the top HR software options offer limited global payment functionality or only support global contractor payments at present. However, with Rippling leading the charge, we anticipate that more HR software vendors will start introducing global payroll solutions.

Use of AI and Regulatory Restrictions

Another ongoing trend in the HR software space is the use of artificial intelligence (AI). AI can be a powerful tool for recruiting, analytics, candidate and employee communications, and more. An increased emphasis on automation and data analysis in HR software means vendors are finding new ways that AI can serve businesses.

However, governments are cracking down on the use of AI. In April 2023, New York City will enforce a new law that requires any AI tools used in employment decision-making to undergo an independent audit to identify any potential biases in the system. With the increase in AI-driven recruiting tools that produce automated candidate scores or recommendations, this may impact a number of HR software vendors.

The Equal Employment Opportunity Commission (EEOC) also launched an initiative focused on HR technology that uses AI or data algorithms for recruiting and hiring. “Bias in employment arising from the use of algorithms and AI falls squarely within the Commission’s priority to address systemic discrimination,” said EEOC Chair Charlotte A. Burrows. “While the technology may be evolving, anti-discrimination laws still apply.”

Vendor Changes and Emerging Competitors

Lastly, there will be some new vendors entering, re-entering and possibly leaving the HR software market. Freshworks is a software vendor that has been featured in our best email marketing software solutions guide and chosen as one of the best CRM services of 2023. Freshworks previously offered an HR software called Freshteam, a popular HRIS and applicant-tracking solution. However, the company recently paused Freshteam signups for new customers. Freshworks says it is reimagining its employee experience suite of products and will resume sign-ups when that process is complete.

Emerging vendors are also picking up steam, such as UKG, which was created in 2020 through a merger between Kronos and Unlimited Software. UKG also recently acquired Quorbit, a workforce planning software. The service continues to grow in revenue and market share, which makes UKG a top service to watch in the HR technology market.