Automating processes and migrating them to the cloud has become a trend in HR management just as in other fields. Some companies prefer to build an HR SaaS solution from scratch, but most want a ready solution that fits their basic needs.
At Apriorit, we’ve been providing development services for over 10 years and have a very good grasp of SaaS. Having some SaaS human resources software projects in our portfolio, we decided to create this article in order to share our experience and technical knowledge of developing SaaS solutions with those who want to break into the niche.
The main goal of a Human Resource Management System (HRMS) is to centralize and organize HR efforts. An HRMS saves money and time of HR specialists. HR SaaS solutions not only help with organizing data but also gather statistics, provide analytics, simplify financial operations, and even provide employees with self-service options.
HR systems can be divided into three main types based on their size:
- Core HR systems are focused on the core functionality of workforce management such as attendance tracking, schedules, and payroll.
- Strategic HR systems are focused on talent acquisition and talent management.
- Integrated HR systems are focused on delivering all the necessary features for effective human capital management. These are the largest and most popular type of HR system on the market. Many of these systems present a big set of functional modules and are sold on a modular basis, allowing you to purchase only the modules that you need.
When it comes to the delivery method of HR systems, SaaS is not the only choice, but it is by far the most popular among both vendors and clients. SaaS systems give a number of unique benefits:
- Reasonable pricing
- No need for additional management and maintenance
- Reliable and easy to use
- Fast deployment
- Automatic updates
Therefore, the SaaS delivery model is the obvious choice when it comes to developing and launching a new HRM solution.
From core systems to integrated ones, HRM solutions differ widely in their complexity and functionality. Let’s look at standard modules that you should consider before starting human resources SaaS development:
Payroll. If you want to make an HR SaaS solution, you can’t overlook the importance of payroll. A payroll module automates payment procedures based on working time logs of each individual employee. This module should automatically take into account taxes, vacations, sick leaves, and various deductions. The functionality of this module can be extended to cover all employee transactions. Bonus points for allowing seamless integration with the company's main financial system.
Attendance and performance management. Proper operation of this feature makes the lives of HR managers a lot easier. Evaluation of employee performance is required for calculating bonuses, compensation, and so on. There are several popular methods for evaluating employee performance, from simple integration with Jira to complex solutions for monitoring employee activity.
Benefits administration. This module allows the HR department to manage employee benefits such as insurance and retirement accounts. It allows an HR manager to gather statistics, and process any necessary payments for employee benefits.
Recruiting. This module allows HR managers to maintain recruitment lists, aids in posting job listings across multiple job boards and social networks, and helps with processing applications. Advanced recruiting modules are capable of tracking key applicants. They follow all interactions with an employee, from the first contact till their last day at your company.
Read also: Developing MVP for SaaS Startups
Training. The purpose of this module is to manage employee training. It should track performance and qualification of employees and allow HR managers to create and manage individual development plans. The module should be able to schedule training courses, designate a budget for training, and so on. Implementing an eLearning authoring feature allows your clients to deliver their own educational content within their companies. This is important for organizations with strong in-house training programs.
Management. This important module helps HR specialists in day-to-day management. It can store personal records and track performance, qualifications, and schedule and payroll data of your employees.
Employee engagement. Considering employees’ opinions on anything happening in the company is considered an attribute of a strong corporate culture. This module is important for taking opinion polls, engaging workers in communication using an internal forum, and sharing interesting in-house cases.
Employee self-service. This popular feature allows employees to perform HR-related actions without taking the time of an HR specialist. Employees can request information about their work hours and payments, maintain their schedules.
Scheduling and shift planning. This is a must-have feature for a client whose company works in shifts. An HR manager at a small company may draw up a schedule in a simple Excel spreadsheet. But you need an automated tool to do that in a company with 100+ employees. This module should be tied to attendance and payroll functionalities. You’ll get extra credit if your software automatically informs employees about their work hours.
Analytics. This module allows HR managers to track and process various HR-related statistics, such as employee performance and attendance. This information can be compared to other company data in order to identify trends and potential problems.
By including all of these modules, you’ll be able to create a comprehensive cutting-edge HR system. For a small startup, it’s best to start focusing on a few specific modules catering to particular market segments such as recruitment.
No matter what features you decide to include in your solution, you need to consider the technical aspects. Specific technical requirements for developing a SaaS for HR project will depend on your own business idea and vision for the project. However, there are certain general recommendations that can be given for any HR SaaS project:
Base your design on a solid architecture. Early on, you need to decide on a technology stack and an architecture that’s scalable and capable of supporting the required uptime. You should build your software with these in mind:
- Multitenant architecture
- Porting to mobile platforms or a mobile app
- Implementing an API system
- Ability to customize your software on demand
Define non-functional requirements. SaaS platforms have unique non-functional requirements: for example, they require an infrastructure as a service (IaaS) provider. While choosing a IaaS provider, you should estimate and keep in mind the amount of traffic you expect for your system. Compare offers from various companies and select a cloud provider that will give you the necessary level of service for your budget.
Think security. Encrypt all traffic and make sure that sensitive data is stored securely. Another important part of your software is a secure access procedure. Security is a big concern for customers of any cloud-based solution, and failing to protect customer data may result not only in high remediation costs but also in the loss of business, negative word-of-mouth, and even a potential lawsuit.
Think support. You should design and implement a proper 24/7 support system and start training your support staff in advance. Your support service should be ready to answer any customer requests. It includes a series of specific design decisions about support implementation that you should make early in development – for example, whether support personnel should have access to customer accounts. Giving access may help support personnel to fix issues faster, but it is not ideal from a security standpoint.
Gather statistics. While HR SaaS solutions garner a lot of statistics in and of themselves, you as a software provider should think further. Usage statistics and software logs can be paramount for fixing bugs, identifying and patching security vulnerabilities, and deciding how to improve your solution. The ability to store logs and gather usage statistics should be implemented at the early stages of HR software development.
Use available solutions. One of the best ways to save a lot of time and effort is to integrate existing solutions and modules into your system. Third-party solutions for databases and payment processing are among the most popular and frequently used, but there are others that you can employ depending on the design, architecture, and feature set of your project.
Use third-party integrations. A competitive HRM system should be easily integrated with the most common CRM and ERP systems and allow users to export information to popular data formats. Major market players offer their open APIs or canned integrations.
Ensure compliance. The human resources field has strict regulations when it comes to forms, documentation, payroll, and gathering and storing personal and financial information of employees. You need to keep in mind the countries that you’re operating and deploying in and make sure that your solution is compliant with relevant regulations. For an international solution, make sure that each localized version is compliant with the regulations of the specific country for which it was created.
Implement AI. If you want to stand out in a long line of competitors, you can reinforce your solution with some popular technologies. AI can be used for analyzing collected data and compiling reports. Some companies even add a chatbot powered by AI that helps employees find documents or guide job applicants on the company career site.
When designing your own software, it’s good practice to analyze the best offers on the market. This helps you to understand which features are a must for a SaaS HR app and define potential benefits you can introduce to the market.
BambooHR is acknowledged as one of the best human resources software services out there. Based in the cloud, it has a comprehensive feature set. It manages job openings and applicants, tracks time, and evaluates employee performance. The BambooHR human resource information system includes a company portal for internal communication and helps onboard and train new workers. It also helps management to estimate employee satisfaction with employee Net Promoter Score (eNPS). BambooHR stores employee information and documents in a secure database.
BambooHR is suitable for companies of any size. Its pricing starts at $6 per employee per month for the Essentials edition.
Image credit - BambooHR.
Workday is another popular SaaS HRM solution for medium-sized and large enterprises. This software combines human capital management and accounting functionality. It has modules for recruiting, time and performance tracking, talent management, training, career development, scheduling, payroll, and invoicing.
Workday supports Windows, iOS, and Android and has a web-based application. This software has more than 300 clients from various industries, some of whom are featured in Fortune Future 50. Subscription pricing is available by request.
Image credit - Workday.
SuccessFactors is considered one of the most innovative solutions on the cloud HRM market. It manages core HR functionality: recruiting, attendance tracking, training, career development, workforce planning, and analytics. It also features basic accounting features such as payroll, benefits, and compensation.
SuccessFactors is known for its robust performance evaluation capabilities. Its goal management module includes a library of more than 500 templates for typical goals and estimates, and it collects and analyzes data on each employee’s performance. Using this information, the software can even predict the probability of a task.
SuccessFactors has more than 2000 customers. The basic feature set costs $5 per user per month.
Image credit - SuccessFactors.
The HRMS market is still fairly young and has a lot of space to grow. Many companies are only now starting to replace old systems that they’ve been using for years, and they’re in need of quality solutions that focus on a great user experience.
We’ve described the functionality and architecture needed for creating SaaS HR software. Keeping that in mind, you can add any distinctive features to your solution. If you need experienced developers to create custom HR SaaS software or help you with creating your own, please contact the Apriorit SaaS development team!