In recent years, adoption rate for cloud services among businesses are continuing to grow. Companies invest in automation and try to move routine operations that are not part of their core business to the cloud, in order to save costs and manpower. One of such areas that saw the influx of cloud solutions lately is human resources.

Written by:
Vitaly Plitchenko,
Market Research Specialist

 

Many companies are either already employing or willing to switch to using human resource management systems. Some prefer to build custom SaaS HR systems. Juggernauts like Oracle and IBM are signing multi-million dollar deals with large enterprise and government organizations. But that does not mean that there is no place in the market for a new, successful solutions.

We at Aprirorit provide development services for over 10 years and have a very good grasp on SaaS. Having some SaaS human resources software examples in our portfolio, we decided to create this article in order to share our experience and technical knowledge on how to develop such solutions with those, who want to break into the niche.

 

What is HR SaaS system?

Human Resource Management Systems (HRMS) are software solutions designed to simplify and automate the work of a human manager department. These systems help with a wide range of human resources related tasks from hiring and training to terminating employees. HR SaaS solutions development not only help with documentation and organization of data, they also gather all the necessary statistics, provide analytics, simplify financial operations and even provide employees with self-service options. Main goals of HRMS systems is to centralize and organize HR efforts, and also save money and time of HR specialists.

HR systems can be divided into three main types based on their size:

  • Core HR systems are focused on the core functionality of managing workforce, such as attendance, working schedules and payrolls.
  • Strategic HR systems are focused on talent acquisition and talent management.
  • Integrated HR systems are focused on delivering all the necessary features for an effective Human Capital Management (HCM). These systems aid in recruiting, managing and retaining personnel, performance tracking, statistic gathering, analytics, social features, etc.

Integrated HR systems are the largest and most popular on the market. They are produced by large players, such as Oracle and IBM. Many of said systems present a big set of functional modules and are sold on a modular basis, allowing you to purchase only modules that you need.

When it comes to delivery method of HR systems, SaaS is not the only choice, but it is by far the most popular, both for vendors and clients. SaaS systems give a number of unique benefits:

  • Lower costs
  • No need for additional management and maintenance
  • Reliability and ease-of-use
  • Faster deployment
  • Automatic updates and better security

Therefore, SaaS delivery model is an obvious best choice when it comes to developing and launching new HRM solution.

 

Key elements of HRM solution

From core systems to integrated ones, HRM solutions can widely differ in complexity and available functionality. There is no one way to do things, and the type and amount of modules your system includes should be dictated by your target audience first and foremost.

Nevertheless, let’s look at standard modules, that customers expect to find in most larger human resources SaaS solutions:

Payroll – this is by far the most important and widely used module. It automates payment procedures based on time and attendance of each individual employees. This module should automatically take into account taxes, vacations, sick leaves, and various deductions. Functionality of this module can be extended to cover all employee transactions. Bonus points for allowing seamless integration with general financial system of a company.

Attendance – this module allows you to track time and attendance of each individual employee. It should provide several ways to gather the necessary data and seamlessly integrate into other modules, such as payroll and analytics.

Benefit administration – this module allows you to control and manage employee benefits, such as insurance and retirement. It allows administering, gathering statistics and processing any necessary payments on employee benefits.

Recruiting – this module allows to maintain recruitment lists, aids in job postings across several job boards and processing of applications. This is also a very popular and highly used feature of any HR system, allowing to save a lot of time and effort on the part of HR specialists.

Training – the purpose of this  module is to manage employee training. It should track performance and qualification of employees and allow to create and manage individual development plans. Module should be able to schedule training courses, designate budged to training, etc.

Management – this important module helps HR specialists in day-to-day management of regular workforce. It can store personal records, track performance and qualification, schedule and payroll data of your employees.

Employee self-service – popular feature as of late, it allows employees to perform HR-related actions without taking the time of HR specialist. Employees can request information about their attendance and salary, maintain their schedule, perform necessary transactions, etc.

Analytics – this module allows to track and process various HR related statistics, such as employee performance and attendance. This information can be used in comparison to other company data in order to identify current trends and potential problems.

By including all of this modules, you will be able to create a comprehensive cutting edge HR system, however, the question is, how much does it cost? For a small startup it’s best to start focusing on selected few specific modules, catering to particular market segments, such as making a SaaS recruitment software specifically. Practice shows, that companies are willing to buy several different modules as long as they cover their needs and fit their budged.

 

Technical recommendations for building your HR SaaS system

No matter what features you decided to include in your solution, you still need to consider technical aspect.

With abundance of tools and ready-to-use modules out there, creating SaaS system is now easier than ever. However, this does not mean that inexperienced programmers can write enterprise level software by themselves. In fact, now it is easier than ever to end up with an unstable system, full of security vulnerabilities, with crashes and bad performance. In B2B SaaS, user experience is the most important part of the equation – users will not adopt your systems if it doesn’t look, feel and perform as a modern system should. Therefore the best way to develop SaaS solutions is to find experienced developers with the right set of expertise.

Specific technical requirements for your HR SaaS project will depend upon your own business idea and vision for the project. However, there are certain general recommendations that can be given to any HR SaaS project:  

Base your design on a solid architecture. You need to decide on a technology stack and an architecture, capable of supporting scalability and required uptime early on in the project and build your solution with this in mind. Solid foundation will allow you to optimize and quickly introduce new features without the need for major rewrites. It is also important to start developing with mobile in mind. Smartphones are integral part of our lives and more and more people use them for work. It is best to provide both your clients and their employees with the ability to access your system via mobile devices.  Even if you’re not planning to launch mobile app as a part of your MVP, you should account for it early on and make sure that you would need minimal efforts to port your solution to mobile when the time to expand comes.

Define non-functional requirements. SaaS platforms have unique non-functional requirements, such as choosing infrastructure provider. While choosing 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 cloud provider that will give you the necessary level of service for your budged.

Think security. Companies need to feel that their data is secure and when it comes to SaaS solutions, it is the task of the SaaS provider to establish this security. You need to encrypt all traffic and make sure that sensitive data is stored in a secure manner. Another important part is secure access procedure. Your best bet would be to implement two-factor authentication by using mobile or, in some cases, even a physical token system in order to make sure that nobody can access your system without proper authorization. Security is a big concern for customers of any could-based solutions 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 proper support system and start training your support staff in advance. Your support service should be ready to answer any customer requests. This will include a series of specific design decisions about support implementation that you should make early on in the development, like for example, whether support personnel should have access to customer accounts. It may help to fix issues faster, but it is not ideal from security standpoint. A good middle ground would be a partial controlled access only to specific parts of the user account.

Gather statistics. While HR SaaS solutions garner a lot of statistic 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. Capability to store logs and gather usage statistics should be kept in mind and implemented at early stages of the HR software development.

Use available solutions. While SaaS HR software development can be long and expensive, there are a number of ways to cut corners. One of the safest and best way to save a lot of time and effort is to integrate solutions and modules that are already available into your system. Third party database and payment processing solutions are among the most popular and frequently used ones, but there are others that you can employ, depending on the design, architecture, and feature set of your project.

Account for compliance. 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 country that you are operating and deploying within and make sure that your solution is compliant with regulations in that country. For an international solution make sure that each localized version is compliant with regulations of a specific country for which it was created.

Establishing SaaS business is not an easy task and it takes a lot of managing prowess to effectively juggle budget, human capital and technical requirements. Above considerations are designed to streamline the process and put you on the right track, and by keeping them in mind, you will be able to build a better product with less overhead.

 

Conclusion

HRMS market is still fairly young and despite the fact that new SaaS HR solutions keep emerging there is still a lot of space to grow. Many companies only now starting to replace their old systems that they have been using for years, and they are in the need for quality solutions that focus on great user experience. We hope that information in this article will help you successfully bring your own HR SaaS solution to the market and take on competition with better design and a robust set of features to boot.

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