HR software has exploded in popularity over the last decade. Over time, prices for HR software have decreased dramatically. Nowadays, the average price tag for HR software is around $5-10 per month, with many services available for free or a minimal subscription fee.
This article will go through the different aspects of price and help you figure out how much HR software costs.
Types of HR Software
There are two main types of HR software: cloud-based and on-premise/delivered software. The main difference is that cloud-based software is accessed online, while on-premise/delivered software is delivered on a physical disk or USB flash drive, which must be installed locally on your computer hardware.
In general, HR software costs more when on-premise/delivered, as the cost of hardware, installation, and training adds up (and you might have to buy the service multiple times for each computer). Cloud-based HR software is cheaper because hosting is included in the price, and you are only charged monthly.
Single vs. Multi-employer
HR software is either single-employer or multi-employer. Single employer refers to software that handles a single company's employee data. Multi-employer means that multiple companies can share the software. Most HR software is single-employer.
An on-premise version of a single employer HR system could cost $5000 to $20,000, while a cloud-based system could cost as little as $20 per month. However, multi-employer HR software usually costs more than a single employer because multi-employer HR requires more customization and storage space.
Specialized vs. General
HR software is either specialized or general. Specialized HR software handles a specific aspect of employment law, like benefits management, time and attendance tracking, or accrual accounting. General HR software handles multiple aspects of employment law.
Specialized systems are usually more expensive because they have a more customized user interface and require more training to use effectively. However, most businesses don't need specializations because they can be purchased separately at an additional cost (e.g., a business needs a timekeeping system but doesn't need accrual accounting).
What HR Software Costs
Here is a list of the average prices for each type and specialization of HR software. Note that these are averages and that you may be able to find cheaper or more expensive HR systems available. When starting your search, you can check out our reviews section to see what other customers had to say about a specific service.
Price List: General HR Software
General HR Software Cloud-based On-premise/delivered Users Cost 5 - 10 per month Free/Subscription $10 - $50 per month Download Settings Ability to download and install client, desktop, and mobile apps (internet access required) On-site installation, non-portable software.
Price List: Specialized HR Software
Specialized HR Software Cloud-based On-premise/delivered Users Cost 1 - 5% of annual salary Free/Subscription $0.33 - $2 per month Download Settings Ability to download and install client, desktop and mobile apps (internet access required) On-site installation, non-portable software.
The above list gives you an idea of how much HR software costs. However, the price you end up paying depends on your business and your requirements. As mentioned, you may find cheaper or more expensive HR systems depending on your situation. Here are some additional factors that affect how much HR software costs:
1. Number of Employees
Many people think that a bigger company needs a more expensive system because it has more employees to track, but this is usually not the case. According to a survey conducted by ServiceNow, the average systems used by companies with 100 employees cost around $900 per year. The average systems used by companies with 1,000 employees cost around $500 per year. This is because larger companies are more likely to have multiple HR departments handling different aspects of HR.
2. Size of Firm
Bardonia has found that smaller businesses have more trouble finding affordable HR software, and larger ones can negotiate better deals. The same ServiceNow survey shows that businesses with less than 100 employees pay an average of $2,000 per year for HR software, while more than 3,000 employees pay $1,000 per year.
3. Business Type
Many HR systems charge extra for features related to non-profit and manufacturing industries. However, some free or cheap systems are available. Some examples would be QuickBooks, a free edition, or Atlassian JIRA and Confluence. These types of software are not free, but they are affordable.
4. Type of Employee
Some people think that those who work in HR need more HR software than those who don't, but that isn't true. You can use QuickBooks or Tally for most job functions and still get the same productivity and savings as a full-fledged HR software package.
5. Ease of Use
Many HR systems are complex and difficult to use, so you can pay more for a vendor that provides a better user experience. However, most good HR systems have a free trial, so you can make sure the system is easy to use before purchasing it.
6. Mobile Accessibility
If your employees use mobile devices at work, you need an HR system that works on all major operating systems and devices. For example, your employees might need to use their Android phones, iPods, and iPhones.
7. What Size Company You Are?
Big or small, HR software companies usually better understand what business owners and HR managers need. The bigger the company, the more choices you can get from one vendor. However, smaller businesses usually have fewer options because most vendors only want to work with larger companies.
Hum resources software prices range from free to thousands of dollars per month. Prices vary according to your business size, HR software features, and the type of license you purchase.
The most common pricing model for HR software is per user per month. The price increases as you add users (employees) to your account. If a company has more than 1 location, they can expect their prices to be double or triple. Some companies offer a price reduction based on how many employees you have (e.g., $10 per employee).
The following pricing models are available:
You can also divide into packages and pick the features you need rather than the entire HR software package. For example, you can choose to pick the version of HR software that handles your organization's payroll software needs. If you want to handle other HR functions (i.e., benefits administration, time, and attendance), then make sure to include it in a package so that you don't have to try and purchase all of those components separately.
HR software can evaluate which of the business needs you have. You can purchase just the benefits administration or time and attendance components, client management or personnel tracking, or even a complete package that handles everything for you.
HR software features are divided into core functions and professional HR services. Some features require a basic license (like payroll), while others may include a seat-of-the-pants approach to HR management (i.e., enter data into an Excel spreadsheet).
How to Save Money on HR Software
The best way to find affordable HR software is to buy a subscription that renews automatically. This is especially helpful for companies with over 100 employees because they qualify for volume discounts from vendors. You can also ask your HR manager or business owner if you can use their software, like Tally, QuickBooks, or Wrike. Many businesses allow employees to use their software for work, which can save you a lot of money.
The best way to save money on HR software is by creating a budget based on the actual costs of your company. For example, if your company uses QuickBooks, you can pay $500 per year for the subscription. However, if you use QuickBooks and create dashboards to track your time, then it might be worth paying $1,000 per year. Your business may only need one or two features out of the many available in QuickBooks, but the price will vary depending on what features are necessary.
The next best way to save on HR software is by getting discounts on software bundles. For example, companies that need a payroll system can get QuickBooks and QuickBooks Pro for $1,500 per year rather than $3,500. Most customers pay this price because they don't realize the total cost of running two HR systems. However, if the company were only using one system, it would be cheaper to buy these systems separately and still get a discount.
The best way to save on HR software is to check out the vendor's discounts page. Often vendors will provide additional discounts if you sign up for a longer term. The longer the contract, the lower the price usually is.
Lastly, you can ask your HR manager or business owner if they use any companies and how much they pay each year. Or, you can contact the major HR software vendors and find out which one offers the best discount for your company's needs.
HR software is important for any company, large or small. The right HR system can help maximize efficiency and productivity. However, you have to spend time researching each type of HR software to find one that suits your needs. Each business is unique, so you must decide what features your company needs before purchasing a package. Remember that quality is also very important because HR software is used in business every day!