How much does HR software cost?

Features included in the price of the HR software

First of all, you need to know what demands you have on an HR software solution and define your needs precisely. Here is a list of the most important functions: 

• Digital personnel file
• Employee Self Service (ESS)
• Time tracking
• Management of holidays and other absences
• Management of time schedules
• Document management
• Preparatory payroll accounting
• Applicant management
• On- and offboarding
• People analytics
• Employee appraisals
• Customer support
• Unlimited storage space 

The cost range for HR software is enormous: the costs can vary from a few pounds to several hundred pounds per month per employee. It is therefore important to analyze the needs of your company in detail, even if the Return on Investment is guaranteed. This will help you decide on the best possible HRIS solution! You should also consider the development of your future needs and requirements for the HR software so that you can use it for as long as possible.

To choose your HR software optimally, it is best to test the software beforehand. This will ensure that your HR solution is the right one for you. Do not waste money on functions that you will not use or only use to a very limited extent. You should choose a clear and simple solution - this will save you time and make it easier to find your way around.

By requesting a free demo, you can have the software shown and explained to you. This way, you can easily check if the HR solution includes all the features you need and how to use them exactly. During the online demo, ask whether the solution is compatible with other software you already use in your company. 

HR software prices: beware of hidden implementation costs

Usually, the implementation of SaaS software is free of charge. This type of HR software is an out-of-the-box service. However, it is not always clear whether these costs are included in the price.

Data import

The possibility of importing your own data leads to significant time-saving. You do not have to laboriously transfer all data; you only need to click on "Import data" and wait until all important data has been uploaded to the software.

Only with a few HR tools do you pay fees for the data import. It is best to choose an HRIS solution that allows data to be imported directly via the tool or a free import by the software manufacturer.

If this service is not explicitly included, do not hesitate to ask for the price!

Installation and training costs

The cost of installing HR software is another hidden cost. A tool that promises ease of use should not charge extra for configuration. After all, it should be possible to do it easily and quickly - without the help of a trained specialist. If you do need help, the installation should be included in the price as a service. 

In addition, you can do without training if the tool is designed to be sufficiently intuitive. You should be able to start the application and find your way around it yourself within a short time.

If difficulties arise when putting the system into operation, the HR software usually offers customer support to help you. In addition, further freely accessible information should facilitate the implementation of the software: detailed instructions, extensive FAQs, support articles, or self-explanatory videos.

If you cannot find a way to get free help with questions, this may mean hidden costs for the HR software. Ask for details on the implementation fee as well as any further costs for needed support in the future.

Pre-check the requirements

Some HRIS solutions also charge a flat fee for a pre-review to determine your needs before installing the software.

But is a paid review of the requirements you have really necessary? Often this is not the case with SMEs. 

Ultimately, if the proposed HR solution is intuitive and the vendor has provided honest information, there should be no one-off or hidden costs, making a pre-requirements review unnecessary. 

Recurrent costs

As a reminder, there are no updates or maintenance fees with SaaS software, as these costs are borne by the manufacturer. This is one of the great advantages of HR software: the only existing fees are the usage and subscription fees for the HR system. Nevertheless, one should pay very close attention to the small print in the contract because the fees are not always presented very clearly.

Find the software that best suits your needs

HR software can be charged according to the following options: 

• By functions
• By number of users
• By packages with specific functions and services

Do not use HR solutions with many "small" options that you can put together individually. Gradually, additional costs arise that only become visible at the end of the month and lead to a nasty surprise. 

What you should pay attention to when signing a contract

Here is a list of points you should look at before signing a contract.

The subscription can be billed monthly or annually. Even though the annual subscription is cheaper, the monthly subscription offers more flexibility. To be sure that you have made the right choice, you should therefore first take out a monthly subscription and test it for at least one or two weeks. After you have convinced yourself of the solution in everyday life, you can usually switch to the annual subscription without any problems.

Annual subscriptions are often tied to a minimum 12-month commitment. Once the subscription is complete, there is no choice but to use the software. In the worst case, you may have to buy another software subscription if the one you originally chose is not suitable. Then you pay twice!

2. Cancellation conditions 

You don't think much about cancellation when you take out a subscription. However, the contract should normally state how long the cancellation period is.

3. Pro rata invoicing

Let's assume you add more users during the year because you want to give more employees access to the software. Please note the following: Will the fees for these users be charged pro rata, or will you be asked to pay for the whole year/month?

4. Invoicing for deactivated users 

Normally, deactivated users do not use the software anymore. So logically, you should not have to pay for them. But sometimes this is the case! Remember to check with the HR software provider if the subscription renewal (monthly or yearly) is based on the number of active users at time X and not on the number of users entered when the subscription was taken out.

5. Minimum number of users required for a subscription 

Some HR software providers require a minimum number of users for the subscription. Small companies may be disadvantaged and, in this case, need to look for other solutions that do not require a minimum number.

6. Storage costs 

Subscriptions are sometimes sold with limited storage space. If the storage capacity is too small, you may incur additional costs as you will have to buy additional storage space.

7. Conditions for rate increases 

You will find the conditions for tariff increases in the small print of your contract. Preference should be given to contracts with an annual limit on tariff increases and a right of termination for customers if they do not agree.

8. Keep your data when you terminate your contract 

It may seem trivial, but if you change HR software, such a feature will come in handy for exporting and transferring your data. This will again save you time and money.

9. Customer support

Don't forget to check whether you can use the customer support. In case of problems, a fast responding and free customer support proves to be very helpful. 

Avoid chatbots and their prefabricated answers and opt instead for real customer support with dedicated employees who answer your questions live and quickly.

Conclusion