What Should Companies Evaluate Before Switching HR Software?
When thinking about changing HR software, companies need to look at several things. They should check if the new software has the right features, like core HR, leave tracking, payroll, and claims handling. It’s also important to see how well it works with other systems they already use. Companies have to decide between cloud-based or on-site software. They need to figure out the full cost of owning the software. It’s crucial to consider what kind of help they’ll get with setup and training. The reputation of the software provider matters too., they should have a plan to move their data to the new system. Checking all these things helps make the change smoother, keeps the company following rules, and makes sure the investment pays off in the long run.
When your HR software causes more trouble than it fixes—holding up approvals, making payroll harder, or annoying HR teams—it shows the system no longer fits your business. Old or inflexible tools can cut into productivity, raise compliance risks, and hurt how employees feel about their work. Instead of trying to fix problems with manual solutions now’s the time to check if a new HR system can better help your future plans.
This guide shows you what to check before you change: from features and compatibility to expenses, provider dependability, and data transfer. Use it as a practical list to ensure your next HR software purchase helps your team now—and grows with you in the future.
Why Businesses Choose to Switch HR Software
Expansion, Intricacy, and Bottlenecks
Most companies don’t change HR software in a day. It follows months (or years) of problems:
- The system can’t manage multiple units or sites.
- Payroll and time off still need manual tweaks.
- Creating reports takes days instead of minutes.
- HR uses Excel, emails, or other tools to “bridge the gaps”.
As companies expand, their HR needs grow too—more staff more rules more legal requirements. A system that used to work well can become stiff and sluggish pushing teams to do boring manual tasks.
Legal Requirements and Today’s Demands
Laws about jobs, pay, data protection, and record-keeping keep changing. Older HR systems might not:
- Update when legal rules or contributions change
- Keep proper records for authorities to check
- Have strong enough controls for data access and security
New HR software often builds in ways to follow the rules—through auto-calculations, up-to-date legal settings, records that can’t be changed, and customizable access rights—cutting down on risks and paperwork for HR.
Key Areas to Look At Before You Change
Changing your HR software isn’t just about getting new tech. It’s a chance to rethink how your company handles people-related tasks. Here’s what you should look at:
1. Feature Match: Can It Handle Your Actual Work?
Begin by outlining your real HR processes—not just what’s written down. Then check if the new program can deal with them .
Main parts to check out:
- Core HR Software: Employee files, agreements, paperwork, company structure
- Leave Management: Special time off types, rollover rules pro-rated allowances, sign-offs
- Payroll: Multiple pay elements required deductions extra hours, rewards, CPF/EPF-like math, file exports
- Claim Management & Expenses: Policy caps, approvals, repayment deadlines link to payroll
- Performance Appraisal (if needed): Target setting, review periods, scores, growth plans
Don’t just ask “Does it have this feature?”, ask:
- Does this module match our policies and special cases?
- How many workarounds will HR still need after we put it into action?
- Can we cut down on manual Excel tracking once it’s up and running?
2. Connection with Other Business Systems
Your HR system shouldn’t work by itself. A good HR platform should connect with other key tools across the business:
- Accounting Software – For salary records, cost breakdown, reimbursements
- Time Attendance / Timesheet system – For hours, OT, shift pay differences
- Recruitment / Applicant Tracking System (ATS) – To turn candidates into employees
- Payroll / Claims / Appraisal modules – If not all in one package
Good connections help you:
- Stop entering data twice
- Cut down mistakes between systems
- Make better reports across departments (like cost per team, overtime patterns, staff count vs. wages)
Ask sellers these questions:
- What connections work right away?
- Which ones need APIs or special setup?
- How much does connecting cost, and who keeps it running?
3. Cloud or On-Site: What’s Best for Your Future?
Picking cloud or on-site HR software affects both tech and long-term plans.
Cloud HR software:
- Works anywhere (on web or app)
- Updates and fixes security on its own
- paid (ongoing cost)
- Grows as your team gets bigger
On-premise HR software:
- Gets installed on your own servers
- Might give you more control and let you customize more
- Needs IT staff to maintain back up, and secure
- Often costs more upfront (Capex)
Think about:
- Do you have IT staff in-house to support on-premise systems?
- How much do your HR team and employees need to access the system remotely or on mobile?
Are you okay with trusting the vendor’s cloud security and uptime promises?
Money & Operations to Consider
4. Looking at Costs: More Than Just the Price Tag
It’s simple to compare systems just by looking at monthly or yearly fees, but the total cost to own (TCO) is what you should focus on.
Include these in your math:
- Fees for setup and putting the system into action
- Costs to move data
- Charges for customizing or connecting systems
- Training (at the start and over time)
- Fees for help and keeping things running
- Extra parts you might need later
At times paying a bit more for a subscription with good support and automation can end up costing less than a cheap system that still makes HR do things by hand and work extra hours.
5. Training Putting It to Work & Downtime
Even the best HR system fails if people don’t use it.
Ask companies that might provide the system:
- How much time does it take to put the system into action for a company of your size?
- What’s the plan for rolling it out—step by step (like payroll first then leave), or everything at once?
- Do they offer organized training for HR, managers, and employees?
- Will you have a practice or test setup before going live?
Your aim: to keep disruption low, steer clear of payroll mistakes during the switch, and help users feel sure about using the new system.
Vendor Credibility and Support
6. Track Record, Reviews & References
HR vendors aren’t all the same. Before you commit, look into:
- How much time they’ve spent in the HR software industry
- If they work with businesses in your field or handle similar complex cases
- Real customer stories, feedback, or praise
If you can, talk to one or two current users and ask how the system handles busy times (like payroll due dates or review seasons).
7. Getting Started, Help & Service Quality
After your HR system goes live how fast can you get assistance when problems crop up?
Find out:
- Ways to get help (phone, email, chat, ticket system)
- When support is available (your time zone? all day, every day?)
- Steps to take for urgent payroll problems
- If you’ll have your own account person
Also check out the Service Level Agreements (SLAs):
- How fast they respond to big and small problems
- How much uptime they promise for cloud systems
Good support can make or break your experience with a system.
What to Do Next Before You Change
8. Test Drive, Try Out & Walk Through Internally
Don’t just trust fancy presentations. Ask companies to:
- Show you how to do tasks you use (like hiring someone new → paying them → figuring out time off)
- Let you see how it works on phones for employee and employers
- Go through local law scenarios (like specific types of leave, money you have to pay, or files you need to send out)
If you can get a free trial or pilot, have your HR team and a few managers try it out. Ask them about:
- How easy it is to use
- How fast key tasks are
- How clear the reports and dashboards look
9. Get Ready to Move Data & Keep Everyone in the Loop
People often underestimate these two things:
- Moving data – Choose what to move (employee info past payrolls, time off balances), check formats, and test many times before you start.
- Talking to your team – Make sure HR IT, Finance, and employers are on the same page. Tell employees when the new system starts, what will be different, and where to get help.
A solid plan cuts down on pushback, boosts trust, and helps you hit the ground running on day one.
Conclusion
Switching HR software is a big move that impacts how your company handles people, follows rules, and runs daily tasks. It’s not just about getting more bells and whistles—it’s about picking a system that:
- Matches your work habits and rules
- Works well with payroll, accounting, and time tracking
- Helps you follow laws and keep data safe
- Grows as your business and team grow
By taking a close look at what it can do how it connects with other tools where it’s set up, what it costs how reliable the seller is, and how to move your data, you can cut down on the risks of changing and get the most out of it.
Spend time checking out your choices —and make your next HR software purchase one that helps your HR team do their job, supports future growth, and makes life better for employees from start to finish.
Take The Time To Evaluate Your Options Thoroughly & Make Your Next HR Software Investment One That Empowers Your Team And Supports Future Growth!
Frequently Asked Questions:
When should a company change its HR software?
A company should change its HR software when the current system slows down daily tasks, needs many manual fixes, can’t handle staff or rule changes, or makes it hard to create reports. Lots of mistakes in pay, time off, or records also show it’s time to get a new system.
What features does a modern HR software need?
A modern HR software needs to have basic HR (staff records), time off tracking, payroll, expense claims, self-service for employees, approval processes simple data analysis, and safe file storage. As companies grow, they also need the software to work with time tracking, accounting, hiring, and performance review systems.
How long does it take to switch to a new HR system?
The time to put a new HR system into action changes based on how big and complex a company is. Small to medium-sized businesses might need a few weeks to make the switch. Larger companies or those with multiple entities could take a few months. The total time depends on moving data setting up the system, connecting it with other tools, and how fast the company can train and onboard users.
Is cloud-based HR software better than on-premise?
Cloud-based HR software suits businesses that want flexibility remote access automatic updates, and lower upfront costs. On-premise software fits companies that need full control over infrastructure and have strong in-house IT support. Most SMEs and modern organizations now choose cloud-based solutions because they’re easy to scale and use.
How do I calculate the real cost of switching HR software?
To figure out the real cost, add up subscription or license fees, setup and training moving data connecting systems ongoing support, and any custom work. Compare these costs to the time you’ll save fewer mistakes better rule-following, and less manual work to see if it’s worth it.
