The best HR software of 2025- business.com

The features you should look for depend on your specific HR needs. However, here are some key HR software features that most businesses benefit from.

Recruitment and integration

Most HR software includes tools for recruiting, onboarding, and offboarding employees. These features include job posting and syndication, configurable applications, interview and assessment features, background check integration, offer letter templates, new hire records, onboarding checklists, e-signing capabilities, workflow automation, document storage, employee profiles, and training tracking.

While some systems include these features in-house, most offer a combination of in-house features and integrations with third-party platforms, such as applicant tracking systems and top background check services.

Pay

Most HR software comes with a built-in payroll option or integrates with top rated payroll software from a third-party service. Integrated payroll modules typically include the ability to calculate employee paychecks, manage multiple pay rates and schedules, administer garnishments, pay employees by direct deposit and payment cards, and provide payslips online. A newer feature offered by some software is on-demand pay, which allows employees to access a portion of their salary on the day they earn it, helping to improve financial well-being and employee retention.

HR software can handle all payroll tax responsibilities, such as calculating and withholding federal, state, and local payroll taxes. It can also prepare and deliver electronic 1099s and W-2s. Most HR software integrates with the best accounting software.

Time and presence

Many HR software options include time and attendance features so employers can accurately track employees’ work and time off hours. Most systems are cloud-based, allowing clocking in and out via a browser, while many also offer iOS and Android mobile apps for clocking in and out remotely. Another useful feature for offsite workers is geolocation tracking, which monitors where an employee is when they are clocked out. Most HR software allows for automatic and manual time tracking, as well as scheduling, swapping, and deleting shifts.

HR software can help you manage PTO requests and accruals, and it can offer some automation and alerting features to help you maintain legal compliance with things like break policies and overtime laws. Employee time tracking data is automatically synced with payroll solutions to streamline payroll processing and increase salary accuracy. (Read related article: Why Your Small Business Needs an Attendance Policy)

Benefits Administration

HR software can help you administer employee benefitsincluding medical, dental and vision insurance; employee retirement accounts; life insurance; insurance policies against accidents and illnesses; short and long term disability insurance; health savings accounts and flexible spending accounts; automobile and home insurance policies; benefits for commuters; workers compensation; pet insurance; and various covers. Most integrate with popular benefits providers to offer you competitive benefits and rates, streamlining the enrollment process during open enrollment periods.

Additionally, most HR software providers will help your employees get the most out of their benefits. Features like easy plan setup and ongoing participant education can help streamline the benefits process.

The best HR solutions have features to help you and your staff sign up for benefits. Source: GoCo

Performance management

Standard HR software allows you to track and manage employee performance. This may include tools for setting and tracking goals, succession planning, and performance evaluation. Some software also includes custom dashboards and learning management systems with training courses so you can easily deliver mandatory training (for example, on sexual harassment) or professional development training.

Legal Compliance

HR software helps you maintain audit-ready records and comply with labor and employment laws like the ACA, COBRA, and newer regulations like state-specific pay transparency laws. Custom workflows and automation features can help maintain legal complianceas they reduce the risk of human error by ensuring that certain required measures are followed every time. HR software companies typically offer customer support via phone, email, and chat. The best companies also offer a dedicated support representative who can provide HR advice throughout the process.

Reports

Most HR software provides useful reports and analytics. Depending on the type of reporting you want, you may need to subscribe to a more advanced software plan, but basic plans typically provide data on your team, payroll, taxes, and more. HR reports can be a valuable tool for tracking workforce trends and increasing the efficiency of your entire workforce.

Standard reports such as payroll reports can be a great added value for employers who want to manage HR costs. Source: Ripple

Self-service dashboard

A self-service dashboard allows employees to manage their benefits, request time off, and complete performance reviews. Most systems are cloud-based and offer mobile apps for iOS and Android devices, so employees can access the software anywhere they have an internet connection, providing greater flexibility for hybrid and remote teams.