TechAccording to Human Resources Software UserView 2014, the latest report from technology consultants Software Advice, 89 percent of HR software users are either “somewhat satisfied” or “very satisfied” with their software. This is good news for the HR software industry: people, it seems, are happy with their products. It should also motivate HR professionals who have yet to get with the times: such an overwhelmingly positive response to HR software suggests it may be one of the best investments a company can make.

Given such high levels of satisfaction, you may assume that 2015 will be more of the same, when it comes to HR software — after all, necessity, not complacency, is the mother of invention. But this assumption isn’t totally correct: people are happy, but 2015 still looks to be a year of innovation, change, and at least a little bit of flux.

I corresponded with Software Advice market research associate Erin Osterhaus via email, and she was kind enough to offer some commentary on the study and some insights into the trends the survey uncovered. (Transcript slightly edited for style and clarity). According to the survey, “most smaller businesses — those with fewer than 1,000 employees — report using a combination of HR software and manual methods.” And overall, 68 percent of survey respondents say used both HR software and manual methods. Why do you think this is? Should these smaller business look into phasing out manual methods in favor of full reliance on software?

Erin Osterhaus: Many small businesses have a limited IT budget — especially when it comes to human resources. Therefore, in order to maximize their return on investment, these businesses may tend to purchase only the software that streamlines their most common business functions, while retaining other (usually manual) methods for the functions for which they cannot afford software.

While a full reliance on software might be ideal for many of these small businesses, limited resources restricts their adoption of a full HR suite. As their businesses grow and their old methods become too unwieldy to handle their workflow, they should definitely consider a switch.

RC: Forty-four percent of respondents said they were looking to increase spending on performance review applications in 2015. Why do you think performance review applications are such a priority for so many respondents? Conversely, roughly 30 percent of respondents said they were going to increase spending on applicant tracking and benefits administration. Why do you think these things in particular are low on the priority list?

EO: Small businesses are likely looking to increase investment in performance review applications for a simple reason: they haven’t had the application before.

Conversely, ATSs are lower on the list because more small businesses already have them, as recruiting is a core function of even small businesses. Meanwhile, performance reviews may still be manageable using manual methods when a company is still on the smaller side, but once a business grows, organizing individual reviews for a large number of employees may become too difficult and software will become necessary.

RC: Customization and mobile access are two challenges that many users report in regard to HR software. Seventeen percent of respondents said they were having a tough time customizing their systems to fit their specific needs, and only 28 percent of respondents could access their HR software via mobile technology. Why are these challenges so common? Is there anything users or vendors can do to address these challenges?

EO: In the case of mobile, I would say it’s likely difficult because it’s new — it was only in late 2012 that it was reported that mobile was “picking up steam.” Vendors are still working out the kinks of how to use their software on mobile devices. After all, for much of HR software’s lifespan, on-premise hosting was the only distribution model available, and mobile was simply not an option.

On the other hand, I think customization is difficult because it’s just that: custom. For vendors, anticipating the needs of their users may be a top priority, but it’s not always easy to gauge how certain companies will use a software, as users can often be very idiosyncratic in their daily workflow.

RC: Most respondents (89 percent) seem satisfied with their HR software. Should we be pushing for more innovation, or are things really that good? Is HR software really that effective?

EO: I think one of the reasons many users are satisfied is that the HR software space is so innovative. New companies and products are constantly emerging (e.g., Namely and Zenefits, among others) that push old stalwarts like SAP and ADP to improve their current products in order to stay competitive.

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