Often, organizations tend to overlook how important HR management software is and how it can benefit their business. Small businesses feel such a tool would be too complex and advanced for them to invest in. But it all comes down to how you choose the software.

Most of the misconceptions about HR management software comes from the mistakes businesses make during the selection process. In this article, we go through the five common mistakes organizations should avoid during the HR management selection process.

Determine Your Needs

The first step before getting anything new is to understand what you are looking for. Determine your organizational needs before you start looking for HR tools. For example, if you are going to buy a house, you will first need to determine how many rooms you need, the location of the house, and how much budget do you have.

Apply the same strategy here as well, ask yourself why do you need the HR management software, what features are you looking for? How much are you willing to spend on the HR software? Do you have other software that needs to be integrated with an HR tool? And so on.

Once you have the right answers, you will be able to find the right HR management software for your organization. Have a discussion with the vendors you have shortlisted, and clear all the doubts and questions you might have in the beginning.

Limited Options

Another big mistake most organizations make, is they only look at one or two HR tools, and decide between them. This is never enough. When you are looking for such an essential tool for your organization, you need to look at more than 2 or 3 options. The more choices you will have, the better it will be for you to identify what the market has to offer you for your money.

First, make a list of your organizational needs, then choose a bunch of software that are most suitable for the list you have created. From there, you can start narrowing down to a few tools that offer the best value for your money. Reviewing more HR tools will help you determine what the industry has to offer, and will make you more knowledgeable about the capabilities of such software.

So make sure you have enough options to look at when you start searching for a capable HR management software for your business.

Budget Approval

Since you are going to review more than one HR software, it is better to get your budget pre-approved. For example, when you start looking at the options you have, reviewing one at a time will take some time. 

If you do not have your budget approved by the time you finish reviewing all the tools, you might just end up wasting all of your time. This happens more often than you expect.


Another mistake businesses make, not prequalifying the vendors. Once you have the list of your needs, you will need to pre-qualify a few vendors that you will review. Compare the features a vendor is offering to the features you are looking for, such as integration of payroll with attendance management. 

If such integration is one of your requirements, you need to set up a call with the vendor and explain that you are looking for these features. Eliminate the ones that do not match the needs.

Similarly, review the rest of the tools and determine which pens are most suited for your organizational needs. Eliminate the ones that do not meet them and ask the vendors to set up a demo for the remaining ones.

Outing The Scope

Once you have quotes from the vendors, it is important to determine if the scope is clearly outlined.  If it is not, you might end up exceeding your expected budget. For example, if you are looking for custom reports, it should be addressed in the scope.

Similarly, if you are looking for a custom interface for your HR software and HR analytics tools, it has to be addressed in the implementation scope.


The list above does not cover every mistake that businesses make but it should certainly help you avoid the five most common mistakes businesses make during the selection process.


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