Best Employee Management Software in 2021

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Pocket HRMS

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LuitBiz HRM & ESS

To leverage & align HR practices to build critical...

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A unified platform with many applications Employee...

NeeyamoWorks has built a suite of new-aged global HR products that supports an organization's HR requirement irrespective of its workforce size, di... View Profile


Saral PayPack

Complete Payroll solution right from attendance pu...

Saral PayPack offers you a thorough finance programming answer for all your finance requires. It is a one-stop objective for your hunt as it has th... View Profile

Employee Management Software succeeding in these cities :

Technology Counter Employee Management Software Buyer's Guide

Employee Management Software

Employee management software is designed to help companies identify and analyze the Employee’s performance. From tracking their working hours to handling the paycheck, everything can be managed from a single, centralized system. The best employee management software can boost your employee’s productivity. It ensures that all tasks are executed in a timely manner.

In this post, we will take a look at the meaning, purpose, features, and types of employee performance management software. Let’s begin.

What is Employee Management Software?

Employee or staff management software can be defined as the set of tools that help companies Enhance Employee Experience, store the important and confidential information, and deploy strategies that result in efficiency in employee’s performance. The best employee management software isn’t limited to storing the financial or personal details of each employee in a firm. This single system has everything a company needs to boost the employee’s motivation and engagement. If you manage to build an employee’s motivation, the turnover ratio will automatically drop.

That’s exactly what the best employee management software helps you with. It grows the employee’s engagement and brings the turnover percentage of your firm down. With the effective and premium employee performance management software in place, you don’t need to overspend on your HR team. There is absolutely no requirement for a human resource department as long as you have the best and all-featured staff management software.

Common Capabilities of Employee Management Systems

Even a free online employee management system can help you automate some HR activities. However, that won’t work for small or large-sized organizations. If you have a large workforce, divided into several departments, then you are going to need to consider a paid and premium employee database software. This leads us to an important question “what features do you look for in an employee management platform?
A simple Google search will present a list of vendors that offer different types of employee management systems that come packed with a range of tools. So, what will be your best pick? The features you need in the software depend on your organizational goals and requirements. Here, we have mentioned a few basic features that every hr employee management system offers:

employee management system

  • Attendance and Time Tracking Software

Most companies pay their employees according to their attendance. Of course, it makes sense for a business to pay wages and salaries based on the working hours. Now, recording the attendance can be time-consuming, i.e. if you execute it manually. Besides, manual attendance can result in errors that can cost your business hundreds of dollars. Payroll happens to be a sensitive topic that could lead to unnecessary tension among your employees. The employee time management software can help simplify the attendance process. It automates the attendance and records your employee’s working hours accurately.

The leave management system features timesheets that not only record the employee’s attendance but sync this data with the payroll management tool. So, the payments for the off-days will automatically be deducted from the paycheck. You don’t have to waste your time on comparing the attendance of each employee and issuing their paycheck accordingly. By issuing the paycheck on time and allowing your employees to monitor their working hours, you can satisfy your employees. This also helps your HR team to focus more on other crucial tasks, such as receiving employee’s feedback.

Employees can log into the software and enter the number of hours they worked in a simple click. This saves plenty of time for your HR team. They no more have to track each employee’s working hours and record them in the spreadsheets. Now, the time and attendance management tool can also track the working hours of a remote employee. With this module in place, you don’t have to worry about inaccurate information. Your HR will know how long your employees work and how often they request leaves.

  •  Employee Database

Businesses need to store employees’ personal and confidential information in an efficient system. You are going to need their financial details when making the direct deposit. Likewise, you will need to access their personal information, such as contact number, for sending an important notification. The employee database module can store a large volume of data efficiently. You can record the name, address, contact number, date of birth, bank details, salary, job title, and other such personal information of each employee in this section.

Some systems can record the custom details of your employees, such as their hobbies, qualification, certificates, training, references, vacancies, experience, date of joining, and more. Make sure you invest in a system that features advanced security features, such as multi-factor authentication and data encryption. Rest assured that an employee database will act as the digital filing cabinet that can store a significant amount of information easily.

  • Employee Self-Service Portal

Many modern employee management systems have an employee self-service portal that allows your employees to record important information in the system. Now, the employees can manage a range of tasks that would otherwise be handled by the HR team. For instance, they can update their bank details, personal information, and contact details.

With employees recording their personal information using the employee self-service portal, there is a lower chance of entry errors. They can also use this system to adjust their availability, send time-off requests, and record their attendance. Besides, the module allows them to interact with the human resource team during non-working hours.

  • Sick Days Tracking

Almost every employee requests sick days leave every now and then. Though 5-10 sick days leave are common, they can disturb the payroll management. Companies may need to fill the vacancy with freelancers and other temporary employees. Finding these employees and training them for the job can be super challenging. Moreover, it will consume a lot of time, which could otherwise be used for productive activities.

The sick days tracking system records the employee’s day-off due to health or medical issues. Some companies do not deduct salaries for sick-day leaves, but most of them do. So, if you pay your employees according to their attendance and working hours, then it is important to track their sick days and deduct the payment from their salaries. You can also integrate this system with the timesheet and payroll management module for automated salary calculations.

  • Employee Onboarding

New employees find it hard to interact with their co-workers and get used to the new working environment. The confusion about the company, its structure, and working condition can discourage your new employees. That’s one of the reasons for a high turnover ratio. If you can’t make your new hires familiar with the working environment and their co-workers, chances are they will quit the job in a few days. Employee onboarding can help make your employees familiar with the company.

Basically, the HR team has to introduce the new employee to all the co-workers and fill them in on the organizational goals and the employee’s responsibilities. If you do it manually, it could take days to explain everything to a new employee. Now, this can be quite time-consuming and nearly impossible for large organizations that have new employees every week.

The employee onboarding tool will help your new employees gather all details they need about your company. You can allow your new employees to access the details of the organization and other employees in one system. Basically, it delivers integral information about your business to the new employee and explains to them their role. Some advanced employee onboarding systems offer comprehensive training to each new hire. They will find all information about their position, work, and responsibilities on one platform.

  •  Employees Performance

Many companies pay their employees based on their performance and efficiency rather than their absence/presence. An employee performance management module enables your HR team to get a clear picture of your employees’ productivity, their efficiency, tasks they have completed, and other such performance-related details on a single, centralized platform. Even if you do not issue a paycheck according to the employee’s performance, it is important to track their productivity to plan your future employee management strategies.

The performance of each employee matters. After all, it is the workforce that determines the success of a firm. You can use this module to offer incentives to the employees that give the best performance. This simple module can help boost your employees’ engagement and get them to be more productive and efficient.

  • Payroll Management

One of the most important modules of the best employee management software is payroll management. Employees expect the HR team and managers to issue their paychecks on time. Additionally, they expect you to add extra payments for overtime. Likewise, you are supposed to deduct their salary for day-offs.

A dedicated employee relations management system comes packed with the payroll management system that is designed to issue paychecks by calculating the salary of the working hours.

Who Uses the Employee Management System

All types and sizes of companies need the best employee management software. Even businesses with 5-10 employees need a dedicated management system to automate employees’ attendance, reports, data analytics, and other regular activities. Competition is growing rapidly, more now than ever. In order to survive the fierce competition, it’s important for businesses to adapt to the latest technology. The success of a company depends on human resources. Sure, you have an HR management team that’s responsible for handling all sorts of workforce-related tasks. However, nothing can beat the performance of the employee management tools.

While startups can stick to free employee management software until they decide to hire some employees, small and large corporations need a robust and smart solution. You can’t go on handling the mundane business activities manually. Sure, you might have the habit of managing your employees, but as your company grows, you will need to adapt to the smart solutions for better and smoother management. You can save money by handling all the administrative work on your own. However, you will never get an opportunity to focus on productive business activities, such as focusing on data analytics and other useful insights for business growth.

Why do you Need the Best Employee Management Software?

The HR team of a company is responsible for onboarding new employees, complying with the latest corporate regulations, paying each employee on time, recording attendance, and ensuring that each employee gives their best performance. That was only a few essential management responsibilities of the Human Resource Management team. As an HR manager, it is your job to build employee engagement and retention. Most importantly, you are supposed to facilitate seamless and smooth coordination between departments.

Mostly, the HR team of a company gets so occupied with the administrative work that they hardly find time to focus on improving engagement. If you want your employees to work for your company for years and deliver the best performance, then you will have to build an employee’s engagement. That’s only possible when you connect with your employees, take their feedback, work on them, and provide them with the best experience.

The employee relations management system is designed to automate all this hectic administrative work, giving you enough time to focus on productive activities. Here are some reasons why every company (regardless of the size) should invest in the best employee management software.

Employee Management Software

  •  Improve Efficiency

Gone are the days when businesses had to overstuff their HR team for the administrative work. Today, handling the management work manually is nearly impossible, even for a qualified HR team. Monitoring the performance of each employee manually or recording their details in files or spreadsheets can result in errors. Besides, it could also lead to compliance risks.

You can’t avoid the regular management work, but you can improve efficiency by automating a plethora of HR-based tasks. For instance, the time and attendance management module can save a lot of time by recording the employee’s attendance automatically. It calculates the number of working hours of each employee, as well as, their payment accordingly.

  •  Employee Engagement

Do you know 70% of employees are unable to deliver the best performance due to the lack of engagement? The best employee management software comes packed with the performance management tools that help the HR team evaluate the performance of each employee. Not only does this data help you calculate the salary according to the employee’s working hours, but you could use this information to boost employee engagement.

One interesting way to build engagement is by offering incentives to the selected employees. For instance, you can offer rewards, bonuses, and other such incentives to employees who accomplish all their responsibilities in a timely manner and deliver the best results. Let them access their reward statement to find out their total rewards. This will encourage them to perform better than others and earn rewards.

Similarly, you can work with your employees to achieve your long-term business goals. The automated employee management tool enables your employees to leave feedback, connect with higher authorities, communicate with their co-workers from other departments, and handle the day-to-day activities efficiently.

  • Facilitate easy Communication

Improper communication is the primary reason for the lack of employee engagement. Clashing schedules and heavy workloads can affect communication between employees and managers. You cannot build engagement or achieve employee retention if you don’t communicate with them regularly.

Employees feel unfair when they don’t get a chance to communicate with higher authorities. What makes it even more challenging is the fact that employees have to walk up to the manager’s cabin to talk to them. To make the communication easy and smooth, the best employee management software offers a feedback system that helps employees leave the feedback and get instant replies.

  •  Give Regular Feedback

Sending regular feedback to your employees on their performance can help boost their motivation. Do you really think your employees will want to give their best when they get no feedback for their job? Just handing them their salaries will not do. If you want to grab their attention and encourage them to perform well, then you need to check their work and provide them with feedback.

For instance, if an employee from the sales department has managed to bring a bulk order from your regular customer, then they deserve positive feedback and reward. Nothing could demotivate the employee more than a manager who doesn’t care about these small achievements.

  • Secure Employee’s Personal Information

Hackers often target HR databases to steal the employee’s confidential details. This includes their personal information and bank account details. Usually, no one records these details in files and papers these days. They store this information on computers. You don’t get a lot of security options from traditional record-keeping methods. Anyone can access this information and misuse it.

The best employee management software is secure and encrypted. No one (except for those with permission) can access this confidential information. Data encryption and multi-factor authentication are two important security tools of the employee HR Software. Overall, the system keeps your data safe. Besides, one system can manage the database of your previous and current employees. So, if you ever need to contact your previous employees, you know where to find the information.

  • HR Data Analytics

As mentioned above, you don’t get time to focus on data analytics and other such activities when you occupy yourself with the administrative work. If you would like to achieve employee retention and engagement, then you will need to use insights to solve some major business challenges.

Let’s say you notice a high employee turnover ratio in the sales department. So, what’s the reason? Why do employees quit their jobs? Is there any issue with the management? Does this happen because of low engagement? Or, do they have a problem with the salaries? The only way to know the root cause of such issues is data analytics. It’s important to study these metrics and plan your employee management strategies accordingly.

  • Prevent Compliance Risks

A company is responsible for completing the l-9 form during the audit. If you fail to complete the form, you will have to bear a penalty of $16,000. You are supposed to issue paychecks, execute the regular management, and complete critical reports according to the latest compliance. For instance, companies have to deduct the tax amount from the employee’s paychecks. You need to do it according to the current tax regulations.

An employee management platform is a cloud-based system that allows HR teams and managers to complete these forms and tax documents and forward it to the auditors in simple clicks. You can access this information anytime and anywhere. It also reduces the risk of manual errors in calculations and reports. You don’t have to worry about omitting the crucial details or making errors in the tax calculation.

Market Trends Of Employee Management Software

With the changes in the workforce and business structure, it has become quite important for developers to know the latest trend and build a system around the current workforce industry. Note that the success of the firm depends on the quality of the workforce. That being said, you need to invest in a system that follows the latest market trends. Here, we have mentioned the top trends for the employee management system.

employee performance management software

  • Employee Engagement

Due to the fact that a disengaged employee could cost hundreds of dollars to your firm in the long run? A determined and passionate employee tends to perform best. Businesses that have engaged employees have a 65% higher turnover than other companies. Now, companies will want to invest in a system that offers a self-service portal and other such advanced options that allow employees to take part in the management functions. Such software systems are designed to boost employee engagement by offering them a reward program, feedback option, and other such flexible features.

  • Self-service System

Now, employees no longer have to depend on the HR team or managers to execute the basic employment-related tasks such as requesting a day off or checking their regular schedule. Instead of having to walk to the workplace to know their schedule, they can log into the employee management system and access their work schedule in simple clicks. They can also forward the leave application to the higher authorities through the cloud-based system and get their application approved instantly.

Companies have started to implement a system that features a self-service portal that gives employees an opportunity to access the required information or make changes to their personal or bank information.

  • Growth in the Gig Economy

The gig economy and freelancing have become quite popular in recent years. More than half of the Gen-Z people use freelancing as their full-time or part-time career. Even companies find it easier to hire freelancers and temporary workers for short-term contracts. Now that freelancers are not the regular employees of the firm, their payment has to be managed separately. In fact, most freelancers need payments on an hourly basis.

With this trend evolving at a rapid pace, it’s become more important than ever for companies to look for a system that supports a flexible payroll management module that could handle the freelancer’s payment separately. Also, this module needs to have a time and attendance system that can record the working hours of the employees working remotely.

  • Artificial Intelligence

AI can help predict future workloads, allowing businesses to save money on unnecessary labor expenses. AI integration into employee management software can streamline a lot of data handling activities. It helps you create a personalized, automated message for each employee or shareholder of the company. Besides, it analyzes employee’s performance and helps you pick the best employee for specific tasks.

  • Seamless Integration

An employee management system needs to be compatible with third-party apps and software. There is no point in investing in a system that could not be integrated with the software you already have in your firm. You must be able to integrate the system easily with an app or another automated solution.

Type of Buyers for Employee Management Software

Startups –
For those who have recently commenced their businesses, a solution that comes packed with the basic modules will do. First of all, startups do not need employee management software as long as they don’t have employees. The software is needed when you have 3-10 employees.

So, if you plan on expanding your business in the future or hiring more employees, then you will have to invest in the employee database software. You can start with the free and open-source employee management software to get an idea of the modules.

Small and Medium Companies –
Even small companies with a couple of employees need a powerful management system. If you want to grow your business, then you need to invest your time into productive activities. Don’t let those administrative tasks keep you occupied. A high-quality employee appraisal software can work wonders for your small business.

It will help automate multiple tasks, saving you plenty of time. Besides, make sure you opt for the software that is compatible with all the latest functions. As your company grows and you bring more employees to your firm, you will need a system that can handle a large volume of data seamlessly.

Large-scale Companies -
Multitasking is extremely difficult for a large-scale company. Usually, large corporations have several departments. You can’t afford to make mistakes in payroll management and tax compliance.

In order to build an employee’s engagement, large corporations need a dedicated solution that’s capable of managing a range of operations seamlessly. Try to opt for the trending employee management software that comes packed with the latest features.

Choosing the best Employee Management Software

Buying talent management software online seems easy. However, the market is filled with vendors that claim to offer the best and cheapest solution for all sizes of businesses. Comparing the features and prices of different staff management systems can turn out to be a real challenge. Besides, it gets a bit overwhelming for first-time shoppers.

So, how do you find the best solution when every merchant claims to sell the best product? Well, we have already discussed some important tools or features that you need to consider when investing in a remote employee management software. The best option is the one that fits your organizational structure and helps you achieve your company’s long-term goal. Remember that the employee management software does a lot more than storing a large volume of confidential data.

In fact, storing data is only one of its functions. A high-quality system can build employee’s engagement. It encourages your employees to give their best performance. To help you pick the best solution, we have come up with a few important tips you need to consider before making a purchase. Let’s take a look:

  • User-centric Design

There is no point in buying a solution that needs technical support regularly. First of all, you need to check the user interface of the system to determine its complexity level. The system with a neat user-interface is easy to handle and operate. In fact, remote employee management software features drag-and-drop customization options. In simple clicks, you can access whichever tool you want.

  • Cloud-based Software

Earlier, the on-premises software was quite common. However, they would take up to 3 years for development and implementation. Also, these systems were not reliable. Companies needed thorough training to get familiar with the on-premises cloud-based software. Nowadays, more and more companies pick a cloud-based system. It doesn’t need any physical setup. All you need is a laptop or smartphone to access the solution.

The new business environment has changed. Now, companies look for Omni-channel software for employee management systems that is easily accessible. Of course, it makes sense to invest in a cloud-based system that could be accessed anytime and anywhere. Whether you need to generate reports or issue paychecks, the cloud-based employee engagement software can allow you to execute all kinds of administrative tasks from the comfort of your home.

  • Generate Automated Notifications

For a small-sized business, it might seem easy to send regular notifications to each employee. However, that is only possible when you have only a couple of employees working for the company. If you have different departments, then it is important to send automated notifications. After all, you can’t type a personalized message and forward it to each employee manually.

Make sure the software you purchase supports the automated notification system. You must be able to send an automated email or SMS to your employees regarding important announcements. This feature can send a message to each employee when there is any change in the company’s policy or working conditions. Likewise, it can generate automated reminders or send a personalized message when there is a special announcement.

  • Employee Self-service

Not all performance management systems offer the self-service portal. However, if you want to boost employee engagement, then this module is a must. If you buy the entry-level employee management system, then it will restrict the self-service system to employee’s data accessing ability. A high-end solution, on the other hand, can offer a broad range of features, such as networking and assessment options.

It allows your employees to record their attendance, enter their personal and financial information in the system, communicate with supervisors and managers, and interact with other departments seamlessly. This reduces the workload of your human resource team.

  • Interoperability

You can make the best of your employee management software by integrating the system with other modules. For instance, you can integrate the system with the accounting module or other applications to streamline your management. However, not all software for employee management systems is compatible with third-party apps. You need to look for a solution that could be easily integrated with other software and apps.

  • Easy to Use

Unless you run an IT company with all your employees being IT professionals, there is no chance all your employees can learn the modules of the employee management system in a week. You need to look for a solution that your HR team can use. After all, they are going to operate the software the most. They will need to access data, generate reports, record attendance, and issue paychecks. So, it is important that the software features a smooth user-interface and easy navigation. You don’t want to disturb the technical team for minor issues. That being said, it is important to pick a solution that is easy to use.


As mentioned before, the growth and success of the firm are often in the hands of employees. As a business owner, it is your responsibility to manage the workforce. While it seems easy to leave everything to your HR department, a bunch of people cannot execute all the HR-related tasks efficiently. After all, it isn’t only about issuing paychecks on time or recording the attendance.
To make the best of your workforce, you need to streamline a range of human resource management activities. That’s the reason why it is extremely important for even small-sized businesses to embrace the digital system for employee management.

Frequently Asked Questions [ FAQs ]

Employee management software aims to streamline a plethora of administrative tasks. It automates the basic HR-related tasks. From managing timesheets to issuing a paycheck, the employee management system can handle it all for you. It gives your HR team an opportunity to focus more on productive tasks than managing the regular administrative activities.

No, you do not need prior knowledge to operate the employee time management software. Besides, you don’t need to be tech-savvy to access this module. The vendor will offer you proper training to explain every module in detail. This will allow all your employees to get familiar with the system and understand the working of the employee management software. If you face any issue while using the system, you can contact the support department.

Developing and implementing employee performance software can be a complicated process. If you are planning to implement the on-premise employee software, then it could take up to 3 years. If it is the cloud-based solution, then the implementation process will take 6 months. It is important to develop the implementation strategy and discuss it with the vendor.

The employee management software comes packed with a range of tools that are designed to streamline multiple administrative operations. You could integrate the software with accounting management and HRMS tool for smoother operations. Each company has different requirements. However, you need to look for some standard modules that come integrated into the employee management software. This includes the time and attendance management system, employee performance system, payroll management, and more.

Usually, employee management software is created keeping in mind the big companies. The vendors plan to sell the system to a reputable and large company to make a significant profit. That’s the reason why many small-sized companies end up with the software that’s actually designed for a large-scale company.

You will only use 20% of the modules integrated into the system. Besides, these models are extremely complex. You are going to need to train your employees to use the solution in the best way. You might also face some technical bugs.

A free online employee management system is available. However, you need to ensure that these systems will hardly benefit you. They can help automate a few administrative activities, but even startups need a paid solution that can streamline a plethora of administrative tasks seamlessly. You need to look for some important features when it comes to buying the employee management software. For example, it is important to invest in a system that comes packed with the payroll, accounting, and attendance modules. You won’t get these features in a free management system.

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Page Last Updated On 6 Mar 2021
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