Over one-third of managers are searching for a new HR software- of this proportion, 74% already have HR software in place but are not happy with it.

Software Advice surveyed 1,000 managers and directors of SMEs regarding the difficulties their HR departments face, and whether they have an HR software system in place to manage these challenges.

UK 3rd October 2021- Software Advice’s study reveals that just over half (56%) of SME managers utilise HR software within their company. However, of the SMEs surveyed, over one third (37%) were searching for a new HR software. Of this proportion, 74% already have a human resource system in place, yet are not happy with it so are looking for a change.

The survey found that the biggest HR challenge UK SMEs face is recruitment- at 32%. Other principal difficulties include the management of payroll (31%), tracking and analysing metrics (27%), managing the work of employees (27%), and regulating work benefits (21%).

In terms of HR software, the survey revealed that payroll was the most used application by UK SMEs. Of the companies that utilise HR systems, 73% use them to manage payroll. After payroll, the most common uses include tracking employee hours (48%), time off due to sickness and holiday (48%) and workforce management (44%).

Although 26% don’t currently use an HR software system, they would like to start doing so in the near future. The main reason why SMEs have not yet invested in HR software is mainly due to a lack of perceived need, as 34% do not currently rely on HR software to process HR requests. As well as issues of affordability with 32% claiming it is too expensive.

HR software ranges in price, with some packages being completely free and some exceeding £100 per user per month. The amount most SME managers said they would be willing to spend was £11-£50, selected by 30% of respondents. However, 27% stated they would only consider using free HR software.

Nearly half (49%) of the SMEs surveyed handle all their HR needs in house. However, 24% work with external companies to manage recruitment and 27% outsource payroll to independent suppliers. Additionally, 47% of SMEs use cloud-based software, in comparison with 27% that use on-premise products.

29% of SMEs do not use any HR software. Additionally, somewhat surprisingly, 15% of the managers did not know whether their company utilises HR software or not, raising questions regarding how effectively these tools are being utilised.

Sonia Navarrete, content analyst at Software Advice UK, comments:

The demands and requirements for HR software change and progress as technology and needs evolve. The current skills shortages pose many challenges for HR departments in the UK, demonstrated through Software Advice’s study, as recruitment is the greatest challenge faced by HR departments. Additionally, HR demands are now becoming more complex, as 74% of the respondents have HR software in place but are not happy with it and require an update. Moreover, HR software is now migrating towards the cloud at an astonishing rate, with now 47% of SMEs utilising cloud-based software, compared with 27% that use on-premise products.

Study Methodology

Data for the HR software survey was collected in August and September 2021, in which 1,000 managers and owners of UK SME’s responded to Software Advice’s survey.

Media contact

Carmina Solano Davis
Marketing Specialist (UK)
carmina.solano@gartner.com

Hexagon Building, Carrer d'Àlaba, 121, 08018 Barcelona, Spain

About Software Advice

Software Advice offers one-on-one advice, to help guide users in choosing the best possible software option for their business. Get real advice from real people. For more information, visit https://www.softwareadvice.co.uk/.

This release was published on openPR.