Everything You Need to Know About HR SaaS

Everything You Need to Know About HR SaaS

SaaS. It’s a funny looking acronym (pronounced “sass”) that stands for software-as-a-service. Why is it significant? Well, before the SaaS business model became popular, software applications were installed directly onto employee machines. They could not be updated without a new program installation. These programs were expensive, impossible to trial before buying, and required a staff of IT people to maintain.
Luckily, we live in a world where few of these problems still exist. SaaS has changed the game when it comes to the way businesses use and deploy software and it’s positively affecting every department, HR included. Human resources is benefitting from HR SasS in a significant way. Cloud-based HR software is giving people leaders tools and technology to automate many of the repetitive tasks and processes they oversee.
We’ll dive deeper into the world of HR SaaS and list out exactly what you need to know when evaluating HR SaaS products.

What is HR SaaS?

HR SaaS gives Human Resources leaders technology to manage their people, payroll, and HR processes online. HR SaaS tools are predominantly accessed through an internet browser and are accessible anywhere a user has an internet connection. These tools allow small and mid-sized businesses complete control over people-related operations.
HR SaaS covers a wide range of products, features, and functionality. Because the Human Resources department shares in such a broad set of responsibilities, HR SaaS tools have had to be equally flexible. As the HR SaaS industry has matured, software products have been made to service almost every need imaginable.

Types of HR SaaS

When looking at HR software products, you’ll find that some companies sell tools that focus narrowly on a single HR function. Other HR SaaS products cover a range of functions that are well-integrated into a single system.
When selecting your HR SaaS products, you’ll have to weigh the pros and cons of buying “best-of-breed” products as opposed to an all-in-one system. Let’s take a minute to examine the difference between the two.

Best of Breed

This refers to a SaaS product that is created to accomplish a single purpose and do it extremely well. A common best-of-breed application is an applicant track system (ATS). Applicant tracking systems are used to help post jobs, track job applicants, and ultimately, help you hire the best person for the position. Many companies who build ATS products do not attempt to build tools or features that venture outside of the realm of the hiring process. They are simply focused on making the very best ATS possible.


This refers to a HR SaaS product that can manage all your HR tasks in one place but may not be as strong on any single function. For example, Eddy is an all-in-one HR SaaS application. You can hire, onboard, and pay your employees all within a single system. You can also track employee vacation and sick time, allow employees to clock in and out, and have employees electronically sign documents. And while the ATS built into an all-in-one solution may not be as strong as a best-of-breed product, it can usually get the job done for most companies.
Keep in mind that HR SaaS products can be expensive. A company that is large and is growing revenue quickly may be able to afford best-of-breed software for every category. These companies may even have the in-house IT support and expertise to intelligently integrate separate best-of-breed software applications to form a powerful system of their own.
However, this is not only expensive but very complex. This is why many small businesses typically choose an all-in-one solution. The all-in-one solution gives a small to mid-sized business all the tools they’ll typically need while allowing them to skip out on the technological complexity of integrating multiple systems.

Common HR SaaS Tools

Now that you understand the difference between best-of-breed solutions and all-in-one products, we’ll examine the most common HR SaaS tools that exist on the market today. Each one plays an important role in managing either the people or key processes within the business.

Applicant Tracking System (ATS)

The ATS is the go-to tool for hiring new employees. A good applicant tracking system will allow you to easily create job listings, distribute those listings to the world’s best job boards, and then collect resumes from applicants. As applications come in, you’ll be able to quickly see which job candidates are qualified for the position. Rate applications, move candidates to different stages in the interview process, and eventually hire the one you’re looking for.


The onboarding process is perhaps the most critical yet overlooked process in any business. Do onboarding right and you’ll set your employees up for long-term success. Do it wrong and you’ll have unusually high turnover rates, especially within the first few months of employment. HR SaaS tools focused on onboarding can help you create a customized onboarding process that fits your needs and ensures a great experience for your new hire.

Hire and onboard better than the competition. See how Eddy makes it easy.

Document Signing and Storage

You can’t talk about HR without mentioning paperwork. When you hire a new employee, rewrite the company handbook, ask employees to participate in a company event, or need an updated W4 form, it means keeping track of paperwork. One of the most useful features of modern HR SaaS applications is their ability to manage, maintain, and store all these documents in a secure, digital location. No need to go desk to desk, hunting down employees, trying to get wet signatures on various documents. HR software can digitize all your paperwork, keep it organized, make it searchable, and relieve you of the stress and headaches paperwork has been causing for years.

Employee Directory

As companies grow beyond a certain size, it’s hard to keep track of all the people working for the business. An online employee directory solves this problem. By giving employees access to your HR SaaS tool, they can learn about employees who aren’t on their team or in their department. Now when you pass by the tall redhead in the hallway, you’ll know their name and be able to strike up a conversation.

Employee Profiles

In addition to an employee directory, individual employee profiles can be a lifesaver when it comes to data organization. Within an employee profile, you’ll be able to store all the relevant personal and job information for each individual employee. This includes sensitive information such as social security numbers, addresses, phone numbers, salary and bonus information, and so much more. An employee profile allows the employee to see their own data, allows an HR manager to securely access that data when needed, but keeps all other employees out so as to maintain privacy and security.

Payroll Processing

When it comes to payroll, it’s best to reduce human error at all costs. If you’re still having an accountant or an in-house payroll admin manually calculate payroll each week, you’re leaving yourself open to a fair amount of risk and liability. If there’s one thing computers are good at, it’s doing these types of calculations and getting them right every single time. In the new world of HR SaaS you never need to worry about processing payroll correctly. As long as the inputs are accurate, your payroll software will be able to make all the right calculations to ensure those pay stubs are perfectly accurate.

Benefits Administration

As with payroll processing, benefits administration is another area where it’s simply unacceptable to make a mistake. When it comes to people’s health, it’s important that we get it right. Through HR SaaS tools, benefits administration becomes largely automated. Enrollment can be done online and every employee can self-select into the program they wish to join. Employees always have access to their benefit information, insurance card, and more as long as they can connect to the internet.

Training Tracking

We’ve already mentioned what a headache paperwork can be, but we didn’t yet talk about the never ending process of tracking and renewing certificates, licenses, and training completions. Every year it seems like one or more employees are required to pass through some form of training or licensing program. It’s not easy to track who’s done what, what needs to be renewed, and when it needs to be renewed. HR SaaS tools now give you the ability to track these trainings and automatically remind you when renewals need to happen.

See our recommendations for the 20 best software tools for small businesses.

Time-Off Tracking

Whether you’re tracking vacation balances, sick time, parental leave policies, or any other variation of employee time off, the complications of various accrual schedules and balance rules are probably driving you crazy. Luckily, there is plenty of great HR software that exists to simplify and automate this entire process. All you need is set up a few rules for each time off policy and the software product can keep track of the rest. It can also send email or text notifications when your employees make a time-off request so that you can approve or deny the requests as they come in.

Time Clocks

Clocking in and out of a shift has never been easier. Modern HR SaaS applications give employees the ability to clock in from their phone, computer, or tablet wherever they are. Worried that they’ll clock in when it’s not their shift or when they’re not at the office? Don’t be. Many SaaS products will let you customize settings around the time clock so that employees can only clock-in when they’re scheduled to work. You can even enforce things like geo-tracking for location-based time punches. This provides a best-of-both-worlds scenario where employees can conveniently clock-in from multiple devices and locations while business owners and HR admins can be confident that employees can’t game the system.

Performance Management

HR SaaS applications not only give employees tools they need to track their time and connect with their co-workers, but it can also give company managers and leadership the ability to track employee performance. Whether you’d like to set and track individual, team, or company-wide goals, performance management tools can help you get the job done. Many performance management systems are sold as “best-of-breed” and are commonly integrated into HRIS systems. However, some all-in-one HR SaaS platforms have performance management capability built right in.

Why You Should Use HR SaaS Software

HR SaaS is designed to make the life of an HR admin or executive easier. When you pick the right tool you’ll feel a heavy burden lifted off your shoulders. The HR department has so many responsibilities and oversees so many tasks. Without a software companion, the job can feel borderline impossible. But there is technology out there that’s been designed specifically to help do the heavy lifting and reduce the stress of HR management.
Another significant benefit of HR SaaS is the freedom and flexibility it creates to do other things. Because the tedious tasks and monotonous paperwork take so much of an HR manager’s time, they’re often limited in what they can do for their employees. Because of this, company culture suffers in a major way. With HR software automating and even eliminating many of these day-to-day functions, HR departments can now focus on what truly matters--the people within the company. They can spend time building culture, thinking of ways to improve employee experience, and ultimately driving revenue for their firm.

Interested in seeing what HR SaaS can do for your business?

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