SaaS HR software: key features, benefits, costs, and examples

Remember the days when HR was all about saying yes or no to job applicants? Well, those days are over. Today's HR professionals have much more on their plates — planning, analysis, structuring — you name it. Dealing with loads of human data can get pretty mind-boggling. To make things easier for them, exclusive SaaS HR software was designed to assist their day-to-day operations. It does well, as HR managers do not need to waste time doing manual tasks but can automate them for better efficiency.

According to 2022 research conducted by Deloitte, 84% of organizations are currently or about to completely re-configure their HR operations. Many such transformations involve the adoption of cloud technologies. The trend is popular among big and small businesses alike, so the size of a company doesn't matter much.

The main reasons for this changeover are straightforward. An impressive 85% of respondents are driven by cost reduction as an objective, while 75% want the capacity to improve their HR functions.

In this guide, we will cover what is basic but essential regarding must-have features for SaaS HR software, its benefits, costs, and real-life examples.

SaaS HR system and tasks it can handle

SaaS HR system, or software as a Service Human Resources software, is a cloud-based solution that facilitates HR specialists' work and business operations to carry out numerous tasks online without having on-site installations of software.

While the old-school on-premises software was tied to the place, this one can be accessed from anywhere and provides even more perks in terms of flexibility and adaptability as it allows various integrations.

Basic types of SaaS HR software

SaaS-based HR software can essentially be divided into two prime categories:

  1. Core HR software — is regarded as the base module and includes core functions like employee records management, payroll processing, benefits administration, and compliance management.

  2. HRM Suites — these are touted to be holistic HRM suites that comprise all basic features inherent in core HRs along with capabilities such as talent management, performance appraisal, and recruitment modules, amongst others.

Task-specific SaaS HR solutions

Apart from the core HRM suite alternatives, there are also task-specific SaaS HR solutions that cater to each specific need in human resources, such as:

  1. Recruitment software — used for performing operations necessary when hiring employees, like posting job openings and easily tracking applicants.

  2. Performance management software — helps manage employee evaluation, goal setting, and giving feedback.

  3. Time and attendance software — is good at monitoring employees' working hours, absences, and leaves.

  4. Learning management software — designed for employee training and development programs to enhance skills.

  5. Benefits administration software — utilized for handling benefit programs for a workforce like insurance policies or retirement plans.

Tasks that SaaS HR software can solve

The following are some of the HR functions that SaaS HR software can assist with:

  • Maintaining essential employee information, from personal details to employment history, in an accessible place.

  • Processing complex salary calculations with tax deductions and payments for timely and accurate payouts.

  • Posting job openings, receiving applications, and streamlining the onboarding process.

  • Keeping track of employees' performance evaluations. 

  • Setting goals for employees as well as giving feedback regularly towards enhancing productivity.

  • Ensuring compliance with labor laws or regulations to protect business ways through legality applied to its HR practices.

  • Tracking employee work hours accurately, processing time-off requests, and computing attendance-related information.

  • Developing a culture of continuous learning for employees by providing them with courses, workshops, and skill enhancement programs.

  • Managing the administration of benefits such as healthcare plans offered to employees along with their retirement schemes or leave policies.

Benefits of HR SaaS software

Not in vain do many believe that HR SaaS software is a time-saver. Let's look at several advantages of the SaaS HR system that it brings to the table.

Little paperwork

The ongoing digitalization renders paper obsolete even for the HR position. The software automatically arranges all employee records and forms, eliminating physical paperwork. This not only saves time but also helps in going green.

Better communication

Half of HR's work is based on communication. The HR SaaS software allows quick scheduling and provides automated updates and reminders to the staff so they don't need to note important calls and information.

All-in-one data storage

Centralizing HR data simplifies processes as you don't have to shuffle through numerous platforms. HR SaaS software provides a place where all the different types of HR-related data can be stored, and there is no more need to move between systems or paper files.

Faster employee testing

One HR is often responsible for testing a tone of people. It may be burdensome if you don't have software at hand. With features that enable online assessments, automated grading, and other things, HR SaaS software allows faster testing procedures.

Access to advanced analytics

Data-driven decision-making is the new-age approach of HR. The HR SaaS software comes with advanced analytics and reporting tools. These tools generate reports that provide insights to help HR professionals make intelligent decisions and identify future trends.

Hassle-free compliance management

Labor laws and regulations cannot be compromised when it comes to compliance issues. The HR SaaS software simplifies compliance management by automating processes, keeping up-to-date with legal changes, and generating reports related to compliance matters.

Higher employee autonomy

Such software is often valued for its self-service capabilities, meaning that the staff can work independently. This feature allows employees to update personal information, access pay stubs, request time off, and enroll in benefits, among other tasks, without the need for HR staff intervention. It lightens the load for HR personnel a lot.

Cost savings

It may seem you fork out on the additional facility, but in fact, you reduce long-term expenditures that would drag your projects down. Among other advantages that custom SaaS HR software has is that it saves cost on paperwork expenses and speeds up processes, which brings your company more profits.

5 key features of SaaS HR solutions

The functionality of such software can be different based on what each business focuses on. We have outlined the five key features of SaaS HR software that are frequently present in such systems:

Application tracking and recruiting

SaaS HR solutions make hiring easier with features that enable your HR team to post job listings, keep tabs on who has applied, and compare assigned test tasks. This way, you can spot talented candidates and evaluate their suitability for your company.

Employee administration

Assisted with such software, HRs make workforce management easier as well. They can now provide faster onboarding and offboarding for employees, maintaining all vital details about staff in a single place, so there is no need to shuffle through stacks of spreadsheets.

Performance management

SaaS HR software offers tools to set goals, follow up on progress, and do periodic reviews. Such structured performance helps judge employee effectiveness while helping understand areas of improvement or rewarding star performers.

Payroll processing

Another functionality these systems have is automated calculations of the entire range of the payroll, from taxes to deductions and withholdings. These are also integrated with time-and-attendance tools that assist in easily recording employee hours for accurate pay.

Employee self-service portal

Self-service capabilities are an effective way to lift workload from the administrators' part. Special portals provide employees access to HR data, so the HR doesn't need to micromanage the team.

Key challenges of a SaaS HR software you should consider

Despite its many benefits to companies, integrating SaaS HR Software can also be risky for several reasons. Read on to find them out and be able to prevent them or find an actionable solution to the issues.

Integration complexity

Sometimes, fitting a new piece into an existing puzzle is impossible when dealing with SaaS HR software. You have to ensure that all your tools work in harmony. You'd better check your software for compatibility issues because overlooking them can result in extra costs.

Data security concerns

Companies often suffer from data leaks as their information is vulnerable to scams. The safety of operations you perform can be undermined if you neglect proper security estimations.

Scalability issues

Your HR software needs to scale in hand with your business. Scalability issues can arise if your SaaS HR software cannot keep up due to outdated coding mechanisms. Make sure it can grow along with your enterprise without hiccups.

User adoption hurdles

When introduced to the team members, your idea may receive pushback. The fact of user adoption difficulties exists since some employees resist change. Good training and support will solve this problem, though.

Regulatory compliance

Staying on the right side of the law is non-negotiable. Regulatory compliance is always a concern for businesses, but it still needs to be followed rigorously. You have to ensure your SaaS HR software ticks every box for relevant regulation.

Customization limitations

Every organization's different, and sometimes, off-the-shelf solutions just can't fit like a glove. When you're stuck with software that cannot be tailored precisely to your needs or might not be sufficient for further projects, consider changing it for a solution with advanced functionality.

Performance optimization

Last but not least, there's a performance optimization factor that can hold your software back. When the software code is weak, the entire system does not operate as smoothly as it could, so ensuring it operates efficiently, even at peak use, is essential.

8 steps how to calculate the ROI of SaaS HR solution

1. Identify costs

First, identify all costs associated with your chosen SaaS HR solution. This includes upfront implementation expenditure, ongoing subscription fees, training costs, and other related outgoings required for running it.

2. Calculate savings

Do an estimate of the time savings the SaaS HR solution will bring. It might be reduced time spent on manual HR processes such as payroll, benefits administration, and recruitment. Talk to HR staff and other relevant people to gather data about time saved.

3. Make sure employees are on board

If you plan to spice up your SaaS HR software with additional features, assess whether these functions would improve employee satisfaction. Some workers may be loath to change their operations or take longer to get used to it.

4. Count compliance benefits

Take note of regulatory compliance standards such as GDPR, HIPAA, or industry-specific regulations. Calculate potential savings based on non-compliance fines and avoiding legal fees.

5. Calcxulate ROI

  • Determine all costs related to your SaaS HR solution, including implementation, subscription fees, and training expenses.

  • Calculate the total financial benefits from your SaaS HR solution, such as cost savings and productivity gains.

  • Subtract the total costs (from Step 1) from the total benefits (from Step 2) to obtain the net gain or loss.

  • To express ROI as a percentage, divide the net gain or loss (from Step 3) by the total costs and multiply by 100. This gives you the ROI percentage.

6. Do a payback period analysis

The payback period is your initial investment recovered from the benefits that accrue from using your SaaS HR solution. It can be derived by dividing the initial investment by the annual net cash inflow (benefits minus costs).

7. Factor in non-monetary benefits

These include qualitative enhancements like employee satisfaction, improved compliance, and process efficiencies brought about through the use of your SaaS HR solution. Though these may not have a monetary value per se, they add up to the overall ROI.

8. Stay updated

Maintain continuous vigil on the performance and impact of a SaaS HR solution over time, updating your ROI calculations as it may be required to ensure that the investment continues to be justified.

6 best SaaS HR solutions

If you search for the most reputable examples of SaaS HR solutions, the web has much to show you. We've cut them down to six role models that help HRs worldwide to optimize their workflow.


This solution is user-friendly and has a reputation for being so. It does great management of employee data and job applications and also has performance tracking in place. You can run your HR functions here, irrespective of the size of your business. The price varies depending on the plan, but they offer a free price quote if you request.

Workday HCM

Workday HCM is a huge find — particularly if talking about big companies. As an all-in-one solution spanning HR, payroll, finance, and more, this one's hard to beat functionality-wise. It boasts powerful analytics tools that make it popular with large organizations. SaaS HR software costs for scaling companies around $45-62.


This one is tailor-made for small to mid-sized businesses. It benefits management exceptionally well, keeps you compliant, and lets employees manage their HR functions. It's easy and affordable — perfect if your company is growing quickly. Their pricing starts at $35/month, which makes it a cost-effective solution for small businesses.


Small and medium businesses both like Gusto for their cloud-based HR solution. It offers excellent payroll processing, benefits administration, and compliance management. With a minimum monthly cost of $40, it's one of the most budget-friendly solutions available for growing companies.

ADP Workforce Now

Targeted at businesses of various sizes, ADP Workforce Now is an all-inclusive HR software. Its scope ranges from core HR and payroll to talent management and benefits administration. It is highly appreciated for its reporting and analytics tools that allow organizations to base their decisions on data analysis results, including building custom reports. Pricing depends upon company size and needed services.


Namely targets mid-sized organizations and is among decent examples of the best SaaS HR solutions. It offers better employee engagement and boasts an easy-to-use interface. The pricing considers how many employees work in your company and suits the growing businesses best.

When you should choose a custom SaaS HR solution

Thinking whether a custom HR SaaS product is the right fit for your organization? Here are the benefits of HR SaaS solutions tailored to your needs and a few drawbacks.

Advantages of a custom SaaS HR solution

  • Quality software will serve you long and will adapt to whatever you need in HR software.

  • A customized solution plays nicely with other systems and tools that you use at the same time. 

  • It makes HR operations more efficient and way faster, thanks to automation.

  • The software can be customized specifically to your business requirements and goals.

  • The investment in the software now saves your budget in the long run.

  • It offers greater control over data security that protects sensitive HR data effectively.

Disadvantages of a custom SaaS HR solution

  • The major con of customization is its high upfront cost because you have to invest more not only in development but also in testing grounds.

  • Development of a custom SaaS-based HR solution can be time-consuming, so don't wait for everything to happen overnight.

  • Your custom SaaS HR solution is bound to your development team. Losing developers or experiencing delays may bring risks that become hard to absorb.

  • You are responsible for ongoing maintenance, updates, and support, requiring dedicated resources.

Consider Dworkz as your trusted partner

If you are looking for a software development partner to craft your HR SaaS solution, you can turn to Dworkz. We thoroughly examine your requirements to create custom-made systems with high compatibility and scalability standards. We grow with your organization and keep adapting every time you evolve. At the same time, you can use us to perform daily operations, having confidence in our quality. Book a consultation with us to discuss all the software-related matters and see how we can benefit your company.


What are the recommended integrations for SaaS HR solutions?

There isn't any standard recommended set of integrations to have into SaaS HR solutions. It all depends on your organizational needs and requirements. But some of the common ones include payroll software, time tracking tools, applicant tracking systems (ATS), performance management software, and employee communication platforms.

What are the must-have features of SaaS HR software?

SaaS HR software needs to be equipped with features such as employee data management, payroll processing, performance management tools, recruitment and applicant tracking facilities, employee self-service portals, and reporting analytics. Compliance management features are also one of the most essential factors for legal adherence.

What are the success factors for the SaaS HR system?

The success factors for SaaS HR systems include effective system implementation, user adoption, continuous training, and frequent system upgrades. You should also focus on integrating SaaS HR solutions with an organization's strategy, data security and regulatory concerns, and the use of analytics to guide decisions.

How does the design affect the HR SaaS software?

The importance of creating a good SaaS UX design cannot be understated for HR software. A well-designed user interface directly impacts user experience, enhancing user satisfaction, increasing adoption rates, and reducing training needs.

What's so crucial about data analytics in SaaS HR systems?

Data analytics in SaaS-based HR solutions helps organizations make intelligent, hiring-wise moves in performance management and talent development. Analytics bring out trends, predict future needs of HR, and tell you how well your strategies for HR are working.

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