What to Include in a Modern HR Toolkit?

The human resources department is a critical part of any business, with a broad remit including workforce management, payroll, and staff training. But how has the role of HR changed in the modern workplace?

Modern HR practices are based on the advancement of technology, the rise of remote and hybrid working, and a focus on employee wellbeing. Modern HR teams must cover everything from onboarding and performance management to establishing an inclusive workplace culture.

You can only keep up-to-date with modern HR tactics if you use the right tools, which means investing in software that automates time-consuming tasks, provides opportunities to boost employee engagement, and stores all documentation in one place.

In this post, we’ll look at what you need to include in your modern HR toolkit and what you should consider before choosing tools.

What to Consider Before Investing in an HR Tool?

There’s no shortage of tools for contemporary HR management. They’re all designed to improve the efficiency and productivity of your HR department, and many have automation and self-service features. But apart from the built-in features, what else should you be looking for?

Can It Scale with Your Company?

When you’re going to all the effort of picking the perfect HR tool, there’s no point investing in something that will only last you a short while. Whatever your company’s current size and ambition, you need a scalable solution to accommodate growth.

Will the software enable you to manage larger teams (potentially on a global scale) as your business expands? How easy would it be to add new features, modules, or users? Can the system integrate with the latest technology as part of your wider digital transformation?

You should also ensure that the HR software aligns with your goals and challenges. For example, let’s say you’re planning to scale the business by implementing a remote working model. A remote HR team won’t have the option of accessing employee data from office computers or filing cabinets or requesting information in-person. 

But with tools such as mobile accounting apps, they can access payroll data and manage expenses from wherever they are, staying productive on-the-go. This type of mobile technology automatically makes your company more scalable, as you can continue to grow your workforce knowing everyone is connected.

Does It Fit Your Current Budget?

The cost of HR tools can vary widely, depending on their capabilities—so your budget will be a significant factor in choosing a solution. Small firms might get by with software that covers the basics, while enterprise organizations will likely need the latest HR tools with more advanced features.

One of the options is an all-in-one Human Resources Management System (HRMS), which typically combines various processes such as recruitment, payroll and benefits management, and employee data collection. On the other hand, you might pick a modular tool like Sage HR, so you can choose the features you need.

Remember, modern HR tools should help you save money in the long run by reducing time spent on repetitive tasks. Most solutions are provided as SaaS (software as a service), where you pay a monthly or annual subscription to the vendor.

Can It Integrate Seamlessly into Your Current Tools?

Another aspect to look out for is the tool’s ability to sync with your existing tech stack. You might already use software that you’re satisfied with, such as a payroll tool or an applicant tracking system. So if you don’t want to change it, check that the new HR software pairs nicely with it.

Even if you decide to buy a comprehensive HRMS, you still might want to connect it with additional tools like Google Workspace for document management, Slack for internal communication, your Outlook calendar, or productivity apps.

What to Include in Your Modern HR Toolkit?

There’s no such thing as a one-size-fits-all HR tool, because each company will require slightly different functionality from its software. But we’ve compiled a list of the essential tools you’ll need to fit in with modern HR practices.

Recruitment and Applicant Tracking System

Every modern HR toolkit needs recruitment tools that streamline the hiring process and reduce costs. Applicant Tracking Systems (ATS) automatically post vacancies on multiple job platforms, track applications, and screen them for potential matches. They also store applicant data, schedule interviews, and manage feedback about the candidate experience.

During the recruitment process, HR managers can also assess potential employees' "cultural fit" by creating quizzes. This helps you identify candidates most compatible with your company culture, which is especially important when filling critical roles.

Payroll System

Automated payroll tools are vital for HR management, saving time and minimizing errors. The software should make it easy for HR teams to generate payslips and handle expense claims—and for employees to submit timesheets and track their earnings.

Tools like PaystubHero are designed with this in mind, offering a fast, reliable way to create accurate paystubs for small businesses.

Advanced tools can pull in timesheets and attendance data to calculate salaries automatically at the end of each payment period. For instance, Sage payroll software can sync with your accounting software program to provide payslips in minutes, as well as take care of tax deductions and pension auto-enrolment.

Salary and Benefits Calculator

While it's beneficial for employees to access their payment information easily, the numerous figures for taxes, deductions, and contributions can be confusing. To promote transparency, HR managers can create a custom salary calculator that explains annual and monthly payments.

Modern HR tools should also show and explain the various employee benefits your company offers. Consider adding a benefits calculator that helps workers to understand, compare, and choose options such as health insurance, retirement plans, and paid leave. And don’t forget to tell them about additional benefits, like a gym membership or cycle-to-work scheme.

Skills and Personality Assessment Systems

HR managers must continuously evaluate current employees' skills and personality types to determine whether a new hire will be a good fit. They can then see if anyone needs further training, ensure that those who excel receive the recognition they deserve, and iron out any personality conflicts within teams.

Using gamification, such as custom skills quizzes, is a good idea to inject some fun into the process and boost employee engagement. These quizzes can also assess progress and monitor employees' personal development.

Training and Development Tools

Training and development tools are a crucial part of the modern HR toolkit, whether you're upskilling to fill existing and future knowledge gaps or helping employees with their career aspirations. Your HR solution should have built-in training features or integrate with other tools like learning management systems.

If you can set up automated training and development sessions, employees can participate without disrupting their regular work schedule. You could also sync these tools with your onboarding system and set up interactive tutorials for new hires.

Leave Management System

A leave management system helps your HR team track vacation days and sick leave, making it easier to schedule shifts and rotas. With a shared calendar, everyone can see who's working on a given day.

Employees can request time off through a self-service portal, and you can accept or decline leave requests and send instant notifications. As with all digital tools, the system should be simple to use without a steep learning curve, so you can start using it immediately and benefit from the extra efficiency.

Employee Feedback and Performance Management System

Modern HR practices include giving and receiving employee feedback, not just at a yearly appraisal but as an ongoing process. Your toolkit should include a system for collecting and providing this feedback and encouraging employee recognition to boost morale and engagement.

You also need performance management tools to evaluate employee skills, set goals, and track progress—so look for solutions with automated time tracking and reporting, data visualization, and HR analytics.

By assessing the performance of employees and gathering a collection of employee insights, you can offer training where necessary, carry out succession planning, and ensure a positive employee experience.

Wrap Up

A modern HR toolkit is essential for the smooth running of the HR department and the company. Streamlined processes and efficient organization will save time and money and reduce the risk of errors and disputes, keeping everyone happy.

Effective workforce management and seamless communication help to increase employee satisfaction and can gain your business a competitive advantage by attracting and retaining the best talent. That's why optimizing HR should be part of your overall corporate strategy.

Embrace the digital world and look for tools that provide value for money, flexibility, scalability, advanced features, and expert guidance from the vendor. Modern HR tools and practices help you provide a better experience for the HR team and the employees they look after.