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How much does HR software cost?

Melissa Jones  |  10 August, 2017

There can be a number of challenges that buyers of HR software can face. Recent research has shown that a lack of time hinders the buying process, with 85% of respondents wanting to choose and deploy a new HR vendor within six months. This is closely followed by budget considerations which was identified as a challenge by 60% of HR software buyers. Despite this, the price of HR software wasn’t a factor that dissuaded HR professionals from making a purchase.

This clearly demonstrates that the challenge in buying HR software isn’t the price of the system itself but the lack of transparency when it comes to discovering what you will need to pay. Understandably, this is frustrating for HR professionals. Implementing HR software is one of the biggest investments that a small business can make. Not because it is expensive, but because it changes the way the entire business operates. No one wants to purchase a system that integral to the business without knowing the price, so how do you find out how much HR software costs?

With the development of cloud-based SaaS and subscription products, the pricing of key business systems, like HR software, has changed. You no longer have to pay thousands, or even hundreds of thousands, for customised HR systems that need to be installed and regularly updated by a qualified engineer. Instead, you can pay lower monthly or annual fees, setup costs are non-existent and the system is regularly updated without the buyer needing to do a thing. When put like that it sounds like a bit of myth, but this is the reality. With the pricing structure being so simple, it’s surprising that HR software companies aren’t more transparent about the price of their software. Let’s take a look at a few of the pricing structures that HR software companies use.

How much does HR software cost?

Plan-based billing

Plan-based subscriptions are common for SaaS products. Plans allow the HR software vendors to tailor the features of the software to the perceived size and needs of the company. These are often based on the number of people that the company employs. For example, small companies with less than 9 employees will probably not be looking for the same functionality as a company with 250 employees and this is reflected in the price. In this case, you pay a set monthly subscription fee that will remain the same until you go over the employee threshold set within your plan.

Price range: £9 - £199 per month with discounts for annual payments

HR software with this pricing model:

Per-employee billing

Per-employee billing is probably the most common pricing structure for an online HR software. This model sees you pay a monthly (or annual) fee for each employee in your organisation. Typically, the more employees you have the cheaper the cost-per-employee. This pricing structure can be very beneficial for small businesses as you’re paying exactly for what you're using and it also provides the flexibility for you to grow.

Price range: £2 - £15 per employee per month

HR software with this pricing model:

Free trials

It is worth noting that before you buy an HR software the majority will offer a free trial which will enable you to check out all of the features and functionality before you are committed to making a purchase.

When you're looking to invest in HR software for your small business, its understandable that you need to do your research. A key part of that is understanding the price of HR software and ensuring that it meets the requirements for your business and that it provides a return on investment. This HR software buyer's guide has some great pointers on how to go through the process of buying HR software.

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