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3 Most Essential Tools Company Needs While Building The HR Department

When a company is growing it needs to get more organized. If the company is growing it also means it is hiring more people. A growing company needs a Human Resources department to take care of its employees and employee-related policies. HR is also responsible for many compliant related processes such as employee welfare, diversity, and inclusion, employee management, employee engagement, etc.

If a company wants to implement processes in the most effective way then it must use technology, as technology reduces human efforts and hence human errors.

When you are setting up a fresh HR department in your organization, there are things you will be dealing with on most days such as recruitment, employee salaries, etc. Hence, we have listed the three most important HR tools that a company would need to begin with.

Online Recruitment Software

When the company is growing it is also constantly recruiting. Recruitment is a highly collaborative process. It comprises multiple steps like candidate sourcing, resume screening, interview scheduling, employee onboarding, etc. Handling the recruitment process manually is redundant and very time-consuming. Using recruiting software or hiring software streamlines your hiring and saves HR from mundane time-consuming tasks.

With the digitization on the rise, online recruitment software is gaining momentum over an on-premise solution. Online recruitment software puts everything on the cloud which means you are ON 24x7.

Apart from digitization, Artificial Intelligence is also making its way into the recruitment industry. There are modern AI recruiting software out there that actually transform your hiring process by intelligently automating various phases of the hiring process.

Hiring software can also be integrated with various assessment tools such as technical screening tools, personality assessment tools, etc.

Payroll Software

Payroll service is a crucial task. Not just because it handles the salaries and payments of your employees but also from the compliance perspective. When you are paying out salaries you also need to take care of tax deductions, provident, pension, and insurance funds. A small mistake could raise questions with respect to compliance. Therefore, to rightly conduct all these processes in an accurate and lawful manner, factoHR, Payroo, Avanti, and many other automated solutions are available that handle the entire payroll process and give error-free results. But, if your HR is handling payroll manually then they must be spending tons of hours doing repetitive work. Not to mention the element of human error that could lead to bigger troubles. Save them hours by automating payroll services with Payroll software.

Sometimes companies prefer to outsource their payroll services, however, a minor glitch in the payroll processing such as incorrect salary, wrong deductions ultimately come back to haunt the HR team for rectification. If you do not have an automated payroll system then your HR may need to dig into piles of spreadsheets and documents to resolve such issues.

Performance Management Software

Performance tracking and evaluation is an important factor for every company. Employees need to know what is expected out of them and what they need to deliver. In other words, a company needs to set goals and objectives for its employees in order to achieve its own targets.

When you are trying to achieve something, it is always best to measure your efforts. Performance management is the system that helps you set the goals and then measure the performance of each employee against it. It even helps employees to know if they are on track with respect to set objectives.

The performance management tool documents everything related to performance evaluation. For example, at the start of the year, a manager and his or her staff can agree to set objectives that are in line with the organization's goals. They both can have periodic meetings to discuss the progress. A manager often gives feedback based on the progress of the staff. All these activities and communications are documented in a performance management system.

Nowadays many companies are following 360 degrees feedback which means everyone gives feedback for everyone, especially staff who gives feedback for their immediate managers. Peers give feedback to each other.

How To Choose Perfect Tools

Choosing a perfect tool is never easy. We often tempted to choose the most popular or the least expensive tool, however, what is most important is to understand your requirements first. Here are a few pointers that could help you choose the right tool for your company.

What are your pain areas?

First, identify why you need a tool. Is it because the tasks are mundane, time-consuming? Is the volume of work too high? Are you spending a lot of time on specific tasks such as resume screening if it is recruiting or payroll rectification while paying out to your employees? If you know your pain area then you would know the kind of solution you need.

Who is your audience?

Identify if a large part of your organization is going to be Millennials or Gen Z people? Why? because both these generations are different in the way they respond to processes. For example, Gen Z has never seen the world without the internet. They have always used smartphones. Hence, technology solutions are going to work for them. But at the same time, you need to make sure the tools that you are using are the modern ones. For example, if you are using a recruiting software that was built in the 90s' then it most probably follows the old processes. Now imagine if a 24-year-old wants to apply to your company and finds a 2-page application form? Many of these potential candidates are going to fall off of your radar. Hence, you must choose solutions that will appeal to its users.


As your organization grows you are going to need more and more tools in the future. You would want to integrate today's tools into tomorrow's software. Hence it is absolutely necessary that HR tools that you onboard also support integration.


If the company wants its HR team to stay ahead of the game they must incorporate modern HR technologies. It would not only improve collaboration and productivity among different teams but it will also attract top talent. It will help the HR team in building and retaining the top workforce.


1 : Why is it important for companies to have an HR department?

Answer : Companies need an HR department to manage various employee-related processes such as recruitment, employee welfare, diversity and inclusion, employee engagement, and compliance. HR ensures that the organization's workforce is well taken care of and policies are effectively implemented.

2 : What are the three most essential HR tools for a company building its HR department?

Answer : The three most essential HR tools for a company setting up its HR department are:
Online Recruitment Software: Streamlines the hiring process, from candidate sourcing to employee onboarding, and can integrate with assessment tools.
Payroll Software: Handles salary payments, tax deductions, provident funds, and more, ensuring accuracy and compliance.
Performance Management Software: Helps set employee goals, track performance, and document performance evaluations, fostering goal alignment and feedback.

3 : Why is online recruitment software beneficial for growing companies?

Answer : Online recruitment software streamlines the hiring process, saving time and reducing redundancy. It offers 24/7 accessibility as it operates in the cloud. Additionally, some modern AI recruiting software can intelligently automate various hiring phases.

4 : How does payroll software benefit HR departments in companies?

Answer : Payroll software automates payroll processing, ensuring accurate and error-free results. It handles salary payments, tax deductions, and compliance-related tasks, reducing the HR team's workload and minimizing the risk of human errors.

5 : What role does performance management software play in organizations?

Answer : Performance management software helps organizations set and measure employee performance against goals and objectives. It documents performance-related activities, facilitates feedback, and supports processes like 360-degree feedback, contributing to improved performance and goal alignment.

6 : How can companies choose the perfect HR tools for their specific needs?

Answer : To select the right HR tools, companies should:
Identify their pain areas and understand why they need a particular tool.
Consider their audience, especially if a significant portion of their workforce belongs to specific generations like Millennials or Gen Z.
Ensure that the chosen tools support integration to accommodate future needs and growth.

7 : Why is it essential for companies to incorporate modern HR technologies?

Answer : Incorporating modern HR technologies enhances collaboration, productivity, and attracts top talent. It empowers HR teams to build and retain a highly skilled workforce, stay ahead of industry trends, and efficiently manage various HR processes, benefiting the organization's overall success.


Amit Gawande is a Co-Founder of CVViZ, an AI recruiting software . He has extensive experience in software development and leading large teams. He has built products using NLP and machine learning. He has recruited engineers, programmers, marketing and salespeople for his organizations. He believes in using technology for solving real-life problems