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Useful articles on HR and Payroll in Singapore
1 November 2018

8 things you need to consider before investing in payroll and HR management software



Choosing the right payroll and HR management software is a daunting task these days especially with myriad of applications it offers and options available in the market. To help you plough through the sea of choices, we have compiled a list of eight important things you must consider before you put your signature on the agreement between you and your chosen software vendor.


1.       What is in it for me and my company

Knowing your business objectives is the key to understand how your company can benefit from the software. Let’s be honest. Most companies look for software that can help them do minimum two things: save money, save time. For some, security is one of their concerns. Thus, software that you are looking for must be able to cut down workload, streamline and automate processes, secure, or even eliminate additional headcounts in doing the same job as the software does. All this sounds good on paper or even pitched to you enthusiastically by your vendor. But how true is it? Question your vendor. Or even better. Ask for demo. So that you can experience the benefits first hand.


2.       Focus on features that you truly need

Before your purchase, list down what are the must-have and nice-to-have features in the HR management software and then map them to your business objectives. This practice allows you to gauge your investment and how it can potentially impact your bottom line. Besides that, check with your vendor for bundle price. Ask for any additional adds-on that you need to take note of. If there are some bells and whistles that you don’t need, is the price negotiable or can they be converted to other value-added services such as customer support, on board training, or software headcounts.   


3.       Make sure the software is localized to meet local legislation requirements

Buying cheaper alternatives from overseas vendor may seem very tempting at first. On the surface, software offered by both local and overseas vendors, in terms of features, look very similar. However, with careful inspection, you will be able to distinguish these two apart. Localized Singapore HR management software not only allows you to perform HR management tasks, but at the same time ensures that you are compliant to the rules and regulations enforced in Singapore. Things specific to Singapore employment such as CPF contribution based on residence status and age bands, Make-Up Pay for NSMen, annual IR8A filing, tax clearance through IR21 filing, employee contributions to Self-Help Groups, employer payment for Skills Development Fund and Foreign Worker Levy, and as well as claim reimbursement for Government-Paid Leaves.


4.       Know who will be using the software

What is often overlooked while purchasing new software is who will be in charge of the software and how is the learning curve. In order to reduce the friction of picking up the new software, you can check with your vendor whether they provide on board training to new users.  Generally what you need to know here is how fast the new users will become proficient enough to start using the software to complete their tasks.


5.       Check compatibility of the software with your current system and integration with other functions of your business

If you are currently using your own accounting software, it is wise to check with your HR management software vendor about the compatibility of the software. Incompatible software will cause you more work and time to adapt data from one source to another, or worse, the data deemed completely unusable. Of course, the most ideal scenario is complete integration between the two software—which will ensure efficient and seamless data transfer.


6.       Check scalability of the software

To future proof your software, ask your vendor if scaling up or down of the software is possible. You do not want to be trapped in either of these scenarios: software fails to scale up to your expanded business needs, or software fails to scale down and leads to excess capacity and wastage. Remember, every penny counts.


7.       Make sure responsive customer support is provided

Being not able to get solutions for your enquiries can be frustrating. Check with your vendor if they provide support to your enquiries at any point you are using the software. Since not all contact centres operate 24/7, you also need to be aware of the operating hours of the support service and take time difference into consideration too if the support centre is located in a different time zone.


8.       Understand options you have if you decide to discontinue using the software

As is required by the Ministry of Manpower (MOM), employers must maintain records for all employees covered by the Employment Act and even after they leave your company. Depending on the environment of the software you purchase, you may or may not be able to keep the employees data, payroll and leave records as you discontinue using the software. In case where you can’t keep these information, you must check with the software vendor what options you have to back up the necessary records.