HR Tech Stack: How to Build It + 8 Winning Tools
Being in HR is a full-time balancing act.
Your team handles payroll, benefits, offboarding, employee engagement, employee experience—the whole nine yards.
Juggling these acts effectively requires a bunch of tools that allow you to automate repetitive processes freeing up your time and saving resources. These tools make up your HR tech stack.
A strong HR tech stack is one of the top three priorities for 56% of organizations. Other 29% of organizations acknowledge that it is one of their top 10 issues, according to the HR Research Institute.
When used well, HR tech stacks can improve employee experience and productivity.
78% of organizations agree or strongly agree that's the case, according to the same research.
But here's the problem.
Finding HR tools for specific needs is easy, but finding the right combination of tools is not.
That's why we put together this guide so you can build a winning HR tech stack with the types of tools you actually need.
🧰 What is an HR tech stack?
An HR tech stack is a combination of integrated digital tools that help you automate repetitive processes, streamline existing workflows, and support a business's HR functionalities.
Some software like payroll, recruiting, and onboarding is essential, while other tools, such as recognition or career management, are dependent on your business's needs.
But the bottom line is if they should integrate because if they don't play nice with each other, you're in for a longer work day.
🏗️ How do you build an HR tech stack?
It's easy to get caught up in the latest HR trends and think you need all the shiny new tools. But without evaluating if these tools align with your business's goals, you might get stuck with software without real value.
Marilyn Gaskell, Founder & Hiring Manager of TruePeopleSearch, stresses: " It [i.e., needing to choose tools] has called for intentional focus. [I prioritize] what my company really needs and not waste useful resources purchasing tools according to modern-day trends."
Here's what to consider when building your HR tech stack.
#1 Identify your business needs
Map your current processes to tools you already have. Then see if there are any needs your existing software isn't meeting.
Next, identify processes that haven't been automated yet and check if any specific areas need immediate improvement.
#2 Prioritize your needs
Now that you know what kind of software you need, you need to prioritize processes that need to be optimized urgently and will have a bigger impact on the business goals.
Note: If your budget allows for investing in all the resources, you can skip this step.
#3 Set a budget
Knowing how much you can put into building your HR tech stack can make your search much easier. It can help you eliminate tools that don't fit your budget instead of spending time on product demos.
#4 Flesh out your needs further
You know what you need, but you also have to ask the right questions to help you choose between two similar tools.
For instance, you may want to create a checklist with these items:
- Is the tool easy to use?
- Does it integrate with our current stack?
- Does it meet the necessary security requirements?
- Can the tool scale with your needs?
#5 Train your team
Once you've chosen your tools and signed your contracts, it's time for implementation.
The most important step in building your tech stack is to train your team to effectively use the tools.
💡 Tip: Set aside time to teach managers and employees how to best leverage the software.
🤹 3 Core areas your HR tech stack should support
HR tech is a large category that includes tools to solve just about every problem you might have, but as we've established, you don't need them all.
Plus, if you're working with a limited budget, you should zero in on the three core HR functions—admin, talent management, and employee experience.
These include some traditional HR responsibilities like payroll and benefits administration.
What is payroll software?
Payroll software helps companies keep track of wages and rates and automates payment. The software calculates the total compensation and transfers the money from the company's account to employees.
Payroll software can include add-ons like time tracking, reporting, and tax management.
Should you invest in payroll software?
For small businesses with less than 20 employees, you may be able to handle payroll manually. However, it becomes prone to human error and time-consuming as you scale.
Invest in payroll software (even if you have a small team) as soon as your budget allows.
What is benefits administration software?
Benefits administration software helps you enroll and manage benefits such as 401ks, health insurance, and more.
These solutions also help keep track of data for cost and compliance purposes.
Should you invest in benefits administration software?
Typically businesses invest in benefits admin software when they have over 500 employees.
But even smaller businesses can benefit from automating the process freeing up time for other important tasks.
#2 Talent management
The entire process of attracting the right candidates, recruiting, and retaining new hires falls under talent management.
The most important tools you'll need include applicant tracking, onboarding, and performance appraisal software.
What is applicant tracking software (ATS)?
ATS makes the process of hiring seamless. It helps recruiters manage open roles by collecting applicant information in an organized database, enabling them to track candidates, schedule interviews, parse reviews, and more.
Should you invest in ATS?
An ATS makes the most sense for businesses with extensive hiring needs. Most companies invest in an ATS when they hit the 250-employee mark.
What is onboarding software?
Get onboarding right, and you can boost employee retention. Fumble it, and you're looking at high turnover rates.
Onboarding software can help you digitize all the paperwork, start onboarding early, and make the entire new hire onboarding process seamless.
Should you invest in onboarding software?
You should invest in employee onboarding software if hiring more than 10 employees per month.
What is performance appraisal software?
Performance appraisal software enables you to track and review employee performance. Managers can use this type of software to create goals and carry out performance review cycles.
Some tools also offer development planning add-ons, enabling employees to create individual employee development plans.
Should you invest in performance appraisal software?
Tracking performance and sharing feedback should be core HR processes regardless of company size. However, the larger the team, the more challenging it will become to rely on the good old Excel spreadsheets.
From a headcount of 40+, consider investing in performance appraisal software.
➡️ Check out our analysis of 8 of the best talent management systems on the market.
#3 Employee experience
The employee experience is perhaps the single most important function for HR teams. It covers all aspects of employee management, enablement, and engagement.
You'll want to look into learning and development (L&D) software, employee wellbeing software, and employee experience management software.
What is L&D software?
Continuous learning isn't just beneficial for businesses—employees are equally invested in career growth.
L&D software helps you streamline learning needs and creates the right opportunities for employees to absorb that information.
Should you invest in L&D software?
No matter the size of your business, L&D should be an integral part of the employee experience.
Look for a tool that can scale with your needs.
➡️ Check out the latest innovations in L&D software in our article detailing the best features and use cases of AI-based learning management platforms.
What is employee experience management software?
Employee experience management software is a digital tool used to create, organize, and improve the overall work experience of their employees. The software helps track, analyze, and proactively manage all employee interactions within an organization - from recruitment and onboarding to development, performance management, and offboarding.
Employee experience management software boosts employee engagement by collecting employee sentiment and turning that data into actionable insight.
Should you invest in employee experience management software?
As a smaller company, this might not be your number one priority. In fact, we do recommend prioritizing L&D software over employee experience management software.
However, if your company struggles with retention and engagement issues, such software might give you insights that can inform some well-needed changes.
What is employee wellbeing software?
Employee wellbeing software is a digital tool that provides features, resources, and programs designed to support and improve employees' physical, mental, and emotional health.
Should you invest in employee wellbeing software?
Investing in employee wellbeing software is a worthwhile decision for many businesses, and it may be particularly valuable in certain scenarios:
- When your workforce is remote and they lack meaningful connections at work.
- When your company has 200+ employees, it is challenging to track each individual's wellbeing.
- When you are operating in a high-stress and high-pressure industry (e.g., finance, healthcare).
🧰 For more tailored recommendations, check out our guides on HR tools for small businesses and HR tools for growing businesses.
🔬 Real-life HR tech stacks & Expert advice
We talked to 6 HR pros who shared their HR department's tech stack.
Vladimir Stepuro, HR Director at ScienceSoft, an IT consulting and software development company, shared his thoughts on the HR tech stack:
"As regards comprehensive HR solutions, I recommend HCM and HRMS tools. For example, SuccessFactors HCM and Dayforce offer applicant tracking and recruiting, talent management, workforce management, payroll, and benefits management. As for more specific tools, I recommend Breezy HR for recruitment management with applicant sourcing and tracking, resume parsing, automated interview scheduling, and reference checking, and LeaveBoard for leave management with tracking employee time-off and accurate tailored reports on annual leave allowances, time-off balance, and more.
With the growing role of the hybrid workplace, the adoption of VR for HR purposes will increase. VR-driven immersive experiences ensure that a video interview will be as engaging and impactful as an in-person interview. Also, VR can be effectively used in onboarding. For example, a virtual tour can be arranged for new hires where they can see the office and get to know their colleagues."
Ryan Yount, Founder of LuckLuckGo, recommends having the following types of tools under your belt:
- HR Information System (HRIS);
- HR Management System;
- task Management;
- identity and Access Management Tools.
Juste Semetaite, Marketing Lead at Toggl Hire, a 100% distributed company, has this in their HR tech stack:
- Toggl Hire for automated candidate screening via skills tests & asynchronous video interviews;
- Workable for applicant tracking and job post distribution;
- Bamboo HR for employee management and operations;
- Notion for internal wiki & employee onboarding;
- Donut integration in Slack for employee engagement & onboarding.
Lauren Cowan, a UK-based HR Tech Consultant at DayOneHR, shares a few niche tools:
"Juno is a cool tool that blends benefits and wellbeing together in a really interactive way. Another would be Bippit which has a great app to help support employees on all things financial wellbeing."
Steve Anevski, CEO of and Co-Founder of Upshift, a staffing platform backed by Recruit Holdings, recommends the following tools:
- TINYpulse for conducting employee engagement and employee satisfaction surveys. The responses can be easily evaluated through the metrics dashboard in the app.
- BambooHR for gathering and analyzing employee data, tracking attendance and paid time off.
Irene McConnell, a Career Coach, Hiring Manager, and MD of Arielle Executive, shares the following tools to build your HR tech stack:
- TalentLyft for recruiting;
- Workbright for onboarding;
- Rippling for payroll;
- Bonusly for employee engagement.
🔮 The future of HR tech stacks: Employee experience is the #1 priority
With employee experience becoming central to businesses, HR pros are beginning to align processes and workflows to deliver the best possible employee experience.
Plus, with remote and hybrid work becoming the norm, tech stacks are evolving to accommodate the future of work, recreate the physical office virtually, and connect employees with each other and leadership in new and interesting ways.
These factors have led to integrating VR, AR, and AI to create a future-proof HR tech stack that's immersive and easy to use.
Alari Aho, CEO of Toggl Hire, shares his thoughts on the future of the HR tech stack:
"The success of any company rests on its people. Hiring top-level talents can change the trajectory of a business, but the current hiring process isn't built for assessing job-specific skills. Hiring managers can only get a limited view of a candidate's on-the-job abilities by looking at keyword-stuffed resumes and evaluating past experiences. Some people are amazing interviewers but poor performers. We believe the future of HR tech stack includes a skills testing tool that helps companies hire the best-fit candidates for any role."
🤖 Discover the power of AI tools for HR processes. We compiled a shopping guide with 7 tools compared.
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Say goodbye to disconnected processes and hello to synergy. You'll have the power to align your people processes and achieve remarkable results.
📅 Ready to start evolving your HR tech stack? Talk to an expert at Zavvy today!