Is Free HR Software the Missing Piece for Your Company?

By OrangeHRM | Published on Dec 10, 2021 | minute read

The Future of HR Management

HR management is not simply maintaining employee records anymore. HRM over the years has evolved into being one of the most important departments helping to direct human resources towards achieving organizational objectives. 

At the top of the HRM cycle, increasing competition for the best talent is pushing HR departments to have robust recruitment and onboarding processes. When hiring, it’s necessary to process candidates quickly by avoiding clutter and the possibility of accidentally losing out on applicants as a result of managing recruitment via traditional methods such as email. This is an instance where an HRMS comes into play with recruitment management features that allow you to maintain applicant databases, create workflows, create applicant filtering, add notes, and progress shortlisted candidates in the workflow in just a matter of a few clicks. That is why 78% of hiring managers feel that a recruitment system (ATS) has helped them acquire the best talent much faster than traditional methods (G2).

Afterward, when the candidate is hired, it’s important to have a culture that ensures the employee will be happy and will progress in their career. Studies have found a direct impact on employee retention and performance when a positive culture is present in an organization (Forbes). One aspect an HRMS can help in developing a positive culture is through performance appraisals that allow HR teams to get timely insights about employees and take prompt action on those who are struggling with so much less time and effort than paper-based performance appraisals. 

In addition to that, an HRMS also allows to maintain a digital employee database instead of Excel sheets, allows employees to easily apply for PTO and supervisors to approve/reject the request in a few clicks, and allows employees to change personal information through self-service facilities, maintain a corporate directory with contact information of all employees for easy access, track employee time to identify needs for productivity improvements, generate reports to get key insights on employees and so much more.

Why Free HR Software?

Two of the common roadblocks for most small and medium-scale businesses from adopting an HRMS are the inability to pay for an advanced solution or the reluctance within the management to adopt an HRMS. However, what most organizations don’t know about are the multiple savings that it can generate for the company in addition to the benefits mentioned above. Below are a few such takeouts from the OrangeHRM ROI document.

  • Save $16,000 and 500 hours per year on people management
  • Save $30,000 per year on training costs
  • Save $14,900 on recruitment costs
  • Save $768 per employee and 120 hours per year on manual payroll errors

While these savings are very appealing, you still might not be able to afford a fully-fledged HRMS as a growing organization. That is where free HR software can help you capitalize on these benefits without requiring any financial investment. Therefore, free HR software can be recommended as a potential starting point for small and medium businesses that wish to digitize their HR department.

Why OrangeHRM?

In most cases, free software is restricted to a certain number of users or has a small range of features. On the other hand, when it comes to free HR-related software, most of them are stand-alone software for different functions such as recruitment, employee management, performance review, etc. requiring you to use multiple systems to run your HR department. 

However, the OrangeHRM Starter version which is a completely free and open-source software HRMS covers all these areas such as employee management, performance management, time tracking, PTO management, HR administration, recruitment, and reporting in one single place. On top of that, as open-source software, OrangeHRM Starter is free for life and allows organizations to add up to any amount of employees as users to the system allowing any organization to utilize the capabilities of powerful HR software to develop people and achieve objectives. 

OrangeHRM provides the option to use Starter free of charge on the cloud or to be downloaded via the website. 

Sign up for free cloud hosting of the OrangeHRM Starter here.

Download OrangeHRM Starter here.


  • What is an HRMS?

    • An HRMS, or Human Resource Management System, is a software solution designed to streamline HR tasks, including employee data management, payroll, benefits, and more, all in one centralized system.
  • What are the benefits of an HRMS?

    • HRMS offers several benefits, including improved efficiency, reduced errors, better data management, streamlined HR processes, enhanced employee self-service, and comprehensive reporting and analytics.
  • Are HRMS systems only available on the cloud?

    • No, HRMS can be deployed on-premises or in the cloud. Cloud-based HRMS offers the advantage of accessibility from anywhere with an internet connection, while on-premises solutions provide more control over data but may require substantial infrastructure.
  • How can an HRMS support HR management evolution?

    • An HRMS empowers HR departments to adapt to changing business needs, automate tasks, enhance decision-making through data insights, and ensure compliance with evolving HR regulations, making it a crucial tool in HR management's evolution.
  • Is HR software and HRIS the same as an HRMS?

    • HR software and HRIS (Human Resource Information System) are closely related to HRMS. While HRIS typically focuses on data management, HR software can encompass a broader range of HR functions. HRMS often combines both HR software and HRIS capabilities.
  • How can HR software improve employee engagement?

    • HR software can enhance employee engagement through features like self-service portals, communication tools, performance management, and feedback mechanisms, fostering a more interactive and employee-centric HR environment.
  • Can an HRMS help with compliance and data security?

    • Yes, an HRMS can assist in compliance management by automating record-keeping, tracking certifications, and ensuring adherence to labor laws and regulations. Many HRMS also offer robust security measures to safeguard sensitive HR data.