HR software, including core HR management systems, is in the midst of change. The rise of HR outsourcing is removing some of the software decision-making from companies and placing it in the hands of outsourcing service providers such as ADP and Convergys. Meanwhile, a host of smaller software vendors have been growing quickly by concentrating on talent management applications that help with tasks such as recruiting, employee development and performance appraisals.
Much of the upstarts’ business has come in the form of "software as a service" deals, in which companies access applications through the Internet and pay monthly user fees. This approach is touted as reducing technology headaches and lowering upfront costs compared with the traditional tactic of paying for "perpetual" licenses and installing software on company computers.
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