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, 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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