June 14, 2018

HR Software often lies at the core of the business. The bigger the enterprise than higher it relies on the human resource management systems. In this article, we are going to show you how much does HR software development cost as well timeline for such project and what resources you’re going to need for the system development that truly empowers your human resources management. 


First of all, let’s deal with the types of HRIS (Human Resource Informational System) and how in general such solutions are used. HRMS can be used as a separate system and as a part of the complex ERP solution that controls all aspects of the organization’s everyday operations. Nevertheless, it is not that important whether these solutions are linked to the bigger system or not because linked and standalone applications have the same features set.

  • Speaking of HR software types, there is HRIS which is the general notion of the systems that deal with personnel management and have all the possible features including recruitment management, onboarding, staff management, employee development, performance tracking, payroll, bonus system, etc.
  • Also, there are HCM (Human Capital Management) applications which help HRs to manage onboarding, track performance and make it impactful for the salaries level. In simple words, the main purpose of HCM is to help to make staff happier with their job and develop employees to strengthen their professional skills, personal growth, etc. For instance Workday and SAP ERP HCM.
  • Another kind is HRMS (Human Resource Management System) which manages payroll, tracks performance, manages the workforce, tracks such things as vacations, sick leaves, etc. For example BambooHR.

HRIS combines human capital and resource management into an all-encompassing human resource information system which is given in our article as an example of HR software development cost.

List of The Contents


The success of a company relies on its human resources and its capabilities. Human resources are at the core of every business. If a business is successful, it owes it to its employees. Besides, running a successful business means having well-designed processes. Well designed and well-managed processes rely on tools that ensure that everyone within a company has the right information and is working with the right information. The human resource management system has evolved, and companies are now able to tailor the software to their needs and their culture.

This solution has made management simpler, employees and companies more organized. Aware of the importance of HR tools, many solutions are made available to satisfy the organization’s needs. Currently, many providers are engaged in HR software development. Their solutions are marketed and benefit from the undeniable need of companies to manage their human resources more effectively. Even though these applications were part of a big revolution, they are becoming increasingly limited as HR culture, and the way the company is addressing human resources management is changing fast. The first limitation comes from licenses’ costs. Acquiring this type of software may appear to be a good investment in the beginning, but then comes the cost related to the license. Besides license costs, such programs lack flexibility; they aim to serve a general purpose and become very limited when there is a need for customization. Each company has its processes and workflow, and it is impossible to have it manage every process.

Building a custom HR software enables the development of the application that fits their needs and frees them from the price of a license that eventually becomes very costly.  This solution offers a number of advantages. Moreover, it allows a company to define the functionalities it needs, and each organization can identify and design each feature according to its processes.

In general, the most popular features cover:

  • Payroll Management
  • Hiring and Recruitment management
  • Talent and career management
  • Wellness and rewards management
  • Time management

In the following section, we are going to see in more details each one of these functionalities.


Payroll management

This is undoubtedly one of  the most popular HR software modules as it manages several financial aspects of a business:

  • Salary paymentemployees take for granted the fact of receiving their wages within a defined period each month. This regularity influences the confidence of employees in the solvency of their employer. If the employer does not have the necessary tool to automate the payment, it may create a sense of uncertainty and instability for the employee. This feature allows each organization to automate the payment process and reduces paperwork considerably. Salary payments module enables an organization to pay their employees using their preferred methods, on time and instantly.
  • Taxes: depending on the states and countries, each business may have to keep records of its financial status for several years. Maintaining a paper version of these records can be cumbersome and difficult for the organization. Moreover, the company pays taxes according to its income. This feature allows an organization to store its financial records in one place to handle its taxes automatically.
  • Bonuses payment: Apart from salary, a company may also have to pay bonuses to its employees depending on the applied policy. This module allows a business to manage this payment and decide when employees will get paid.

Payroll software developers implement complex processes related to payroll like computing gross and net pay, apply tax regulation, etc.

Hiring and recruiting management

Hiring processes have evolved a lot these past few decades. Today, recruitment management system allows the HR department to:

  • Manage job posting: companies can advertise the job anywhere, and the application will be received in one place.
  • Manage applicants and application: recruiters can look into their database pools when looking for the right candidates. Information about potential candidates is saved in one place and can be browsed whenever it is necessary.
  • Manage recruitment processes: the hiring process varies from a business to another, this feature allows an organization to define its hiring process.

This module helps to hire faster and with more efficiency. The organization doesn’t start from scratch when initiating the recruitment process.

Talent and career management

This is an essential module of custom HR software. Human resources are at the heart of every business; managing talent gives the organization a competitive advantage. This module depends on the short-term and long-term goals of the business. In this module, we implement:

  • Organization’s process to evaluate and attract the right and best talents (skills)
  • Manage skills development
  • Manage employees’ replacement. This is complementary with hiring management module
  • Manage employees loyalty

A well-designed talent and career management help the company retain its best employees and attract excellent candidates.

Wellness and rewards management

This module is complementary to the talent management module. This module allows the company to manage and study different ways to improve employees’ experience within a company. Wellness and rewards may differ from an organization to another.

In this module, the following features can be implemented:

  • Performance management
  • Incentive management
  • Social activity management

Time Management module

This module allows to:

  • Manage requests for leave
  • Manage assignments according to employees’ availability
  • Manage time and control time spent on each project or assignment

The time management module enables the organization to have better control over its production and resource optimization. The time management can also help anticipate the needs in terms of recruitment, budget, etc.

These modules aim at different but complementary goals, from these modules we can identify the following advantages:

  • Reduced time in processes: by automating the most repetitive tasks, an organization becomes more efficient, and processes take less time to complete.
  • Centralized information: it becomes much easier to find information as it is stored in one place.
  • Accuracy: automation helps reduce errors and offers much more reliable processes.
  • Data security: since information is stored in a database, only the right persons with the proper credentials can have access to critical and personal information about employees such as their salary, their bank account, their address, etc.
  • Better fit for business:  since custom HR software is built according to the organization’s process, it is more suitable and optimized.
  • Enhanced employees loyalty

Now that we understand the HR software modules let’s discuss the cost of building such product.


Now that we have defined the modules to include in our Human resource management system, we are going to estimate its development cost. Since it is a web application or a mobile application or both, the HR software development process is exactly like any other web application or mobile application approach. The development methodology and the cost estimation technique used are similar to those used for web application development.

To sum up, during this cost estimation we are going to consider the system with the following modules:

  • Payroll management module
  • Hiring management module
  • Talent management module
  • Wellness and rewards management module
  • Time management module

Let’s first define the IT specialists needed to build this application. For the web app, we will need:

  • A project manager
  • Backend and Front-end developer: these developer roles include payroll software developers
  • QA engineer
  • System Administrator

Today, the way employees interact with their work have changed, more and more employees have access to their work and information related to their work through a mobile device. A mobile version of HR software can be useful. To develop an application with mobile compatibility we will need:

  • Mobile developer: iOS and Android developers

The product we are going to estimate is comprehensive. But what about more exact numbers? For these cost estimations, we will take average hourly rates for the development services in an offshore location, Easter Europe to be more specific. Also, in this article, you will find a comparison of the HR system development cost in Western Europe, Eastern Europe, and Northern America. So, here is an approximate cost estimation of the time, resource, and money you’re going to need to develop a human resource management system by an offshore software development company:

  • 2 back-end developers working full time for 6 months charging $25/hr.= $73 380
  • 1 front-end developer working full-time for 6 months charging $30/hr. = $36 690
  • 2 QA engineerworking full-time for 5 months charging $20/hr. = $61 600
  • 1 Project manager who manages the project from design to project closure for 6 months charging $30/hr. = $36 690
  • 1 System administrator working full-time for one week charging $25/hr. = $1 400

Additionally for the mobile application part:

  • 1 iOS developer working full time for 6 months charging $31/hr. = $36 690
  • 1 Android developer working full-time for 6 months charging $30/hr. = $36 690

The overall HR software cost will be approximately $190 000.

SpecialistNumber of devsMonthsRateTotal
Back-end developer262548000
Front-end developer163028800
iOS developer163129760
Android developer163028800
System administrator11254000
Project manager163028800

Whether it is a small, medium or a large business, this system is necessary to run internal processes smoothly. For small businesses, one single person generally runs all the operations, automating processes through HR management software for small business can be useful and helpful to manage processes more efficiently. A few decades ago, on-premise HR software would have been the only solution, and today cloud computing offers another possibility that can be a better fit for businesses.

On-premise HR software would run on internal software, which requires an investment in hardware and hardware maintenance. Thanks to cloud computing and SAAS concept, businesses can pay only for services they need by deploying a cloud-based product. Consequently, the cost of building and hosting HR software becomes more interesting. Companies only pay for hosting as their data grows.


Quality comes at a price, but it is not necessary to pay the highest possible cost to get reliable human resource management solutions with rich functionality for the small business or enterprise. In this section, we are going to compare the cost of the HR software development in Northern America, Western, and Eastern Europe to give you a comprehensive picture of the budget required to complete such projects in different locations.

SpecialistNumber of devsMonthsEastern Europe
Western Europe
North America (US)
Back-end developer26256580
Front-end developer16306580
iOS developer16317090
Android developer16306080
System administrator11255070
Project manager163065100
Total 187360 459200 601600


Building a custom HR software offers several benefits to an organization, whether it is personnel management system software for small business or large enterprises. Opting for a proprietary solution has the advantage of immediate use. However, proprietary HR solution is insufficient. Investing in a personalized solution that is suitable for internal processes becomes very fast profitable, it is a solution that is more adapted to the needs of the company since it is tailor-made for the company. It is a secure, optimal solution and streamlines the processes of a company, the investment may seem important at the beginning but the company has a flexible solution, and the cost takes place only during the implementation. This solution also responds to the scalability of the business processes, and each module can be readjusted as the needs evolve. One crucial aspect the organization may want to consider is cloud-based HR software. This solution will help the organization have better control over cost related to building custom HR software.

HR software development will make your operations better or become a popular product among human resource management professionals is not the simplest task but it is totally achievable with the well-designed product specifications document and clearly outlined HR software requirements. The rough cost estimation given in this article is based on our own experience of HR software development.

If you need help with outlining the specifications and requirements for your project or want to know the exact estimation of your project cost and time to complete – fill free to contact Existek. You can fill in the form via the contact page or start a discussion in the website chat to get a quick consultation.