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Choosing the best HRM software for your business or company can be difficult. While there are many good options to choose from, that in itself can be a problem, leaving it unclear which would be the best one to go with. When choosing HRM software, it’s best to measure twice and cut once. Weigh your options and make the right choice the first time.
Something that just about every modern business or company needs is software designed specifically for human resources management (HRM). The good news for companies is that the HRM software market is a relatively mature one, with many different providers and options to choose from. The bad news is that the glut of options can make it difficult to single out the better choices.
The HRM software available in 2025 typically all do the basic things pretty adequately, so the way they stand out is going to be a bit less about what features they might have. The best HRM software for you is going to be one that fits the locations you have, the size of your team and even the compliance needs you might have. Before we get into the nitty-gritty of what sets software like Factorial ahead of others, let’s have a look at what exactly good HRM software in Europe is likely to offer you.
What does good HRM software offer to European companies in 2025?
In a nutshell, good HRM software should handle the entire lifecycle of an employee in one place, all the while keeping their data secure and private, and for many companies, being compliant with regulations across a number of borders. HRM software can also be known as an HRIS (Human Resources Information System) or HCM (Human Capital Management) software, but these terms are relatively synonymous.
Good HRM systems typically offer the following things as a baseline:
- Onboarding and offboarding: Good HRM software will have all the necessary things to make both onboarding and offboarding of hires a simple matter for a company. This means templates, provisioning or deprovisioning checklists, tools for task automation, and tools for e-signature generation and holding.
- Employee records and other core HR functions: It’s important that all documents have a single master copy that can provide the truth of things like contracts, changes in employee circumstances (salary, location, title), and other important documents.
- Performance and talent: Frameworks for growth, goal and Objective and Key Result (OKR) templates and systems, review and feedback forms.
- Time management: Policies that align with local EU or UK regulations regarding time off, calendars with local and international holidays, and the ability to track other time off, such as sickness or paternal leave.
- Payroll handling: Native payroll management in the software, or plugin integration with other top European payroll software providers. This includes allowances for benefits and things of that nature.
- Overseeing recruiting: Everything from job posting to interviews should be easily managed and overseen within the HRM software. It should also be handled in a General Data Protection Regulation (GDPR)-compliant way.
- General analytics: HRM software should provide companies with a general suite of analytics tools that allow easy viewing of employee headcounts, attrition, time reports, compensation and Diversity, Equity, and Inclusion (DEI).
- Compliance and security: We already mentioned GDPR compliance, but good HRM software should be compliant with both UK and EU GDPR regulations. This includes things like role-based access, in-house security audits and robust data processing terms.
How do I know what’s best for my company?
Okay, we’ve just outlined a lot of things that good HRM software will typically have, and we’re about to point out some more provider-specific benefits, but how do you know what is best for your company? Well, that is largely going to be up to you; only you know the ins and outs of your business, but there are a few things you can run through to dial in your target.
- Where do you operate: Think about where you currently operate, and where you might be expanding to in the next year or two. This might narrow down your options.
- When in doubt, compliance wins: It doesn’t matter what other bells and whistles a software might offer; if it leaves you non-compliant, it may as well be a paper umbrella for all the good it will do. Check for advanced compliance features if necessary.
- Figure out which software is your anchor: You might already have great payroll software, so then you need an HRM that plugs into that, rather than software that does it all on its own.
- Money matters: While they might offer similar experiences, you might find one software is significantly cheaper, or cheaper over time, than a rival. There’s also no sense in overpaying if you don’t need to. Be realistic about what you need and what you will use.
- Test it!: You can’t know for sure if a software is going to gel with your management team or employees until they get their hands on it and start using it.
What are the best European HRM software choices?
Okay, that’s enough preamble. Let’s look at some specific providers and software that we think are among the best choices for HRM software for European companies in 2025.
Factorial, all-round mid-market heavyweight
Why have we put Factorial at the top of our picks list? Well, it’s built specifically with European SMEs in mind, and has existed for long enough that it is fairly mature. With that maturity comes a broad suite of HR tools that cover all of the features we listed above as things that great HRM software should have, and despite all of that, it doesn’t feel particularly bloated. It’s designed to be easy to use, it can be deployed relatively quickly and has a number of different price points that allow smaller companies to use it, but also allow them room for growth.
Factorial is also designed from the ground up with compliance for the European market. It has very transparent information about exactly how and why it is compliant, and makes clear distinctions about compliance levels for EU and UK markets. This is great if you operate in or plan to operate in a number of different countries across the EU.
Factorial will be a particularly good fit if your company:
- Is operating across a number of different EU countries and/or the UK and needs things such as a multilingual UX and localised holiday calendars and leave policies.
- Need native e-signature support tied to your HR systems. It also has excellently rated onboarding and offboarding workflows.
HiBob, designed for culture and fast-growth
HiBob, usually known as just ‘Bob’, is particularly popular among mid-market groups and companies in a scale-up. It is lauded for a useful and easy UX, built-in features to assist with culture-building and good people analytics tools. It does pretty much all of the things that we mentioned earlier are signs of a good HRM.
This software is very scalable, and the pricing changes depending on the number of modules required and the headcount of users. This means that smaller firms can often afford it, but can also upgrade their level of use if they grow. HiBob has a strong emphasis on security and GDPR compliance.
HiBob is likely to be a good fit for you if:
- You are a company that has teams that exist across multiple countries, and you want to increase the engagement between them.
- You need an HR backbone software system that has good integrations with other tools.
Sage HR, modular simplicity for UK and EU SMEs
Sage HR was formerly CakeHR and has a reputation built over time for focusing on all of the essentials, those things we discussed earlier, and doing so in a very modular way. This means that companies can pick and choose what they need or don’t, and pricing can be incredibly flexible depending on what gets chosen.
Sage is a good fit for companies that:
- Might already be using Sage as a payroll and accounting software, but want to expand without diverting from a trusted brand.
- Are small to mid-sized and want to jump into using some features immediately, but might want to add further things later.
Final thoughts
As we said, there are plenty of great options for HRM software for European companies; it all comes down to what exactly you might need. Each option has strengths in different areas, and there are really no wrong choices.
An important thing to remember is that while we may talk about better and best options, only you really know the detailed workings of your company and what will be best for it. The best HRM software is the one that you have researched and considered thoroughly how it can fulfil the needs of your company.
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