A Guide to Choosing HCM Software for Enterprise Companies

Nowadays, many HR professionals advocate for investing in quality HCM technology, particularly in enterprises with fewer than 1,000 employees.

They prioritize several aspects, including return on investment (ROI), local regulations, and customer service support.

Through this article, Mekari Talenta will provide a guide to choosing the best HCM based on recommendations from Gartner.

Why is HCM implementation important for companies?

The goals of HR and the overall business often differ when it comes to the HR technology portfolio, making it more difficult for HR leaders to choose the right cloud-based human capital management (HCM) software.

They must balance various business objectives, which often leads to poor decisions and high levels of buyer’s remorse regarding HCM software.

Adopting this technology remains a challenge due to configuration complexity, user role resistance to change, and a lack of internal resources with the necessary skills.
Companies may also face HR budget constraints and struggle to articulate the potential value of HCM implementation.

Therefore, enterprise HR leaders who want to implement HCM effectively should consider the following:

Align HCM software investment with company goals in response to shifting business needs. Evaluate how software providers or vendors can deliver capabilities that address current and future HR priorities, such as enhancing employee experience, improving data quality and reporting, and standardizing HR processes.
Enhance alignment between the new software and evolving priorities by assessing long-term sustainability after selecting a vendor—their future vision and roadmap, customer momentum, and available services. Consider these factors alongside projected employee growth and the organization’s readiness for digital transformation
Choose the right solution by evaluating the vendor’s track record in delivering business value on projects that align with their intended use—especially in practical AI implementation and rapid deployment capabilities.

Key indicators of a good HCM according to Gartner

Gartner defines human capital management (HCM) suites for regional enterprises with fewer than 1,000 employees as a set of cloud-based applications that provide functionality to attract, develop, engage, retain, and manage employees.

HCM software functions include:

Managing organizational and employee historical data, employee lifecycle processes, and transactional self-service for employees and managers.
Attracting and retaining talent through sourcing, applicant tracking, onboarding, performance management, and training.
Managing organizational structure through the creation, planning, and restriction of employee positions, and recording workforce data based on assigned roles.
Managing operational placement of salaried and hourly workers to track working hours and absences.
Assisting companies in managing regulatory compliance with labor laws and data storage agreements.

Essential HCM features

Administrative HR

Employee data, organizational structure, employee lifecycle transactions, role-based self-service, payroll and benefits administration.
May also include absence management, health and safety, and other additional features.

Talent management

Recruitment, onboarding, performance management, compensation planning, learning, and skills development.
Workforce management
Attendance and time tracking, as well as scheduling.
May also include task and activity tracking, budgeting and forecasting, fatigue management, and improving frontline worker experience.

Integrated HR service management

Direct and personalized access to policies, procedures, and program guidelines for employees and managers.
May also include integrated case management, knowledge base, digital document management, virtual assistants, and workflow management.

Employee experience

Functions that support the work experience, such as employee voice, employee well-being, coaching and mentoring, employee campaigns, and rewards and recognition.
Cross-functional enabling capabilities
Capabilities that leverage data from the interaction of the above features and are increasingly integrated into HCM suites.
Examples include talent analytics, HR virtual assistants (HRVA), and internal talent marketplace capabilities.

AI implementation

Includes machine learning, natural language processing (NLP), generative AI, graph technology, and other AI technologies to enhance HR processes and employee experience.

HCM Market Guide

The market for HCM suites is fragmented into several segments because company needs vary widely depending on their size and structure, geographic location, and industry.

As a result, vendors develop products targeted at specific combinations of geography, organizational size, and complexity level.

Due to differing preferences for functionality, levels of complexity, and price points, a product designed for an organization with over 10,000 employees will not be suitable for one with just 100 employees—and vice versa.

This guide covers HCM suites designed for enterprise companies. Below is Gartner’s Magic Quadrant chart that can be used as a reference.
From the chart, it’s clear that features related to administrative HR functions and talent management are the most commonly included across HCM software.

Vendor segmentation based on company characteristics

Challenges in managing HCM suites

Although HCM has seen wider adoption, HR departments still face numerous challenges in implementation and realizing value.
Some obstacles originate internally, such as difficulties in securing resources with the necessary skills.

However, many shortcomings also stem from the vendors themselves, such as failing to meet support commitments and not providing user-friendly platforms for configuration changes and integration.

The chart below highlights the top five challenges organizations face in managing HCM. Buyers need to take these challenges into account when evaluating vendors.

While the top five challenges remain the same as in 2023, their ranking has shifted in 2024. For instance, configuring and activating new functionality remains a significant hurdle, as reported by 61% of Gartner respondents.

This issue is becoming more pressing as companies need to adapt to changing regulations and vendor updates that support new technologies.

The second major challenge is ensuring adoption by employees, managers, executives, and candidates, with 49% of respondents citing it as an obstacle.
This figure has dropped significantly from 69% in the previous year, indicating that improved data-driven insights for managers, as well as better marketing to candidates and onboarding processes, have helped reduce adoption barriers in these roles.

Variation in offered features

HCM suite vendors have varying strengths and weaknesses compared to their competitors. Some offer broader payroll localization coverage, while others provide more advanced talent acquisition technology or are better suited to organizations with a large proportion of hourly workers.

During vendor evaluation and selection, buyers must determine how well the product’s functionality matches their organization’s needs and priorities.

For example, vendors focused on small businesses often do not offer strong capabilities in talent management, workforce management, integrated HR service management, or employee experience and engagement. They are also less likely to provide certain administrative HR features such as payroll processing.

Customers may also choose to outsource benefits administration and/or payroll processing, or continue using legacy on-premise payroll systems.

Organizations with fewer than 1,000 employees often have limited resources to maintain integrations, ensure data quality, or handle administrative tasks related to HR technology.

As a result, they tend to prefer all-in-one solutions from a single vendor over deep functionality, to minimize integration and administrative effort.

Balancing HR and business goals

In a survey conducted by Gartner, respondents identified two distinct sets of objectives—business goals and HR goals—when asked about the reasons behind investing in HCM technology.

Business goals tend to focus on pragmatic processes such as efficiency, compliance management, and risk mitigation, whereas HR goals are more visionary, aiming to improve employee experience and the quality of reporting.

Mekari Talenta: The only Indonesian vendor in the Asia market

Gartner presented 40 HCM vendors categorized by the location of their headquarters.

Among these 40 recommended vendors, Mekari Talenta is the only one from Indonesia to be listed by Gartner as a representative for the Asia Pacific and Japan region.

From a functional perspective, every vendor listed offers at least core HR and talent management capabilities as part of their HCM software, including Mekari Talenta.

Like other HCM vendors, Mekari Talenta also provides payroll functions, benefits administration, workforce management, ERP functionalities, and comprehensive on-premise implementation.

This research focuses exclusively on cloud-based HCM solutions, as they are the most common implementation option.

According to Gartner’s Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises, these vendors also have a significant customer base among companies with fewer than 1,000 employees.

For those looking to find the best HCM vendor that fits their needs, consider the following:

Align your company’s needs with the benefits provided by HCM technology. This includes improving data quality and reporting, enhancing employee experience capabilities, and standardizing HR processes to drive operational efficiency and organizational agility.
Increase alignment with evolving priorities by evaluating vendors with a clear roadmap and strong customer support as your employee base grows. Assess HCM solutions based on key criteria such as ease of integration, cost-effectiveness, and time-to-productivity to identify the best investment.
Choose the right vendor by evaluating their track record of delivering ROI from previous projects. Prevent frustration during implementation by reviewing the vendor’s tailored training strategies and change management support, which are critical for successful deployment and adoption by your company.

If you’re interested in exploring more features from Mekari Talenta, feel free to contact our sales team today and discuss your needs.