The HR software market has seen more than its fair share of change since our last project report, so we've revisited some common questions about HRIS, HRMS, and HCM selection on a bigger scale to see how much the buying experience has really changed.
Here is a summary of some of our main findings.
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1. The average budget per user for HR software is now around $14,440
In 2022 (when our last report was published), the average budget was $12,625 per user, or roughly $210 per user per month. That figure now stands at around $14,440 per user, or ~$241 per user per month…almost double the $7,542 recorded in 2020.
A user, in this case, is an admin in the HR or payroll team, rather than every employee using self-service. In 2025, the number of users equated to 4.7% of employees on average, rising to more than a quarter at companies with fewer than 50 employees. Spread across the whole workforce, the average budget comes to about $11 per employee, per month.
Budget per user rises with company size, from about $7,150 at companies with fewer than 50 employees to about $21,840 at those with 500 or more. Per employee, smaller companies budget about $15 per employee, per month, versus $11 for mid-sized companies and $5 for the largest, pointing to economies of scale as headcount grows.
Companies replacing an existing system also tend to budget considerably more than those buying their first, at around $23,830 per user versus $9,970.
2. On average, companies spend 15.1 weeks selecting HR software
Our last report found that HR software selection took 15 weeks on average. In 2025, the average was 15.1 weeks, so little has changed. The years in between tell a different story, however; selection time rose from 16.4 weeks in 2020 to a peak of 18.3 weeks in 2022, a year where a greater share of projects had narrower scopes.
On that note, company size remains the biggest factor. Those with 500 or more employees spent 19.2 weeks selecting a system in 2025, more than twice as long as those with fewer than 50. Mid-sized companies saw the largest swing overall, with selection time rising from 13.6 weeks in 2021 to a peak of 18.7 weeks in 2023, before settling at 16.4 weeks in 2025.
3. More than half of buyers intend to choose a system within three months
In 2025, 56.4% of buyers planned to choose a system within three months, the highest share across the period and up from 2022’s low of 41.3%. Meanwhile, the share of companies planning to take six months or more fell to 14.9%, its lowest level since 2020.
This sense of urgency is also reflected in how buyers research their options. Comparison content was the most requested type of content in 2025 at 41.2%, while requests for vendor profiles, prices and demos grew from 3.8% in 2020 to 16.6%, which suggests that more buyers are arriving ready to speak to vendors.
4. 84% of buyers now want a cloud-only HR system
In 2022, 98% of buyers were willing to consider a cloud system, and just over 70% would consider nothing else. Cloud-only demand hovered between 67% and 76% from 2020 to 2024, before peaking at 83.8% in 2025, while a further 15.2% of buyers were open to either cloud or on-premise deployment.
Demand for on-premise systems alone has stayed below 4% every year since 2020.
5. Greater functionality is the most common reason for buying HR software
Greater functionality accounted for 33.0% of all reasons given in 2025, up from 23.0% in 2020, and together with increasing efficiency it made up six in ten reasons. Consolidating disparate systems became far less common over the same period, falling from 15.8% to 6.7%, whereas better support for reporting and BI nearly doubled to 8.3%.
Core HR remains the most requested feature, listed in 87.9% of projects in 2025. Payroll (75.8%) and time and attendance (73.7%) followed closely, both well above the 58.9% and 65.2% recorded in our last report. Unsurprisingly, learning management has seen the fastest growth, rising from 19% of projects in 2020 to 33% in 2025.
6. UKG Pro and Zoho People are now the most compared HR systems
BambooHR and Workday were the most compared systems in our last report. In 2025, UKG Pro led with 9.8% of comparisons, followed by Zoho People at 8.7%, then BambooHR, Workday and Rippling at 6.5% each. Zoho People and Rippling are relative newcomers to this list, having first featured among the most compared systems from 2024 onwards
More buyers are also replacing an existing system; 77.6% were already using one in 2025, up from 60.4% in 2020. ADP was the most commonly replaced system, followed by Paychex, BambooHR, UKG and Paycom, which is likely to reflect the size of their customer bases as much as anything else.
Read more statistics including selection time, budgets and more in the full Software Path 2026 HR Software Project Report.
