Open source HRMS: a complete buyers' guide

With any software that must meet your business needs, the question of customization arises - “can it do X’ No? Then can it be adjust to do X?”

Maybe your customization needs go no further than renaming a few text or data input fields and pasting your corporate logo and colors onto the homepage. At the other end of the customization spectrum is the ability to dig beneath the surface and change the actual code. And that’s the opportunity that open source HRMS offers.

If you’re tempted by that kind of freedom or simply interested in the idea of open source software, the following guide covers the key issues, including:

• What is open source HRMS and who should consider it?
• The pros and cons of open source HRMS vs. proprietary systems
• How much does open source HRMS cost?
• Which open source HRMS solutions should I consider?

What is open source HRMS and who should consider it?

“Open source” is simply software for which the license includes access to the source code, including the right to change that code to suit the user. In a sense, this is the ultimate in modification and customization, without the usual restrictions associated with so-called “proprietary” software packages.

Well-known and well-established open source applications include the Firefox web browser, the Apache server software, and the Linux operating system. Given its flexibility and relative freedom from restrictions, no wonder that open source versions of all types of business software have also been developed, including HR systems.

You may wish to explore open source HRMS options if:

• You have specific process and/or technology needs that standard systems cannot meet without significant customization at the coding level.
• On principle, you believe that software should be open to being changed and modified freely.
• Your budget is limited (most open source vendors offer a free HRMS, though not all open source is free – more details on that point below…).
• You have in-house software developers, are tech-savvy yourself, and/or you just like to code.

One caveat to be aware of… while a key benefit of open source HRMS is the freedom to change it, any changes are subject to the license, usually meaning that those changes are themselves ‘open’ and available to anyone who wants them. There are fine legal lines here that bear checking out, especially if you’re integrating modified open source HRMS with your own in-house software, effectively creating a single system. If this is a concern for you, a good source of further information to start with is the Open Source Initiative’s FAQs page.

The pros and cons of open source HRMS vs. proprietary systems

Open source legal issues

One caveat to be aware of… while a key benefit of open source HRMS is the freedom to change it, often the changes themselves are subject to the licence, usually meaning that those changes are themselves ‘open’ and available to anyone who wants them.

In other words, yes, you can rewrite the HRMS’s code to your heart’s (and business’s) content, but just because it’s now customized to your personal requirements doesn’t make it yours – you don’t own it.

Thanks to open source software, we now have the term ‘copyleft’ as an addition to copyright. In a copyleft license, you don’t owe royalties for usage if you adapt the software but if you distribute your adapted version, it will be covered by the same license as the original (a good example of this is the widely-used GNU General Public License). Furthermore, you cannot place any further restrictions on its use. An open source licence means it can be used or adapted by anyone, in any field or sector.

Most open source HRMS is distributed under a copyleft license. However, some comes with a so-called permissive license. Simply put, this is a non-copyleft open source license that permits (often with limitations) using the amended code as part of a proprietary software. An example of a non-copyleft open source license would be the BSD license.

There are fine legal lines here that bear checking out, especially if you’re integrating modified open source HRMS with your own in-house software, effectively creating a single system. If this is a concern for you, a good source of further information to start with is the Open Source Initiative’s FAQs page.

How much does open source HRMS cost?

Is free really free?

Upfront, the answer is yes. For example, with open source suppliers like OrangeHRM, you just download and go. No money changes hands. However, as and when your business needs change – perhaps due to significant expansion, or a strategy of increased HR automation – you may find those needs quickly outstripping the free software’s capabilities. It’s entirely possible that you find there would have been less pain (including financial) if you’d gone for a more scalable proprietary system in the first place.

Get more HRMS pricing information with this free HRMS pricing guide

Furthermore, even a free system may carry some hidden costs within its TCO (Total Cost of Ownership), such as:

• Installation – whether you install and setup yourself or contract the supplier or an independent consultant to do it for you, there’s a cost (though the latter option will probably be more expensive in actual money terms).
• Support – so far, open source HRMS companies are mainly focused on small to medium businesses and so do not have large dedicated support teams, and what support they do offer may not be included in the ‘free’ license, instead being a paid extra service.
• Advanced features – as mentioned above, the basics may be free but more sophisticated open source HRMS functions, if they exist at all, are likely to be paid for (the code may be freely accessible but that doesn’t always mean it is free in currency terms).
• Training – many open source suppliers are smaller companies and as such put their resources into development; creating training documentation (or documentation of any kind, for that matter) may be a secondary concern. As well as the cost of staff time spent undergoing user training, you may have to invest in designing training guides and materials.

Preparing to take full advantage of open source HRMS

Open source is popular; it may even have a kind of cachet or appeal in certain circles: the in-built sense of community, the freedom (often including the freedom from a price ticket), and the flexibility can be highly attractive. However, if you want to make the most of your open source HRMS, there are some practical considerations…

• You need a very clear and specific vision of exactly what you want the system to do. Flexibility is great, but how are you planning to use it – What systems will you connect to? What processes will you change? How precisely are you planning to make it unique to the user?
• You also need access to a skilled software developer. Maybe that’s you or someone else in the business, or maybe you’re outsourcing or hiring a freelancer. If they are a ‘hired gun’ then bear in mind that you won’t have the knowledge in-house of how the system was customized.
• Preferably, you want an HRMS that comes with a supportive and well-established developer community – access to a large group of people with intimate knowledge of the software can make a big difference.

Which open source HRMS solutions should I consider?

Though your business requirements will, of course, determine which suppliers are best for you, the following is a short list of the more established open source HRMS options:

Use our free online comparison tool to compare these with other HRMS

• iceHRM – as with OrangeHRM, three versions – free, Pro and Enterprise – all with full access to the source code; the free ‘lite’ version offers the basics: a database, attendance tracking, time sheets, an employee directory, and report.
• Odoo – not only an HRMS, Odoo is an open source suite of business systems, including ERP, CRM, and project management; the HRMS app includes an employee directory, time and leave management, and also some recruitment and staff survey functionalities.
• Open Baraza HCM – another option that goes beyond the basics functionality, offering talent management as well.
• Open HRMS – geared for small to medium-sized enterprises, Open HRMS offers an HR database and administration, a payroll module, benefits, attendance and leave management, HR metrics and reporting, and even some performance management functionality.
• OrangeHRM – probably the longest-running open source free HRMS with ‘pay-for’ Professional and Enterprise options too.