Vacation requests via email, working hours in Excel spreadsheets, personnel files in filing cabinets – many companies know this all too well. Over 60% of German SMEs still manage their HR work this way. But when does switching to HR software really pay off? This comparison shows the facts.
The Quick Overview
| Criteria | Excel + Email | HR Software |
|---|---|---|
| Cost (10 employees) | ~$0/month | $100-160/month |
| Time effort/month | 15-20 hours | 3-5 hours |
| Mobile usage | ❌ | ✅ |
| Automation | ❌ | ✅ |
| Legal compliance | ⚠️ | ✅ |
What Excel Really Costs
Excel seems free. But the time spent adds up quickly:
Typical month with 10 employees:
- Processing vacation requests: 3-4 hours
- Recording and checking working hours: 5-6 hours
- Documenting sick leaves: 2 hours
- Preparing data for payroll: 4 hours
- Searching for and filing documents: 2 hours
Total: 16-20 hours per month
At an hourly rate of $45, this equals approximately $720-900 in pure labor costs. Add to this errors in manual calculations and inquiries from employees who don't know where their vacation request is.
Additional Hidden Costs
- Errors in overtime calculation or forgotten vacation days
- GDPR risks with insecure storage of personal data
- Missing time tracking (legally required since 2022)
- Employee frustration due to non-transparent processes
When Excel Is Sufficient
Honestly: Excel can work perfectly fine for some companies.
Excel makes sense for:
- Very small teams (under 5 employees)
- Simple working time models (fixed office hours, no shifts)
- When everyone works in the same office
- Low turnover and few vacation requests
As soon as teams grow, remote work is added, or legal time tracking must be maintained, Excel quickly becomes a burden.
When HR Software Pays Off
The calculation is actually simple: If you spend more than 5-6 hours per month on HR administration, software pays for itself within a few months.
Example calculation (10 employees):
- Excel: ~16 hours/month × $45 = $720
- HR Software: ~4 hours/month × $45 + $130 software = $310
- Savings: $410/month or $4,920/year
What Good HR Software Can Do
- Self-Service: Employees request vacation themselves via app
- Automatic Workflows: Requests go directly to the right person
- Mobile Time Tracking: Check-in via smartphone, even in home office
- Centralized Data: Everything in one place instead of 10 different Excel files
- Legal Compliance: GDPR-compliant, time tracking included
- Analytics: Overtime trends, sick leave rates, vacation planning at a glance
The Most Common Concerns
"It's too expensive for us"
Compare the software costs with your current working time. It usually pays off from 8-10 employees onwards.
"Our employees are not tech-savvy"
Modern HR software is intuitive to use. If your employees can use WhatsApp, they can handle the vacation app too.
"The transition is too much work"
Setup takes about 1-2 weeks. The time savings afterwards are permanent.
"Excel works just fine"
The question is: How much time does it cost? And what could you do better with that time?
Decision Guide: 5 Questions
Answer honestly:
- Do you spend more than 5 hours per month on HR administration?
- Do you have more than 8 employees?
- Does your team work remotely or in shifts?
- Are there frequent inquiries about vacation or working hours?
- Do you need to implement time tracking in compliance with the law?
3 or more "yes"? Then HR software is definitely worth it for you.
What to Look For
If you're planning the switch, look for:
- Cloud Solution: Access from anywhere, automatic updates
- Mobile App: For employees in home office or field service
- GDPR Compliant: Servers in Germany or EU
- Integration: Interface to payroll saves double work
- Support: Customer service in your language for questions
- Transparent Pricing: No hidden costs per user
Tools like Emplovia cover all important HR areas – from time tracking and vacation management to digital personnel files.
Conclusion
Excel isn't a bad tool – it's just not made for growing HR processes. From about 8-10 employees or with remote work, switching to specialized software almost always pays off.
The question isn't whether HR software costs money, but how much money and time Excel currently costs you. Usually the investment pays for itself within a few months through time savings alone.
Do the test: Track for one week how much time you really spend on HR admin. The result is often surprising.