What is HRMS?

As the number of employees in an organization starts growing, the task of managing them and their data becomes difficult. Sensitive workforce information stays scattered in multiple folders and locations. Integration is much of a manual task. Screening, hiring, onboarding, payroll management, training, engaging candidates, keeping track of attendance, etc. are just some of the functions that suffer owing to manual management. The efficiency of HR starts dropping down considerably.

HRMS - Role of HR

Role of HR

This is where the Human Resources Management System steps in with its suite of functionalities and features to automate the tasks of the HR department.

Quick Snapshot on HRMS – Human Resources Management System

As per Oracle, HRMS refers to a suite of software that organizations use to manage internal HR functions. From Employee Data Management to payroll, recruitment, benefits, training, talent management, employee engagement, and employee attendance, HRMS software helps HR professionals manage the modern workforce. Also called a Human Resources Information System (HRIS), HRMS systems put information about a company’s most valuable assets in front of the people who need them. Yesterday’s HR software and HRIS systems have become today’s Human Capital Management Cloud solutions.

Techopedia defines HRMS as “a type of information system (IS) that is designed to manage an organization’s computerized and automated human resource (HR) processes. It is a combination of hardware and software resources that hosts and provides most, if not all, of an HR department’s business logic.”

According to Kissflow, HRMS is an array of software including Human Capital Management (HCM) and Human Resource Information System (HRIS) that help HR staff take care of an organization’s most valuable assets, people. HR tasks are too complex and time-consuming when performed manually.

Kissflow HR Cloud was built with the purpose to administer all HR-related activities from one central location. It combines agile core HR functionality with actionable insights and a seamless multi-channel interface.

Basically, HRMS is a digital personal assistant to do tedious work for HR professionals. An HRMS helps manage employee functions like calculating and communicating time-off, onboarding paperwork, and managing Employee Performance—which lets HR focus on more important, strategic work – BambooHR.

Gartner defines HRMS as “Business applications for the management of HR-related transactions, best practices and enterprise reporting. Functions typically include core HR tracking, payroll, and benefits. The scope is often extended to include recruiting, competency management, training, time management, performance management, and self-service offerings.”

To summarize, HRMS can be described as automation software that automates most of the tasks of the Human Resource Management (HRM) process. These include Candidate screening, interview scheduling, Recruitment, Employee Management, Payroll Management, Training, Learning and Development (TLD), Performance Evaluation, Data Analysis, and reporting, etc. It centralizes the entire HRM process and the data associated with it under one system.

BambooHR is an HRMS designed for SMBs. It has various features expected of HRM software including time-off tracking, applicant tracking, onboarding and a lot more. Zoho HR, iCIMS, UltiPro are some of the leading providers of HRMS around the globe.

Read More: What is HR Automation?

Why Every Company Needs HRMS in their Tech Stack

A survey by KPMG revealed HR departments are seeing the positive impact of HRMS and 80% of them will spend the same or more on HR tech in the years to come.

But it’s crucial for the higher management of any company to identify the exact needs relating to its HR functions before going for an HRMS. The management needs to ascertain its short and long-term goals. An HRMS may not be necessary for an organization that has less number of employees, but it may soon become a necessity once the head-count starts increasing. At that moment, having a department-wide meeting to discuss HRMS goals and road-map may prove to be a beneficial option.

There are numerous HR functions that HRMS can take care of efficiently. An ideal HRMS should have most of the below-mentioned components.

Components of HRMS

1. Application Management

Application Management involves tracking and monitoring job applicants across various job boards, recruitment portals, and websites. This is applicable throughout all phases (screen, shortlist, interview, and hire) of the recruitment cycle. HRMS helps in the process by allowing recruiters to collaborate seamlessly on a single interface and streamline the recruitment process.

Read More: 5 Ways to Improve Your Recruiting Strategy

2. Employee Management

Employee Management deals with storing all employee-related information – profile, role, work history, etc. HRMS as a platform helps store all the data at a centralized location. Eligible management personnel can then access and retrieve the data as per requirement, irrespective of their location.

3. Employee Self Service

Employee Self Service portal provides workers with access to all their own data in the organization. They get a complete view of important data including payroll, leaves available, attendance, etc.

4. Benefits Management

Employee Benefits Management on HRMS entails a birds-eye view of the benefits being provided to them and ways to manage common or employee-specific perks.

5. TLD management

Training, Learning, and Development form the core of any organization’s success, and of course, for the employees.

As per a 2018 report by CareerBuilder, “Hiring Forecast”, 66% of employees were ready to hire employees even if they lacked the required skills for the job, but were willing to learn.

A centralized hub for learning and training provides employees with the required skills and tech knowledge to perform better. Various types of built-in and custom-made training programs can be employed for the purpose. Worth a mention, Artificial Intelligence and Virtual Reality-powered training videos are having quite an impact on the sector.

6. Organizational Management

Has numerous functions like business processes, related reports, and compliance obligations that support the HR department with global workforce management tasks and employee relocations.

7. Workplace Management

Helps to plan and manage workforce properly between processes like recruitment, employee onboarding, employee engagement, learning & development, etc.

8. Payroll Management and compensation Management

Payroll processing is a critical activity for both the parties involved – the company and the employees. Salaries to be paid, taxes to be deducted, leave encashment, all come under payroll management which needs to have a thorough process in place. HRMS helps manage payroll and compensation-related tasks for employees spread over numerous departments and geographic locations.

9. Timesheet Management

HRMS can automate the timesheet management process of a company to scrutinize performance and integrate flawlessly with payroll management and other modules. It can also estimate costs sustained under certain parameters (department, employee, role, client, activity, etc.)

10. Performance Management

Performance Management on HRMS helps assign individual goals to employees and track/monitor those effectively and routinely. A global survey said American employees estimated their own personal productivity 11% points over normal. Having a centralized system that accesses their true performance helps get a clear picture of the performances and shortcomings.

Yet, Gartner says only 4% of HR leaders are assessing employee performance effectively.

Employee turnover is getting costlier day by day. Companies are churning out as much as 33% of an employee’s annual salary to replace him/her, as per Employee Retention Report, Work Institute. HRMS can help provide the company with insightful data so as to enhance employee retention by looking into the possible factors of employees leaving the company and working to improve in those areas.

11. Exit Process Management

At the time of an employee leaving an organization, the HR needs to perform certain exit formalities. These may include documentation, providing and asking for feedback, full and final settlement, etc. HRM system can assist the HR department with carrying out these formalities with ease.

HRMS may help organizations of today take the workload off the HR personnel. This will allow them to focus more on strategic parts of the business rather than indulging in recurring and time-consuming tasks.

Read More: HR Tech Primer: What is Employee Engagement?