What is Human Resource Management System?

Human Resource Management System, also known as HRMS, is a program designed to store employee documentation, e.g., their name, address, marital status, contact number, birth date, and so on.

It supports various functions ranging from recruitment and training to paycheck and other benefits. Human Resource Management System helps a company to understand its staff, keep the company updated about any change in labor and tax laws, and assist in cost-cutting and management of its employees.

Key Highlights

• Human Resource Management System, or HRMS, serves various functions such as overall employee documentation, managing payroll and benefits, recruitments, and improving organizational efficiency.
• HRMS provides task automation and allows customization as per the requirements.
• Some of the key features of HRMS software include data compilation for analysis, retaining talent, training employees, managing workflow, and performance evaluation.
• HRMS can provide numerous benefits to an organization, for example, improved employee morale and satisfaction, increased productivity and efficiency, reduced employee turnover and absenteeism, compliance with labor laws and regulations, and so on.
• Some of the popular HRM systems include BambooHR, Kissflow HR Cloud, UltiPro, and ZohoHR.

Why is Human Resource Management System Needed?

The Human Resource Management System has made work faster, more accurate, and more accessible. From managing attendance log to leave applications, HRMS manages everything with ease. Companies in the 1970s sought ways to manage the workforce, leading to the roots of human resource management. Today, companies need the human resource management system more than ever for reasons such as:

1. Maintaining Employee Database

The human resource management system helps maintain the employee database efficiently. Whenever HR requires anything, they can look up the information without taking too much time. HRMS also comes in handy during the hiring of new employees. The system can store all the details, such as education qualifications, work experience, benefits, and compensation, safely and securely without much trouble.

2. Managing Payroll

Today, payroll management is not limited to salary. It includes tax deductions, compensations, and leave encashments. HRMS can efficiently manage all this information. It optimizes the process and reduces the chance of human error. Payroll management is a very crucial element in a business’s success, which HRMS can easily undertake.

3. Overseeing New Recruitment

Overseeing the hiring process manually is time-consuming. People waste extensive time and energy that they could utilize for more productive activities. The use of HRMS can significantly simplify the hiring process by automating the process of sourcing, screening, documentation, and onboarding.

4. Managing Employee Benefits

HRMS manages employee benefits such as insurance, sick leave, accommodation, etc. It maintains records of employees, their overtime, bonuses, and reimbursements. It creates a sense of transparency between employees and the company.

5.  Keeping Track of Time

Employee dedication to an organization is crucial to a company’s growth and success. The first step towards this commitment is time management and attendance. HRMS comes with a smooth attendance tracking system that allows the company to track an employee’s leave count and attendance. This further helps in the smooth processing of leave applications by an employee.

6. Improving the Efficiency of the Organization

Human resource management dramatically improves the efficiency of an organization and brings transparency between employees and management. It also has features like employee appraisal, attendance, and disciplinary tracking systems. HRMS helps in realizing organizational goals and commitment.

How Does Human Resource Management System Work?

Using the human resource management system is easy, quick, and hassle-free. It works in the following ways:

Step #1: Automation

Human resource management systems help by automating tasks, organizing information about employees, generating data-driven reports, and much more. The software performs all these tasks, thus eliminating the use of paper.

Step #2: Customization

The unique thing about HRMS is that a company can tailor it according to its requirements. The company can customize and choose all the apps and features based on its needs.

1. Account Creation: The user needs to create an account on the chosen platform and set it up with a username and password in order to use the platform.

2. Data Sharing: In the case of multinational companies, having more than one or two branches around the world enables supervisors to get real-time information regarding various tasks like updates on recruitment, benefits, payroll management, etc.

3. Integration with Cloud: Users can access HRMS database data stored in cloud storage to ensure its security. A user can also integrate the data stored with other cloud storage applications.

Features of Human Resource Management System

HRMS is rich in functionalities; however, they vary from user to user and organization to organization. Some basic features of the human resource management system are as follows:

1. Compiles Data for Analysis

Compiling and analyzing data is one of the most tedious yet crucial tasks of the job. HRMS does this task in a few minutes and keeps the data secured. The human resource management system ensures that the data stored is completely encrypted and accessed only by registered users.

2. Helps in Retaining Talent

HRMS software can design talent retention data. HRMS analyzes all the information, tracks the behavioral patterns of the employee, and is even capable of forecasting future resignations.

3. Helps in Training Employees

With all the technological advancements, every employee needs to keep upgrading and learning new skills. HRMS helps in understanding those skills and even specifies the courses to be undertaken by the employees.

4. Manages Workflow

HRMS keeps the efficiency and productivity of the work intact. It can review work, issue notices, provide and ask for feedback, and explore the day-to-day objectives. The human resource management system reduces the time consumed for this work by half.

5. Helps in Evaluating Performance

The HRMS simplifies the process of evaluating any employee based on key performance areas. This brings transparency between employees and management and provides results that are completely unbiased and based on facts.

Benefits of Human Resource Management System

The human resource management system has the following benefits:

1. Insightful

By using HRMS, the management gets comprehensive data about its employees, which is rather difficult to gather manually. This increases efficiency in work and results in faster decision-making. When any company uses HRMS, it can also identify the existing gaps, the skills required, and the cost it will incur.

2. Enhances Employee Participation

The HRMS is an invaluable tool for understanding and retaining talent. It creates specified courses, mentorship programs, and personalized learning plans. The management can also develop employee feedback surveys to keep the employees engaged.

3. Inculcates Value of Self-Service

The management spends a considerable amount of time answering and solving the queries of their employees. HRMS can simplify this to a greater extent. HRMS can create a question bank where employees can find answers to all their queries and leave feedback. This way, the management can focus their time on other productive tasks.

4. Helps in Fast Onboarding

HRMS reduces the time taken to recruit new employees to a large extent. It does the process of sourcing and screening employees by going completely paperless. It also connects future candidates with recruiters on the basis of the job profile and experience required.

Top 4 Human Resource Management Systems

Out of the various human resource management system software in the market, below are the top four:

1. ZohoHR

ZohoHR completes the entire process with automation. From sourcing and screening to onboarding, this HRMS software is quick to work and hassle-free.

Features

• Stores all the employee’s data in one central location, making it easy for the user to access it when required.
• Contains a customized onboarding process that simplifies the hiring process.
• Possesses an inbuilt attendance tracker where the organization can track the attendance and leave of their employees and remain stress-free.
• The appraisal section, particularly, has various mechanisms to evaluate employees based on their key performance and results areas.

2. BambooHR

The software design of BambooHR is for small and medium-sized business entities. It provides various tools and features for any business to manage its employees’ data. BambooHR provides insight that helps strengthen the management and overall functioning of the company.

Features

• Facilitates eSignature in a hassle-free manner.
• Has an inbuilt application tracking system with various tasks like contract information and employee training.
• Possesses an employee self-service feature that acts as an employee handbook.
• Users can customize it according to their requirements.

3. Kissflow HR Cloud

The design aims to provide the user with a delightful experience with a simple and easy user interface. Moreover, users can access this service on whatever platform they wish.

Features

• Has built-in recruitment modules that maintain the log of recruited employees.
• Possesses special employee exit modules which allow smooth, hassle-free, and quick exits by employees.
• Provides personalized learning courses according to the skills of the employees.
• Contains an employee evaluation section with more than 7 types of evaluation criteria.

4. UltiPro

UltiPro focuses on intelligence and powerful learning. It provides results backed by data and figures that are accurate and easy to comprehend. It aims to increase the efficiency of the organization and the employees.

Features

• Transforms complex processes into simple templates by using smart and intelligent technology.
• The system has enhanced payroll management that records an employee’s salary, tax deduction, paid leave, etc.
• Contains a global HRMS network to provide long and continued support to the organization.
• Has a centralized benefits administration system, making it easy for the management to store all the required information in one single place.
• Offers personalized learning courses based on employees’ skills and understanding.

Tips for Choosing the Correct Human Resources Management System

Here are some points to consider during the selection of a human resource management system for any organization:

1. Understand Your Needs

There are several types of HRMS software, depending on the company’s size and requirements. It is important to understand your company’s requirements while selecting any service.

2. Take Help From Experts

It is advisable to seek guidance and clarity from the IT department of your organization when selecting HRMS software.

3. Do Thorough Research

Before making any selection, it is necessary to conduct thorough research. To gain more clarity, ask for a demo of the HRMS software. The HRMS you select should be able to perform all the tasks without any trouble and should comply with the changing laws and regulations

4. Do a Background Check of the Company

While choosing any HRMS software, remember to do a background check of the company. Talk with people who are using the company’s service, and consider their experience when making any decision.

Difference Between HRIS and HRMS

HRIS is the abbreviation for Human Resource Information System, which can store employee data by going completely paperless and saving hours and hours of time, while HRMS means Human Resource Management System, which also does the same job. However, there are quite a few differences between them:

Particulars	Human Resource Information System	Human Resource Management System
Definition	HRIS (Human Resource Information System) is simply a software application designed to manage and track employee data, including personal information, employment history, and benefits enrollment.	HRMS (Human Resource Management System) is also a software application that includes HRIS functionality and provides additional features such as recruitment management, performance management, and payroll processing.
Scope	Its scope is limited only to storing information about employees	The scope is not just limited to employee information. It can analyze trends and provide feedback which is not possible in HRIS.
Storage of Information	The information stored is never changing, like birthdate, address, etc.	It can store various information like payroll management, leave applications, etc.
Functions	Only administrative functions can be tracked.	All sorts of functions, right from administrative to performance review, can be tracked.
Purpose	The process is limited to creating job postings and receiving online resumes and applications.	HRMS automates the process and helps in decision-making.

Final Thoughts

The human resource management system is highly crucial. The time to keep track of every employee manually, making spreadsheets and uncountable folders, has passed long back. The human resource management system is safe, secure, and easy to use. There are various vendors in the business today, but the decision should be made with complete caution and consideration.

Frequently Asked Questions (FAQs)

Q1. What problems does HRMS help navigate?
Answer: The human resource management system helps to track every employee and other such additional information by automation. It helps in keeping the data together and can be accessed whenever required.

Q2. How to know if HRMS is effective?
Answer: The company name, its reputation, and the customer experience they provide are some ways to understand whether they are effective.

Q3. Who can use HRMS?
Answer: HRMS has various uses based on providers and organizations. They are generally used by HR leaders and staff members who need to keep the track record of every employee.

Recommended Articles

Here are some further articles to learn more:

1. Induction
2. Apprenticeship
3. Resignation Letter
4. Balanced Scorecard

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