What is a HRMS

HRMS is a streamlined, cloud-based system that allows HR professionals to manage employees and generate HR-related data with greater accuracy, efficiency, and ease thanks to automated processes and a centralized database. 

An HRMS (Human Resource Management System) is a suite of software or apps designed to support the human resources department. HRMS software basically automates human capital management, allowing HR staff to quickly store, update, and share information while creating accurate, data-based reports in real time. One system can streamline all core HR functions throughout the employee lifecycle, including onboarding, employee performance, benefits management, applicant tracking, and many other workforce management tasks.

Automation is changing the way businesses of all sizes operate. It allows the human workforce to accomplish more in less time while improving accuracy. HRMS solutions have the power to make sure all HR processes are completed in a more timely, efficient manner while freeing up time for staff members and offering employees greater transparency and convenience.

Key functionalities in an HRMS

When you chose the right HRMS and customize it to fit the needs of your organization, it has the potential to minimize or even eliminate HR paperwork. One system can coordinate workflows within the HR department while keeping all levels of management and employees up to date on critical HR policies and data.

Some functionalities commonly covered by HR software include:

• Onboarding and offboarding

• Performance management

• Data management

• Benefits administration

• Job applicant tracking system

• Time-off requests and schedule adjustments

• Succession planning

HRMS applications often tie into other systems. For instance, they may integrate with payroll processing and many other HR systems already in place.

The best HRMS also allow employees to log in and complete a variety of HR tasks on their own. They can update their personal information, submit requests for time off, manage their schedules, and review their benefits at their convenience without meeting with HR staff.

HRMS vs. HRIS vs. HCM: What’s the difference?

These terms are often used interchangeably, but there are some key differences.

• HRIS stands for Human Resource Information System and is designed to save employee information on the computer rather than storing all information on paper. It's often limited to basic HR functionalities, like documentation management, employee data storage, attendance tracking, org charts, and compensation management.

• HRMS is the modern advancement of the HRIS. The best human resource management systems make it faster and easier to complete HR tasks, so they go far beyond basic information storage and organization. They incorporate all HRIS functions and more, like applicant tracking and learning and development functionalities.

• HCM stands for Human Capital Management and refers to tasks required for efficient employee management, starting with screening applicants to ensure the right talent is secured for each position in the company. It extends to effectively monitoring and tracking each employee from their compensation and benefits to scheduling, performance, and more.

Employee resource departments can use all of these systems to improve efficiency, enhance departmental productivity, and keep employees happy. Today, HRIS and HCM are effectively included in comprehensive HRMS systems.

Why should companies use an HRMS?

There are multiple benefits of replacing spreadsheets and manual HR processes with an HRMS software system.

1. Higher accuracy and speed of payroll management, benefits administration, attendance tracking, performance management, and more thanks to a centralized data storage

2. Faster and more cost-efficient recruitment process thanks to accurate applicant tracking, a resume database, and candidate screening

3. Better employee engagement and retention due to the reduced number of payment errors, onboarding optimization, self-service options

4. Improved headcount planning thanks to a more streamlined overview of your entire organization and a more accessible way to keep and update employee records

5. A holistic view of employee data, contributing to better talent management and succession planning, with on-demand reporting options for improved decision making

When do you need to implement an HRMS?

It’s time to embrace technology and transition to HRMS when any of the following apply:

• Accurate financial data reporting becomes too time-consuming because of duplicate and manual work

• HR workers are spending too much time helping employees with tasks they could easily complete on their own if given access to the system  

• Labor costs are escalating, and greater insight is needed to increase profitability  

• Insight into employee data could help HR management and stakeholders make critical decisions

• Your HR team could benefit from greater organization and transparency as your team scales and becomes more complex

• A more streamlined onboarding process could help retain top talent and organize the talent management process

• Inaccuracies in employee management and information reporting have cost the company money

HRMS can allow new hires to fill out initial onboarding paperwork from anywhere in the world. It enables employee self-service and improves time management for HR staff members. The system may even help managers by offering templates and guidance for more effective performance reviews. When any of these essential HR tasks become too time-consuming, inaccurate, or inconvenient, it’s time to consider a move to an HRMS.

How to get started with an HRMS

The first step is to review the HRMS systems available today and select the one with features that best match your needs. Many providers offer customization, allowing you to create a system that works for your needs.

If you need help managing your global team, request a demo with Deel today. We can help you onboard employees with less frustration and minimal expenditure.