HRMS - Human Resources Management System

The Human Resources department plays a strategic role in organisations in myriad areas—from salaries and wages to safety and risk management, training and development, strategic planning, and much more. For the efficient management of HR operations and processes, organisations can use a human resources management system (HRMS).

What is HRMS?

A human resources management system or HRMS is a collection of software applications built to support and manage the organisation’s HR functions and processes.  The human resources management system aims to improve the HR department’s efficiency and productivity by automating time-consuming and repetitive tasks.

What is the difference between HRIS and HRMS?

Human Resources Information System (HRIS) is a type of human resource management software originally used to maintain employee records. Today, HRIS includes many more HR-related functions such as training, recruiting, and so on.

However, an HRMS is more robust than HRIS, comprising both human resource management software and IT. HRMS goes beyond HRIS functions to include non-quantitative information regarding employees, such as employee satisfaction, employee induction, job performance, and more.

The functions of an HRMS

Most human resources management systems (HRMS) include the following functions:

1. Management of candidates:
   Related to the organisation’s employment offers and encompasses management of resumes, scheduling of interviews, making offers, and so on.
   
   
2. Employee engagement:
   Related to training and development, recognition of employees, helping them gain new skills, and so on.
   
   
3. Employee Payroll:
   Payroll functions include calculating employee wages and automating the issue of payments. Employee payroll self-service may allow employees to retrieve copies of their salary slips without requiring HR intervention. An example of payroll-focused HRMS Payday! HRMS is a cloud-based human resources management system allowing HR to perform payroll processes from anywhere.
   
   
4. Management of employees:
   Related to core HR functions such as recording and maintaining employee information, structuring workforce into different departments, and so on.
   
   
5. Optimisation:
   It can be used to optimise the organisation’s workforce. For example, it can generate data depicting manpower trends as well as the implications those trends may have on the business.
   
   
6. Workforce management:
   This includes tracking employee development, disciplinary actions, manager evaluations, as well as setting up workplace policies, and ensuring a healthy and safe work environment.
   
   
7. Contingent workforce management:
   Related to the workforce that is not full-time employed by the organisation such as interns, contractors, consultants, and so on.

The need for an HRMS

With the emergence of artificial intelligence (AI), it is more important than ever to have the right information at your fingertips at the right time. This is why HR functions have moved toward automation. All types of organisations s can benefit from a good human resources management system. Here are some areas ways human resource management software benefit organisations:

1. Data management:
   With HRMS, tracking real-time data of employees across varied functions is now possible. It eliminates the need for paper-based data storage, allowing for greater security and fewer errors if any.
   
   
2. Cost-effectiveness and efficiency:
   At a time when most companies have had to resort to working from home, modern-day HRMS solutions such as cloud-based HRMS are highly cost-efficient. The adoption of a human resources management system increases efficiency saving the time and effort on mundane tasks by the HR department. For example, leave requests can be placed and managed directly by an employee’s reporting manager, rather than going through HR. The streamlining of tasks by an HRMS has numerous cost benefits that far outweigh the cost of purchasing the HRMS.
   
   
3. Employee self-service:
   This allows employees access to their data related to their employment such as leave, attendance, payroll, and more. Employees can view and download their payslips, leave updates, and more.
   
   
4. Statutory compliance:
   An important aspect of an organisation’s functioning is ensuring100% compliance to central and state laws. An HRMS ensures compliance through regular updates to backend software.
   
   
5. Easy reporting and better insights:
   Human resource management software allows HR professionals to draw up any number of predefined statutory reports without any effort. HR can use an HRMS to generate reports on scores of parameters as and when required by senior management. It also provides a quick overview of critical information on a single screen of the HR dashboard. HRMS allows HR to analyse data better thus helping them to catch and nip problems in the bud.
   
   
6. Greater employee engagement:
   An HRMS can ensure greater employee engagement as it is practically indispensable in both developing and retaining talent. HRMS allows HR to effectively set up training programs, create and personalise learning plans, set up mentorships, and more. Such developmental activities are then tracked in the HRMS, which helps HR recognise development milestones. All this helps keep employees engaged and loyal to a company.

 

HRMS security

To protect the volumes of confidential information stored in an HRMS, data encryption should be used to protect information sent over the internet. Internally, organisations should use complex passwords and have password reset policies in place. Moreover, organisations should allow access to the information as per the employee’s job position or role.

Categorising HRMS

HRMS can be categorised into three separate groups of providers. Based on these categories, organisations can narrow down their choice of HRMS:

1. Enterprise Resource Planning providers:
   Have built-in integrations with their other business applications such as accounting. Offer a consistent user experience and a single security model. However, they do not offer an in-depth experience of an HRMS specialist and the interface may not be user-friendly.
   
   
2. Service providers:
   We fully outsourced and acts as an organisation’s HR department. They are more costly with higher integration costs, leaving organisations with lesser control over their HR processes and data.
   
   
3. Best of breed providers:
   Focus on one to three specific functions of an HRMS. Within these, they offer in-depth features with user-friendly interfaces.  They do not offer comprehensive HRMS solutions and integrating other business systems entail added costs.

Summing up

The past few decades are marked by rapidly emerging technology. Today, an HRMS is one such innovative technology elevating productivity, efficiency, and employee satisfaction at all levels in organisations. So, by implementing an HRMS, organisations can improve their business value in today’s world.

Sources:

●        https://www.netsuite.com/portal/resource/articles/human-resources/human-resources-management-system-hrms.shtml

●        https://www.greythr.com/complete-guide-hrms/#:~:text=An%20HRMS%20(Human%20Resource%20Management,of%20manual%20and%20repetitive%20tasks.

●        https://www.hrpayrollsystems.net/hrms/