What is HR management system and why you need it ?
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HR Management System

What is HR a Management System and why you need one

HR Software or HR Management System (HRMS) or Human Resources Information System (HRIS) is a digital tool that helps HR manage and optimize their daily tasks. It combines a number of systems and processes into one software, such as storing employee data, managing payroll, recruitment, benefits administration, time and attendance, employee performance management, and tracking competency and training records.

While it is usually considered to be a good business instinct to opt for and utilize specially designed software for managing your organizational functions such as accountancy and marketing, have you considered seeking a similar digital solution that can help to automate and redefine your organization’s HR processes? If ‘No’, then it is probably time that you consider opting for specialist HR software. This will facilitate your employees to manage and take care of some crucial HR tasks all by themselves. By doing so, you as an HR will be able to focus your energies on other critical business-related tasks.

In order to help make you take this decision, let’s go through the below situations. In case you feel you have also faced any one or all of these situations of late, then it is a huge indication that it is time now for your organization to invest in HR software.

  1. Are you actually aware of when your employees are going on leaves and also who authorized them? Do you have a plan in place to take care of their responsibilities during their leave period? Do you find employees on leave when their team needs them the most?

If you can relate to these questions posed, then HR Management System can be of great assistance to you in order to provide you with a transparent picture of which employee is available or not. You will be notified in advance of the upcoming leaves of your employees. Apart from this, the software will provide you with calendars that keep a track of days off and holidays. So you will always have a 360 degrees view of what each employee is up to in terms of leaves and can thereby reassign responsibilities to others accordingly.

  1. Have you found yourself in a situation where the appraisal of an exemplary employee is overdue?

Are you aware of when the employees need some training or when their appraisals are lined up? Do you find some of your employees suddenly resigning? In any kind of growing business certain employee management practices such as training plans, disciplinary procedures, and performance reviews are quite significant. When you have HR Management System installed, you can swiftly access any records of employees without having to sift through a multitude of Excel sheets or folders. You will have all the records sorted and stored online along with any upcoming tasks or appraisals. This makes it a tad easier for you to be on top of your own personal development plan.

  1. Do you often find yourself scratching your head trying to remember where did you keep your procedures handbook or policies?

It has been observed that having staff records, contracts, and policies on the cloud helps in effective decision making and planning without a hassle. When you have HR Management System in place, it can act as a centralised system for managing all your documents and helping you keep a track of whether your employees have gone through the required policies and accepted certain key documents. Also, it is much better to access and store all this information online instead of depending on printouts.

  1. Do you often find yourself receiving multiple HR reports in different spreadsheets?

If ‘Yes’, then it is time to opt for HR Management System for sure. One of the important features of good HR Management System is collaborative reporting ability. When you have the right technology in place, all you would need to do is to click a button and the HR software will produce the reports for you in a jiffy.

  1. Do you miss out to update your health and safety procedures often?

Do you think you are up to date with all the latest employment rules, regulations, and laws? It is important for every HR function in an organisation to comply with the standard governance practices and industry regulations. Installing HR Management System can help you document all the steps that you have taken in order to be compliant with the latest regulations. It can create a digital trail for you that can be easily shared, audited, and reviewed.

Everywhere you turn, the software seems to be the answer. You’re probably already using software for your marketing, accounting and management. But have you yet considered the need for human resources software in your small business? In fact, it’s much more than a luxury. Businesses that use HR Management System would likely call it a necessity.

How does HR Management System work?

In its simplest form, HR Management System means specific platforms that combine different systems and processes to ensure a business’ employees are readily accessible when needed and data is properly stored.

All HR Management System, of course, is different, and each business has unique needs and applications. But systems typically include payroll management, benefits administration, attendance record keeping and time stamps, or some combination of those functions.

HR automation isn’t new, but we are finally at a point where it’s cost-effective and feasible for small businesses to utilize. You can trace automation all the way back to the late 1970s when big corporations started using ERP systems to overcome the manual limitations they faced with the use of mainframe computers.

In 1987, the first totally HR-centered platform was released by Oracle (which still offers premium HR tools today). Since then, dozens of systems have been launched and improved upon. There was a lot of innovation in this space in particular in the late 1990s and early 2000s, but it was only recently that HR software finally became cost-effective (thanks to the cloud infrastructure).

The benefits of HR Management System

If you’ve been manually handling HR operations in the past, you may wonder about the benefits of paying for a software system. But take a closer look:

1. Cost savings

Are you familiar with the cost of employee turnover? Chances are, you’ve drastically underestimated what it really costs your company to replace an employee. According to research from different studies, a company will spend anywhere from 16% to 213% of its average employee’s annual salaries to hire someone new.

Replacing even someone in a low-paying job is likely to amount to 16% of his or her salary. So, for an hourly employee making $10 an hour, you’re talking about roughly $3,328 when all is said and done. That number scales to 20% for a mid-range position ($30,000 to $50,000) and then balloons to a whopping 213% for executive positions. (Need to replace a CEO earning $100,000? That will cost you roughly $213,000.)

What does all of this have to do with HR Management System? Well, a good HR platform helps reduce turnover by ensuring employees’ needs are taken care of. Furthermore, it makes the process of finding the right candidates simpler. As a result, there’s less likelihood of hiring someone who’s wrong for the position — which further drives up costs.

2. Better use of time

Time is the one thing your HR staff can’t get more of. Thus, it’s imperative that you help them create systems that maximize time. If your HR team is constantly inputting data by hand, making phone calls and manually vetting candidates for openings, they won’t have time for things that matter more — like handling legal issues and enforcing company policies.

An HR software platform isn’t a perfect solution, but it certainly helps businesses save time and better allocate manual resources to areas that really matter to a company’s health.

3. More accurate insights

With the amount of data that comes through an HR department these days, it’s virtually impossible for any person — or group of people — to process everything. This means valuable information is constantly being overlooked or misplaced.

The beauty of working with HR Management System is that you don’t have to rely on your own human limitations. Data is synthesized and analyzed in powerful ways that allow you to obtain more accurate insights and make strategic decisions.

4. Surprisingly cost-effective

“Many business people believe that purchasing a top-quality HR Management System package will bankrupt their entire marketing budget. This is simply not true,” business consultant Malcolm Rowlings said. “Some of the best HR packages have financing programs and monthly memberships that can work with even the smallest startup budget.”

Some would even argue that you can’t afford to use HR software. The amount of money you’re losing in terms of lost man-hours and mistakes doesn’t even begin to compare to the up-front cost of HR software. It’s an easy call to make.

The features to look for

If you’re in the market for HR Management System, you have plenty of choices. In order to narrow down your options, you need to know what you’re looking for:

1. Cloud platform. 

There is plenty of desktop and on-premises HR Management System applications available today. Many of them are useful and, surprisingly, pack a pretty powerful punch. However, be wary of going with desktop software in a business world that’s being shaped around the cloud.

Cloud software platforms are so much more valuable these days. Take People HR Management System, one of the leaders in this niche, as an example. Whereas a desktop solution requires the user to actually be in the office and log on to a particular computer in order to access the platform, a tool like People lets employees access information regardless of whether they’re in the office or using their smartphone in an airport.

That’s the power of the cloud.

2. Self-Service Features. 

The more you’re able to offload responsibilities from your HR team, the more useful they can be. In other words, if your HR team doesn’t have to worry about constantly emailing the same answers to employees who repeatedly ask about sick days and pay stubs, they can focus on big-picture tasks that really matter. This is where self-service features come into play.

3. Scalability.

The third thing you need to be cognizant of is scalability. If you’re like most companies, you’re anything but stagnant. You’re most likely growing, and the last thing you want is to invest in an HR system, learn how to use it and then have to replace it because your team outgrew it.

Good HR software is scalable in the sense that you only pay for what you need. And when you need more access, you simply upgrade without interruption. Most of today’s leading cloud systems — such as People — are scalable, but make sure you evaluate this in the vetting process.

Make the right choice.

HR Management System finally makes sense for small businesses. It’s equal parts functional and cost-effective, which means there are very few negatives to investing in this technology.

However, you do need to do your research and know what you’re looking for. Every platform is different, and you’ll want to be sure that you’re getting access to the features you need.

Byron Conway

Content Coordinator at EmployeeConnect