Human Resource Management System (HRMS) : Features, Functions & Importance

What is a Human Resource Management System (HRMS)?

Human Resource Management System (HRMS) is a software tool specifically designed for the Human Resource departments of various enterprises for smooth and hassle-free accomplishment of tasks related to employees. This tool is effective and efficient enough which reduces the time and effort of the managers. Owing to digitalisation, the new generation of HR has made HRMS a crucial component. This system comprises all the major systems that the human resources department is meant to do but in an automatic process.

Key takeaways from Human Resources Management System (HRMS):

• HRMS includes systems such as HRIS (Human Resource Information System), Payroll, Applicant tracking system (ATS), performance appraisal and management, and training and learning management.
• HRMS is a combined system of IT processes that manage human resources and related activities during the lifecycle of employees.
• By complying with the regulatory norms and conditions including the tax and labour laws, HRMS provides the best service to understand the company’s workforce.

Features of Human Resource Management System (HRMS)

HRMS looks after staffing, onboarding, employee engagement and compensation, employee development, and workforce management. Hence, there are numerous features which the HRMS solution incorporates.

1. Core HR Features:

• Benefits Administration: Employee benefit is considered an important aspect of the HR. HRMS provides hassle free maintenance of benefits such as pension plans, sick leave or maternity leave, medical insurance and vacation.
• Mobile Compatibility: Nowadays, many companies have designed their personal apps both for Android and iOS users where employees can easily do necessary tasks or get important information including applying for benefits mentioned above.
• Self-Service (Both for Management and Employees): Both managers and employees can accomplish their individual task within fraction of seconds. The data loaded by both the parties make it easier to access and less time consuming. Data includes reviewing applications, entering performance review from managers side and entering personal information, claiming benefits and checking status from employees side.

2. Time & Attendance: This feature comprises of absence management, employee scheduling, time keeper, compliance, budget planning and payroll integration. All these modules help the managers keep track and record of the employees daily work schedules.

3. Analytics: Few of the HRMS has this special feature of analytics. This help managers to strategically make plans and progress accordingly regarding employees. This feature comprises of real time reporting, auto-capturing data, personalised dashboards, forecasting capabilities, financial analysis and access controls.

4. Onboarding: This HRMS feature deals with online forms and reports (paperless), automated notifications/alerts and management of probation. For seamless onboarding, HRMS should include these modules to check on new employees performance.

5. Compliance: HRMS is known for having automated recruitment compliance which claim transparency and fair choice in the hiring process. This feature also enables automated healthcare benefits compliance where newly updated laws are presented so that users have the recent information in hand.

6. Payroll Solutions: Payroll is one of the core HR processes. Therefore, HRMS includes this payroll solutions which provides flexible payroll periods, compliance with the global payroll rules, bulk processing and reprocessing, overtime records and pay adjustments and availability of online pay slips.

How does Human Resource Management System (HRMS) Work?

Human Eesource Management System helps in the HR processes. It helps to find and identify new applicants, evaluate them and provide them a smooth onboarding program and build stronger relationships so that the new employee can help the organisation grow faster. So, the initial step of every HRMS is to select employees. The HRMS is there to collect candidates’ email, phone numbers, social media links and related data after a resume/CV is received on its database. It then organises all the information to build an individual record so that the relationship with the new employee is better understood. A clear picture of employees and new applicants can be found in the HRMS. The employee self-service portal helps the employees to load their details by themselves so that human errors be avoided. For speeding up the hiring process, HRMS connects to other business applications software. Common tools like document signing, google calendar, assessment tools are incorporated into present day HRMS solutions.

Functions of Human Resource Management System (HRMS)

1. Recruitment: One of the core function of human resource department is recruitment. HRMS have incorporated recruitment module which helps in the hiring process of candidates. It is designed to post advertisements, find and identify applicants along with providing online forms and documents. With the social media saga, HRMS in present day have been collaborated with the platforms such as LinkedIn, Twitter, Facebook etc. In addition to these, this recruitment module includes smooth processing of onboarding of new recruit.

2. Reporting: HRMS generates reports using the updated data loaded into the database. This reports are system generated which are automatically formed. This process is helpful for managers in taking quick decisions using those reports.

3. Time and Attendance Management: Manual attendance in an organisational set up is a herculean task and for the HR department attendance of employees is an important aspect to calculate salary, performance, overtime, etc. Automated attendance solution in an HRMS would help in recording the attendance, leaves and holidays.

4. Leave Management: Leaves entitlement are provided to all employees according to the job position of employees. This leave management module in the HRMS system help employees to calculate and look for their personal allocation of leaves. Thus, employees’ absence from workplace can be better managed.

5. Payroll Processing: Payroll processing is a cumbersome job calculating on a monthly basis and that to every month. This will be eased using an HRMS solution which brings out exact figures which each and every employee is entitled to in the form of salary depending on the attendance, leaves applied, holidays available, overtime taken and related deductions.

Importance of Human Resource Management System (HRMS)

Human Resource Management System is an important platform because of the following reasons:

1. Core HR Processes: The efficiency of core HR processes is enhanced. HR is known for recruiting, hiring, selecting new resources to the company. These processes become hassle free due to the use of HRMS software. The HR can be more productive if software based system is introduced which would minimise time, make less mistakes, provide quick responses and easy results be obtained.

2. Employee Self-Service: HRMS software enhances the self-service process of employees. Usually employees have many queries and doubts, for which they require immediate answers. It is not possible for the HR team to answer each of their queries to every employees when their employee strength is in hundreds.

3. Effectiveness of the Organisation: Installing an HRMS in an organisation, enhances the effectiveness of that organisation. This software is self-reliant which promotes consistency in the management of the HR activities. As the system is transparent, engagement of employees in the company increases. In addition to this, certain functions such as performance appraisal, disciplinary tracking and data security.

4. Centralisation of Data and Enhancement of Security: When all the data is found in one place, it is an added advantage for an organiSation to look after large amount of employee data, procedural documentations, different policies and standards. HRMS provides this advantage to find and track necessary information of any employee from any place at one location. Even other departments excluding HR can access information via this software. Along with providing better accessibility, protection of data is also ensured.

5. Compliance of labour and Tax Laws: The HRMS is build in such a way, which can comply with the updated rules and regulations of tax and labour laws. Both central and states laws are being followed. This compliance is beneficial when employees take overtime, work at different shifts, employees are spread in different locations etc.

Human Resource Management System (HRMS) Security

1. External Security: While selecting an HRMS, security should be a prime concern. Highly sensitive data comprising business owners’ data and volumes of employees personal information are stored into the HRMS. Hence, it is very important for the organisation to choose a platform which provides a secure and smooth communication. For Example, SSL (Secure Socket Layer) which encrypts the data which are communicated via online. This is the external security.

2. Internal Security: Internal security is also crucial. The information should have password protection at different levels of accessibility depending on the job hierarchy. As most of the organisations are providing access of the HRMS to the employees, the employees should also understand the security and integrity of the system and the information that is possess. Policies should be implemented to immediately devoid accessibility of terminated or ex-employees.

FAQs on HRMS

Question 1. What are HRMS tools?

Answer:

HRMS are automated tools which manages employee data and related activities. They track employee contact information, job descriptions and positions, performance reviews, remuneration and benefits and training and development. These HRMS tools automates recruiting, onboarding and time-tracking processes. Further, they enhance payroll and compliance processes.

2. What are the Types of HRMS?

Answer:

• Core HRMS: It is the base of HRMS that comprises of basic employee data like name, address, contact information and emergency contacts.
• Payroll: It manages remunerations, wages, bonuses and deductions.
• Benefits Administration: It manages employee benefits like medical and health insurance, pension plans and stock options.
• Time and Attendance: It tracks employee attendance, vacation and sick and maternity leaves.
• Recruiting and Onboarding: This system finds, connects selects and onboards new employees.

3. Are HRMS and ERP the same?

Answer:

Human Resource Management System (HRMS) and Enterprise Resource Planning (ERP) are both different from each other. HRMS solution manages and organises employee information such as performance, attendance, training and payroll. ERP, on the other hand, manages and optimizes business processes such as purchasing, supply chain, finance and accounting and inventory.

4. Who can use HRMS Tool?

Answer:

HRMS can be used by the HR department, Finance and other department managers. Along with employee data and payroll & benefits, HRMS also create reports and analyse employee performance and much more. With the new form of working from home era, HRMS have helped employers to keep a track of employees remotely. Even the employees can perform major task with the help of HRMS sitting at home.

5. What should I consider when choosing HRMS Tools?

Answer:

• Cost: The ROI and cost of the software must be properly considered.
• Integration: Accommodating with existing software and processes is needed to develop a hassle free workflow.
• Functionality: The features of the software should comply with the organisation’s goals and objectives.
• Security: High security and no breaching of data should be considered.