From global hiring to employee data management, time and performance tracking, payroll processing, onboarding, and offboarding, HR teams juggle numerous tasks. There’s no denying that as your organization grows, managing a modern workforce requires more than just spreadsheets and manual processes. However, HRMS software can help.
If you’re deciding where your money should go in investing in HRMS software while you build a global team, we’ve made things easier. In this piece, we covered features and a checklist to consider when choosing the best online HRMS system. But first, let’s get into.
What is HRMS software?
Human Resource Management System (HRMS) helps companies manage and improve their human resources processes. It combines various HR functions like recruitment, payroll, performance management, and employee data management into a single system.
HRMS software improves efficiency, reduces manual work, and provides better insights into workforce management. Organizations can handle tasks such as tracking employee attendance, managing benefits, and conducting performance appraisals effectively when using an online HRMS system, freeing HR teams to focus on other aspects of company management.
What are the benefits of using HRMS software?
Increased efficiency and productivity
By automating HR tasks, you can significantly reduce the manual work and errors, which empowers HR teams to focus on more strategic initiatives and increase efficiency.
Enhanced decision-making
Real-time data and analytics from online HRMS systems give managers the information they need to make better workforce planning and management decisions.
Better employee engagement
With HRMS software, managing employee affairs such as onboarding or performance reviews is more personalized and efficient, making way for a better overall employee engagement and experience.
Cost savings
Organizations are also able to reduce administrative costs with online HRMS systems, as well as allocate their resources more effectively by automating routine tasks.
Scalability
Many HRMS software allows for customization to scale and grow with your organization. This is beneficial for companies that are facing increased complexity in needs and processes or growing headcount.
Improved communication
Having a centralized system through online HRMS systems also helps in communication and collaboration between employees and HR teams; everyone gets proper and accurate information in one place.
How does HRMS software work?
HRMS software simplifies and automates several HR tasks to make the lives of HR professionals easier, as well as the lives of employees. Here's a simple way it operates:
Collecting and storing employee data
As a digital filing cabinet, it stores all of your employee information in one place—personal details, job history, and performance records.
Automating HR processes
Payroll, leave management, and benefits management are completely automated, reducing manual effort and minimizing errors.
Providing reporting and analytics capabilities
The HRMS online system provides ways to generate reports and analyze data so that HR teams can make educated decisions about who to hire, promote, and how to plan their workforce.
Offering a self-service portal for employees
Using a user-friendly portal, employees can access information about themselves, request time off and edit personal employee data, all of which improves their experience and reduces the burden on HR.
Integrating with other HR tools
Since it connects well with other HR software, online HRMS systems allow the smooth flow of data among multiple platforms and improve efficiency.
Read next: HR Software Integration: A Guide
HR Software vs. HRIS vs. HRMS: What’s the difference?
With so many systems out there, it can get a bit confusing to understand the difference between HR software, HRIS, and HRMS. However, they each have distinct features and functionalities:
HR Software
HR software is a broad term that encompasses any software that is geared towards managing human resources tasks. A variety of tools and applications that carry specific HR functions like recruitment, training or payroll can be included in it. HR software can also be standalone or part of a bigger suite.
HRIS (Human Resources Information System)
HRIS refers to a particular class of HR software designed to automate key HR processes around managing employee information. Its features typically revolve around data entry, tracking and managing employee records. HRIS systems are aimed at doing basic HR stuff like payroll, benefits administration, and reporting on compliance.
Learn more: What is HRIS? Why HR Needs Automation in 2024
HRMS (Human Resource Management System)
HRMS is more than an HRIS; it provides functionalities for a more complex HR process. This can range from performance managers, talent managers and advanced analytics. Although online HRMS systems are built around the purpose of giving a wider view of the workforce and serving as a platform for planning strategic HR, but they can easily fail to do so.
All of these systems aim to help improve HR management; however, HR software is a very general term, HRIS is focused on core HR data and processes, and HRMS presents a more holistic approach with additional capabilities for strategic human resource management.
Key Features of HRMS Software
HRMS software has a lot of features to ease and improve human resource management. Here are some key features you should watch out for, typically found in HRMS software:
Core HR management
This includes tasks such as managing employee records, organization structures and compliance with local and labour laws. It means that all basic HR functions are simplified and placed under centralized control.
Recruitment and talent acquisition
HRMS software also helps with posting job openings, managing applications, and tracking candidates throughout the hiring process. This can help to bring in top talent and make the overall process more personalized and efficient.
Payroll and compensation
There are also features to automate payroll processing, benefits administration and compensation management for accurate and timely pay. This helps to reduce errors and save time lost in calculations.
Time and attendance
Organizations can see employee work hours, leave requests, and compliance with attendance policies with this feature. It will keep the employee records accurate and will help in planning the workforce’s progress.
Performance management
Also, some HRMS software helps to review set goals and conduct performance reviews. This can help managers know how to give feedback to help employees grow and perform better. It creates a culture of development and accountability.
Read next: Modern Companies Need Performance Management System Software, Here’s What to Look For
Learning and development
Features for managing training programs, tracking employee contribution and progress, and supporting continuous learning are also available in some HRMS online systems. These components identify performance gaps, further improve skill sets, and boost career progression in the company.
Reporting and analytics
Some features offer advanced HR analytics and reporting capabilities to better understand workforce trends and inform data-based decisions. It gives HR teams the power to make strategic and informed decisions on-the-go.
Additional features
Some additional features include:
- Mobile access
This allows employees and management to have access to HRMS features on the move. It creates space for flexibility and makes it easier to work and guarantees the information you need is always ready for you.
- Employee engagement tools
This HRMS software feature can help to improve morale and employee engagement through initiatives like satisfaction surveys and recognition programs. This can facilitate a positive workplace culture and improve job satisfaction.
- AI and machine learning
AI is being incorporated almost everywhere now; this helps to automate the repetition and improve prediction with HR processes with advanced technologies. It can help companies come up with innovative solutions and improve HR operations and efficiency.
Checklist for Choosing and Implementing HRMS Software
Selecting the right HRMS software is as important as every business decision you make with a measurable impact on your organization’s performance and employee satisfaction. Here are 8 steps to guide you through your thought process:
1. Identify your pain points and your specific needs.
Map out the challenges your organization has to overcome in terms of HR management. If, for example, manual payroll processing is slow and prone to error, you need a solution to automate payroll processes. Defining these needs will clearly identify the issues you are facing and allow you to focus on HRMS software that can address these needs.
2. Consider the ease of use and user experience.
Choose an HRMS software that has an easy-to-use interface for everyone. One way you can do this is to sign up for a free trial or book a demo for the software you have in mind. This will help you decide whether to commit or choose another solution.
3. Assess its integration capabilities with your existing tools.
The HRMS software should be able to work well with your existing systems (this is extremely important, especially for big organizations)—this can include payroll, accounting and other HR tools. For example, the HRMS software should be able to automatically sync time off and payroll data to ensure accurate and updated information at all times.
4. Ensure data security and compliance with regulations.
The software needs to be verified that it meets the local data protection laws (for example, GDPR or HIPAA) and that it has solid security measures. Data security measures might include encryption, regular security audits, and secure access controls—or all three. Maintaining trust as well as avoiding being locked up in violation of provisions of the legal law is an important reason to pick an HRMS software.
5. Ability to scale and customize based on your specific needs
You should pick a solution that can evolve with your company and be customized for your one-of-a-kind requirements. If you’re thinking of expanding globally, check if the software can support multiple languages, currencies and more. This flexibility will guarantee the longevity of the HRMS software as it evolves and adapts to your changing business needs.
6. Evaluate cost and return on investment
Also, consider the whole suite of ownership, including implementation, subscription costs, and costs of maintaining that software. For instance, weigh the cost of cloud vs. on-premise solutions. When you check these costs and the expected benefits—time saved and reduced errors—you can effectively assess whether the HRMS system can generate a positive ROI for your business.
Relevant reading: HRIS ROI Calculator: Does Investing in HRIS Pay Off?
7. Choose a reputable vendor with a proven track record and support.
You shouldn’t just decide on an HRMS software because it looks good on the outside. Choose a vendor with a solid list of testimonials and achievements. Consider reading customer reviews or case studies on their blog or discussion forums like Reddit and Quora, where you can see unbiased opinions. The vendor should also provide reliable customer support to ensure the HRMS online system runs smoothly before, during, and after the implementation process.
8. Understand the implementation process and provide training.
Last but not least, get familiar with the implementation timeline and important requirements. For example, you might have to do data migration prior to implementation, which can be complex and time-consuming. Also, provide comprehensive training through workshops and online tutorials to allow your team to make the most out of your HRMS online system.
Empower Your HR Team with Omni
Omni frees HR teams from administrative cycles by automating the entire end-to-end employee lifecycle—from recruitment and onboarding to employee engagement and payroll—allowing you to redirect your time to strategic work that drives business growth.
Powering Asia’s fastest-growing, modern companies, Omni scales alongside your company so you can customize and leverage the system to meet your business exactly where you are—as well as where you’re going.
With a full suite of modules to support every aspect of your business, Omni’s platform offers an intuitive and fully customizable platform that integrates with your team’s favorite tools for a seamless and timely adoption.
By embracing technologies such as HRMS online systems and employee management HR tools, HR professionals can enhance their processes, improve outcomes, and create a competitive advantage for their organizations, enhancing efficiency, accuracy, and employee experience within their organizations.
To learn more about how Omni can help future-proof your HR functions, access a customized free demo for your team!
