What Is a Human Resources Management System (HRMS)?

The role of human resources (HR) has arguably never been more complex and varied than it is today. Those working in HR all too frequently face an overload of tasks ranging from hiring, firing, and disciplinary procedures to evaluations, training, and onboarding.

With the sheer complexity and scale of what they must manage, it’s no surprise that most HR departments within companies have expanded steadily in size and numbers over the past couple of decades.

But accompanying this growth has been the gradual integration of modern technology. The development of Human Resources Management Systems (HRMS) has begun to share the burden by undertaking some of the more menial tasks that have long occupied HR staff, freeing them up for other responsibilities.

What is an HRM System, and Why is it Important?

HR activities can range from recruitment and onboarding to handling employee disputes and overseeing performance evaluations. With so many tasks, anything that can streamline tasks and eliminate redundancy is welcome.

HRMS is an integrated software suite that can function almost as a personal assistant to undertake the more tedious work, such as calculating time-off, filling in onboarding paperwork, and undertaking payroll management.

HRM systems are already proving their worth to companies across the world, with 74% of companies planning to allocate more of their budgets to investing in HRM systems.

This software frees up significant amounts of time for HR employees, who can then refocus on more complex tasks requiring a human touch. It also drastically reduces human error, which can arise from doing tedious tasks for long periods.

Whether the company is large or small, an HRMS system can increase productivity and efficiency while helping streamline the complicated world of HR in the 21st Century.

But its importance goes much further than simple ease of use and efficiency. An HRMS is about creating an integrated service that can completely transform how human resources operate. It can give employees more freedom and flexibility, establish curriculums, manage multiple career paths, and improve retention.

How Does an HRMS Work? 

HRMS allows organizations to automate numerous tasks, such as creating data-driven reports and keeping and updating employee records.

No two companies are ever the same, which is why an HRMS typically comes with various options that can be activated and deactivated as required. Companies also can have these apps and features tailored to their specific needs. HR employees gain access via a username and password and a supervisory option to oversee the entire process.

For large organizations with multiple locations, an HRMS can act as an intranet linking several offices at once with real-time updates available. When new information within the system is updated, it stores the data in a secure cloud and instantly reflects the changes across the entire network.

It’s also important to stress that not all HRMS are the same. A company’s choice will often depend on its industry and the most common areas that need attention. Some systems incorporate excellent candidate management capabilities, while others include complex payroll scenarios that can be great for large companies with considerable variations in employee payment schemes.

Researching which HRMS is suitable for your company can be time-consuming, but it will save plenty of time in the long run. It’s also worth evaluating your company’s needs and assessing your HR department to determine where an automated system might be able to help you best.

What’s the Difference between HRIS and HRMS?

An HRMS and a Human Resources Information System (HRIS) are similar in several ways. They both deal with data relating to HR, but where they differ is in the implementation.

An HRIS typically stores static information, such as names, addresses, and bank details. It has its roots in the 1980s when companies began to digitize their employee information rather than keep endless amounts of paperwork.

As technology progressed, HRMS systems began to appear. These programs could take on a more automated role than their passive cousins. In some cases, HRMS have largely replaced HRIS systems, but some companies use the two in conjunction.

How Can an Organization Benefit From HRMS Software? 

There are countless benefits on offer for those companies using an HRMS. It allows HR employees to be more productive and their processes more efficient, and it can also help lower compliance risk and compile and use data more concisely.

An HRMS can lower overhead costs by freeing up employees for other tasks, which can quickly spiral for large companies with hundreds or thousands of employees.

It can also dramatically improve the way that information is gathered and used. Instead of several people compiling data in different areas, an HRMS acts as a pool for storing information in one place, which organizations can use to create analytics that significantly helps companies improve their workforce management.

An HRMS is also an excellent way of improving employee engagement. Businesses can use it to establish mentorships, training curriculums, and personalized learning plans tailored to each employee along their career path. The system can then track these milestones, which can significantly improve employee retention.

Lastly, an HRMS helps to promote a culture of self-service. Employees can take control of tasks or queries that would have traditionally needed additional staff.

It’s possible to set up a knowledge repository that anybody in the company can access and find answers to frequently asked questions. The system will also allow employees to access and update their information when needed rather than go through the bureaucratic procedures of informing another person and waiting for the updates.

Conclusion

The role of human resources has expanded exponentially in the past couple of decades. Additions such as training, employee development, and welfare were quite rightly included and enlarged, but with that came an unsustainable burden on many HR departments.

Nowadays, we are seeing the development and evolution of automated systems. These systems ease the workload on HR employees and significantly improve how companies operate. Data backup and cloud storage in some of these systems also improve data security for many organizations worldwide.

It’s difficult to imagine a medium to large-sized company operating without the assistance of an HRMS. In a world of efficiency and time management, running a business without some much-needed automation is not logical.

At ScoutLogic, we focus on another area that has traditionally drained HR resources: recruitment. Our dedicated Scout service model lets us take care of the tedious work of performing background checks on new employees, freeing up your time to use more productively and efficiently — like managing your workforce.

Using ScoutLogic in conjunction with a good-quality HRMS can completely transform how your human resources operate. Call today to match up with your very own designated Scout and see how we can enhance your recruitment and screening processes.

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.