Beginners Guide: What is HRMS Software?

These days, most companies have some type of HRMS application for at least some HR functions. Have you ever wondered, what is HRMS software and why is it a benefit to my organization? If so, then read on . . .

What is HRMS?

An HRMS (Human Resources Management System) also sometimes known as an HRIS (Human Resources Information System) is the technology or software applications that support HR processes. A company can have one general HRMS or many smaller, niche HRMS applications. A larger company could have one overall system for HR and financial applications, or could have a mix of HR applications to meet its business needs. The exact technology in use depends on the software strategy of a company and the HR business requirements.

What type of functionality is in an HRMS?

An HRMS covers the entire employee lifecycle from recruitment through to retirement and everything in between such as employee development, succession planning, training and sometimes payroll (if not covered by another system, such as an outsourced payroll).

What are the benefits of an HRMS?

The benefits of an HRMS are many! Some key areas to consider:

• Enhanced visibility of employment data, so better able to manage direct employee costs such as recruitment and retention.

• Improved management decision making due to access to data. Many HRMS teams now have Management Information (MI) as a part of their expertise. C level executives need analyzed data in order to determine trends and to make overall business decisions.

• Online self-service and mobile technology provides 24/7 access to data by employees and managers, a growing expectation in today’s society.

• It is able to compile global access to employee data quickly and easily. In many large companies today, locations are spread around the globe. Without a common HRMS, there is no possibility to get to basic statistics and headcounts in a convenient manner.

What should be considered before implementing an HRMS?

It is necessary to understand your HR business requirements and pain points. What are the data issues or problems that you’re trying to solve? Where are the transactional bottlenecks where a system could improve efficiency and lessen the administrative burden? Also, it’s necessary to have an overall strategic decision about one HRMS vs. many specialized niche systems, as well as a direction on topics such as self-service. In such cases, it’s best to involve consulting expertise, as well as to understand what products and services are in the market today.