What is a HRMS?
HRMS is the common acronym used to describe a HR Management System – basically a software application or platform that automates, integrates, and manages the core HR processes of an organisation.
Commonly the processes automated in these systems cover the full employee life cycle and include management of employee and organisational information, recruitment, payroll, benefits, attendance and leave, claims, performance, recruitment, and learning and development.
HR Management Systems were traditionally implemented in organisations able to accommodate the IT infrastructure and specialists to host and administer a system for large numbers of employees.
Advances in technology mean that these days a HRMS is available to even the smallest of organisations via cost-effective and secure cloud-based systems. The latest systems are now simple, easily administered, and can be used by those with little or no technical knowledge.
Why should SMEs implement a HRMS?
Implementing a HRMS brings so many benefits at such low cost per employee that it is a common-sense business decision for organisations of all sizes.
The latest systems are designed to gather HR operational planning, processes, and administration into one central system that streamlines, automates, and optimises HR activities. Where required, these systems can also be linked to other internal or external systems to provide a seamless experience for administrators, managers, and employees.
SMEs have characteristics that make implementing a HRMS even more important, including the following:
- Need to manage a diverse and sometimes transient workforce
Small businesses are more likely to use contract staff, or to hire part-time employees. This workforce mix can be complicated to manage when it comes to record-keeping, payroll, and expenses. Using a HRMS standardises and streamlines processing and provides prompts when actions need to be taken.
- Need to remain adaptable and flexible
Small businesses need to be able to react quickly to changing circumstances and new opportunities. They also must be able to respond to changing rules and regulations that impact the workforce.
The right HRMS can increase flexibility with features such as anytime, anywhere access, customisable data fields, rapid report production to aid decision-making, and centralised payroll and benefits management.
- Need to keep overhead costs low
Small businesses are subject to the same compliance regulations as any other organization in terms of employee details and record keeping, but many cannot afford to hire a dedicated HR professional.
A good HRMS will keep track of mandatory compliance responsibilities, prompting renewal of passports, visas or identity cards, and payments of claims and benefits.
Automating HR operations can enhance employee satisfaction as it improves both accuracy and speed of processing for services such as leave approval or medical fees reimbursement. Investing in a HRMS means that businesses can expand before having to invest in a HR team.
Another potential saving is that the latest systems often provide readymade, fully compliant people policies, procedures, and workflows that can be customised to the location or specific needs. As many small businesses may not have their own set of HR standards in place, this can save considerable effort while ensuring that the company is compliant with local labour law and regulations.
Typical standardised processes include payroll, employee grievance handling, request administration, and performance management.
What are the typical features of a HRMS?
While features and functionality can vary from one system to another, the core set of functions typically include:
- Employee Onboarding
- Time, Attendance and Leave Management
- Compensation and Benefits Management
- Payroll Management and Processing
- Travel and Reimbursement Processing
- Training and Development
- Performance Management
- Employee Self Service
- Employee Document Management
- Exit Management
Some systems, such as HRBluSky, are now leveraging the latest technology to provide additional levels of functionality that improve the employee experience and make HR processing even more efficient.
These include features such as facial recognition for time and attendance, direct access via the system to external service providers for tasks such as visa processing, payroll, and medical insurance provision, and smart search capability.
What other benefits does a HRMS provide?
- Reduced costs: The latest cloud systems are cost effective as they do not require heavy infrastructure and require little configuration and setup, thereby enabling easier adoption by employees and HR administrators. Cost per employee is typically low, and significant savings come from the improved efficiency and productivity in processing and administration.
- Improved speed of handling new employees: Recruitment and onboarding cycles can be reduced as processes are standardised and centralised. Smart links to service providers for core functions such as visa processing ensure that the process is streamlined and less subject to human error.
- Improved employee experience: The employee experience is improved through features such as mobile accessibility, self-service functions, and transparent access to information and processing of training and performance management. Improved communication and visibility of data help to support engagement, performance, and employee retention.
- Increased accuracy to support decision-making: Increased data accuracy means less re-work, enabling seamless information flow across departments, and improved confidence in data analysis and reporting from senior management.
- Adherence to data privacy and compliance: This feature is particularly important in countries subject to frequent changes in labour laws, or where there is a high level of diversity in the nationality of the workforce and associated rules and regulations.
Things to consider when selecting the best HRMS for your organisation
Finding the right HRMS for your organisation can seem like a daunting experience. At HRBluSky we are always happy to spend time with you to understand your needs, explain features in detail, and guide you on how our HRMS can support your business needs.
Here are some key points to consider:
- Start by documenting needs and priorities. And perform a comparative analysis to choose the HRMS that best fits your needs. Your HR requirements will vary based on your organisational maturity and workforce demographics. While one organisation may need advanced learning and development functionality, another might need more advanced compensation and benefits functionality, so look for a system that is configurable to your requirements.
- Make sure that your selection process includes presentations from the service providers and ask for details of what differentiates them from their competitors.
- Avail of a free trial so that you can get hands-on exposure to the system and assess the level of simplicity for administrators and employees.
- Look at support provided for the outsourcing of functionalities to service providers. As an SME, you will reap benefits from having a system that links to professional service providers rather than having to build the expertise and size of your HR team.
- When considering overall costs, consider ease of deployment, maintenance, and handling of compliance and data privacy laws.
Digitalisation is here to stay, and businesses of all sizes must use technology to gain a competitive edge. Our state-of-the-art system, HRBluSky offers you a free trial so that you can explore the features with no financial outlay. If you’re wondering when to invest in a HRMS, the answer is now!