HR Systems streamline human resources management, improve HR-decision making, enable legislative compliance and help HR teams better support managers and employees.
Also known as HR Management Systems (HRMS) or HR Information Systems (HRIS), an HR system is a business application designed to manage the complete employee lifecycle from recruitment and onboarding through core HR administration to employee engagement and performance management.Arrange your demo now
Who uses HR systems?
HR software systems are used by companies of every size across every business sector, from small charities and specialist businesses to massive multinationals.
In the past, HR systems were designed to be used by HR professionals and senior management and focused predominantly on gathering and organising data. Today, they are used by the whole workforce, including job candidates, and maybe extended to external suppliers too. As a result, modern HR systems are both more sophisticated and easier to use than older-style admin-heavy HRIS. For example, they’ll usually work on mobiles and tablets as well as laptops and PCs, and include features specifically designed to appeal to employees.
What should an HR system do?
HR systems should centralise, secure and organise your employee data, streamline administrative key activities, such as recruitment, onboarding and absence management and help employees work together more collaboratively. Here are the most important features to look out for:
Bring all your HR data together (and keep it safe)
The best HR management systems come with a comprehensive HR database that makes it easier for HR to collect, manage and report on the wide range of organisation and employee data needed to support HR best practices. This means they need to do more than just handle core HR information, such as employee profiles and employment details. They must cover everything needed to keep your organisation running well. This could range from HR data associated with compliance, such as evidence of right to work or health and safety incidents, to data to help with effective employee development and career planning and DEI.
Support all your HR functions
Not all organisations operate in the same way or have the same requirements. Modular human resources management systems allow organisations to select HR features that reflect their specific HR needs. HR modules may be part of an integrated HR suite and share the same technology platform. Or, they could come from a different supplier but have a pre-developed interface. It’s important to check that any HR modules you select can be adapted (by you) to fit around your processes and support the HR functions that are essential in your business.
Connect and engage your employees (and managers)
Secure, easy-to-use self-service is a prerequisite of any modern HR system. It liberates HR from time-consuming administration and provides line managers with valuable information. Employees gain visibility over their data, and important activities aren’t overlooked.Employee self-service
Automate time-consuming manual activities
Arguably, the most important feature of any HR system is embedded workflows and automation. These orchestrate the flow of activities around the organisation, sending out notifications and chasing up overdue tasks, saving everybody time.
Adapt to fit your way of working
As organisations grow and change, HR processes need to change too. HR systems need to be flexible and easy to adapt. Otherwise they will quickly become outdated. Some suppliers charge for configurations. Others will have configuration tools available in their product.
Cope with regional or global differences
Some HRMS offer multi-language, multi-currency and multi-company capabilities. They’ll also allow rules and processes to be set up to reflect local requirements. This could range from different security roles based on location to different entitlements to paid time off.
Integrate with other business systems
Most modern HR systems provide tools that make it simple for you to connect your HR system with other applications. For example, an API (Application Programming Interface), webhooks and single sign-on options. These allow for easier integration between your human resources information system and your other business applications and security protocols.
Grow with you
Businesses priorities change, so you need to be confident that your HR system will change with you. The best HR systems will come with simple-to-use configuration tools that make it quick and easy to change processes, set-up new rules, create reports, add new employees, divisions, departments, countries and much more. Ideally, they should also be modular, allowing you to add new features when needed.
Which HR processes do HR systems cover?
All HR systems have a core HR administration module. This helps HR professionals organise and manage the most essential information about the business (such as org structure, locations, cost centres etc.) and their people. Alongside automating and streamlining everyday HR activities, such as employeer record keeping and compliance, most popular HR systems also help organisations better manage these key human resources processes:
What are the benefits of HR systems?
Why use an HR management system?
With a single online HR database that is simple to keep up to date, HR information is easier to manage and make use of. Everyone shares one version of the truth. Reports are available in real-time, and alerts are triggered automatically based on KPI or other metrics.
Manual processes, such as email-based holiday approvals, waste time. E-mails get lost, entitlements aren’t kept up to date and everyone gets frustrated. Automating the flow of approvals and updating data in real-time online saves everyone time.
The best HR systems enable legislative compliance. Features range from generic tools, such as document tracking and e-signatures, to specific functionality. For example, to record health and safety or grievance and disciplinary events. HR systems should also enable data deletion or anonymisation for GDPR.
Modern HR management systems can be an invaluable tool for employee engagement. The best systems act as communication hubs. They keep employees in touch with the company and each other.
Data protection legislation requires companies to safeguard employee data, wherever it is. Spreadsheets, e-mails and paper-based forms are hard to keep safe. Purpose-built HR management systems provide a much more secure environment.
Remote and hybrid working
Online HR management systems ensure important HR processes keep running, wherever staff are. They can also help organisations better co-ordinate, manage and motivate a distributed workforce.
Paper-based processes are time-consuming and prone to error. Ernst & Young estimates the average cost of just one manual data entry as c£3.50. Even for a relatively small company, this can quickly add up to thousands of pounds of time wasted every year.
Investing in a modern, affordable HR management system will save time – and time is money. The best HR systems also have a wider impact on business performance. For example, by helping identify absence or performance issues quickly, improving retention and helping HR and line managers make informed resourcing and development decisions.
How much does an HR system cost?
HR systems cost from as little as £2 per employee per month to more than £20.
The cost of an HR system is normally determined by:
- Functionality. Most HR systems provide a portfolio of modules or features that you can select from. Adding more modules will influence the cost.
- Number of employees. Fees may be based on an employee range, for example, 250 to 500 employees, or may reflect your actual headcount each month.
- Company size. Independent analysts, Bersin, estimated that in 2020 large organisations were spending around £20 per employee per month on their HR system. Our research suggests that for mid-sized and smaller businesses, monthly subscription fees for an HR system range from £2 per employee per month to just over £10 per month.
Hidden extras to watch out for
Some HRIS suppliers charge extra for data storage, employee self-service, mobile apps, customer support, system updates, subject access requests and international capabilities, such as language translations. Contractual terms can vary too. For example, older-style vendors may insist on a multi-year contract, others make it difficult for you to get your data back, and some regularily increase their prices by much more than inflation.
How to choose the best HR system
There is a lot to consider when selecting a new HR system, especially since a lot of what makes an HR system best for you relies on the underlying technology and how much work the vendor has put into understanding how human resources management really works. This guide takes you through some of the key areas you will want to consider.
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Also known as a human resources information system (HRIS) or human resources management system (HRMS), is a human resources information management system (HRIMS) is an information technology system that houses employee data and supports the human resources team in managing, engaging and developing employees.
Human resources information systems act as a centralised data hub, making it easier for HR professionals to collect, organise, manage and interrogate the information that underpins effective HR operations.
Today’s human resources information systems also boost employee productivity and engagement by automating time-wasting manual processes and ensuring fast, easy access to important information. Most human resources information systems are Cloud-based, so can be accessed online 24/7.