What is an HR Management System

Human Resources Management System is software designed to streamline and improve people management. Also called HRMS or HRIS, HR Management Systems support both day-to-day HR administration and strategic human resources management. Typically built around a core HR database, they often cover the complete employee lifecycle, from hire to retire.

 

Key featuresTop benefits

Who uses an HR Management System?

From back office to company-wide

Until the turn of the century, the main purpose of an HR Management System was to store and organise HR data. These ‘back office’ systems were primarily focused on personnel data administration and reporting for compliance and payroll. Often hosted on in-house servers, they were only accessible to the HR team.

Today, the best HR software systems provide a much more valuable service. Modern Cloud technologies, intuitive self-service and process automation transform HR for everyone. Employees can connect with their data and each other in a way that is more productive and rewarding. Line managers have the information they need. HR processes run smoothly and everyone saves time.

human resources monitor screen

Key features of an HR Management System

 

  • Best-practice HR database

    The best HR management systems come with a comprehensive HR database. This ensures it is simpler to collect the data needed to support a broad range of critical HR activities. These could range from compliance and payroll to employee development and career planning.

  • Integrated HR modules

    Not all organisations operate in the same way or have the same requirements. Modular solutions allow organisations to select the modules they need. These modules may be part of an integrated suite and share the same technology platform. Or, they could come from a different supplier but have a pre-developed interface.

  • Employee and Manager self-service

    Secure, easy-to-use self-service is a pre-requisite of any modern solution. It liberates HR from time-consuming administration and provides line managers with valuable information. Employees gain visibility over their data, and key activities aren’t overlooked.

  • Approval workflows and process automation

    HR Management systems can automate the flow of activities around the organisation. They’ll forward approvals, trigger notifications and prompt people to complete tasks.

  • Configuration tools

    More sophisticated HR management solutions offer considerable flexibility over system set up. For example, to reflect different working practices or approaches to performance reviews. Some suppliers charge for configurations. Others will have configuration tools available in their product.

  • Global capabilities

    Some HRMS can support an international workforce by offering 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.

  • Integration options

    Most modern systems provide an API (Application Programming Interface) and Single sign-on options. These allow for easier integration with existing business applications and security protocols.

Why use an HR Management System?

Business benefits

Efficient and effective human resources management has never been more important.

Paper-based processes and Excel spreadsheets impose a high administrative burden on HR teams. They prevent proper reporting, create unnecessary friction and hamper productive working.

Different types of HR Management System
hr system people cogs

Business Benefits of an HR Management System

 

  • Accurate reporting

    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 triggered based on KPI or other metrics.

  • Efficient processes

    Slow manual processes, such as paper-based holiday or timesheets approvals, waste time. E-mails get lost, spreadsheets aren’t updated and everyone gets frustrated. Automating the flow of approvals and capturing information online saves everyone time. It also helps managers make better-informed decisions.

  • Legislative compliance

    The best HR management systems also incorporate features that enable legislative compliance. These range from generic functionality, such as e-signatures and reminders, to specific functionality. For example, to record health and safety or grievance and disciplinary events. Systems should also enable data deletion or anonymisation aligned with data protection legislation.

  • Employee engagement

    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 security

    Data protection legislation requires companies to safeguard employee data, wherever it is. Spreadsheets, e-mails and paper-based forms are notoriously hard to keep safe. Purpose-built HR management systems provide a much more secure environment.

  • Remote 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.

  • Cost savings

    Ernst & Young estimates the average cost of a single manual data entry as c£3.50. Paper-based processes are time-consuming and prone to error. Investing in a modern, affordable HR management system will save time – and time is money. The best human resources systems also have a wider impact on business performance. For example, by helping identify absence or performance issues quickly. Or ensuring HR and line managers make informed resourcing and development decisions.

Discover how an HR Management System like Cezanne HR can save you time and money

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The different types of HRMS

Old v New Cloud HR Architectures

Almost all business software today is Cloud-based and delivered as Software as a Service. The supplier handles all the hosting and system updates. Customers no longer need to worry about IT infrastructure or maintenance. They can focus instead on making optimal use of the software.

Older SaaS systems are generally ‘Cloud-enabled’ with code added to allow internet access. Newer solutions are described as ‘Cloud-native’. These systems are specifically developed to take advantage of the cost-efficiency and scalability of modern Cloud computing. This means they are usually cheaper, and also quicker to set up and updated more often (and easily) than older systems.

Learn more about Cloud HR
cloud architecture screen monitor

 


Modular suites

Employee lifecycle HRM systems

Human Resources Management 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.

Depending on the market the supplier serves, there will also be the option to select from a range of different modules that cover the employee lifecycle. Many suppliers also offer modules that support industry-specific processes, such as clocking in and out or rostering. Some focus on specific sectors, such as public sector, financial services or the charity sector.

 


Popular human resources modules

  • Recruitment
  • Onboarding
  • Absence Management
  • Performance Management
  • Payroll
  • Time Tracking
  • Training and Development
  • Employee Engagement
  • Succession and Career Planning

HRM systems and payroll software

Local v Global payroll

Most HRM systems include single-country payroll software. Fully global payroll software solutions are rare and expensive. That’s because different countries – and sometimes states or regions – have different payment norms and employment legislation that changes frequently. This makes payroll systems expensive to develop and keep up to date.

For smaller and mid-sized global organisations, a more pragmatic and cost-effective solution is to use country-specific payroll software that is integrated with the core human management platform or to outsource to a global payroll agency.

Local v Global payroll

How much does an HR Management System cost?

The cost of an HRM system ranges from as little as £1 to £2 per employee per month (PEPM) to more than £20 PEPM. Modern Cloud HRM solutions tend to be more cost-effective than older systems. However, the main driver of cost is usually the completeness and sophistication of the solution.

An HRMS that cover the full employee lifecycle, is functionally rich and flexible, will cost more than simple ‘out-of-the-box’ solutions targeted at smaller businesses.

It is also common for HRMS solution suppliers to provide implementation services at an extra cost. Older suppliers may also charge for ongoing configurations, system updates and support. Cloud-native HR platforms usually come with support as part of the service, are designed to be configured by the customer, and updated automatically.

What are the different HRM solution pricing models?

Licence fees: Historically, licencing software was the most common approach. The licence cost was paid in advance and the system deployed on internal servers with annual maintenance fees paid to cover support and ongoing development. Contracts were fixed term, and almost always lasted for three to five years.

Subscription fees: Almost all systems today are offered on a subscription basis – as Software as a Service – with the system hosted in the Cloud and the customer paying either a monthly or annual subscription fee. Some suppliers charge the fee upfront and tie customers into a fixed-term contract.

This can range from one year to five. Others, like Cezanne HR, bill monthly in arrears and may also allow the subscription to be cancelled at short notice.

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