A Human Resources Management System (HRMS) is software specifically written to streamline and improve people management. Also called HR Information Systems or HRIS, the best HR management systems cover the complete employee life-cycle, from recruitment and onboarding through to performance managment and career development.
An HR management system will dramatically cut the time spent on HR administration, reduce data errors, improve decision-making and enable compliance. Human resources management systems can also boost employee engagement by helping all employees – HR, managers and employees – work more collaboratively.
Historically, an HR management system was only used by the HR team. They were ‘back office’ systems 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 employee and manager 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.
Comprehensive HR database
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 data needed to support HR best-practice. These could range data associated with compliance, such as health and safety incidents or time off, 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
Arguably, the most important feature of any HR management systems is embedded workflows and automation. These orchestrate the flow of activities around the organisation, sending out notifications and chasing up overdue tasks, so HR teams don’t have to.
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.
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.
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.
Efficient and effective human resources management has never been more important to organisational agility and employee productivity.
Paper-based processes and Excel spreadsheets impose a high administrative burden on HR teams. They prevent proper reporting, create unnecessary friction and leave organisations at risk.Different types of 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 triggered based on KPI or other metrics.
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.
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.
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 notoriously hard to keep safe. Purpose-built HR management systems provide a much more secure environment.
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.
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.
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
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.
- Absence Management
- Performance Management
- Time Tracking
- Training and Development
- Employee Engagement
- Succession and Career Planning
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.
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.
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.