HR systems overview

HR software systems are used by companies of every size across every business sector, from small charities and specialist businesses to massive multinationals.

Historically, HR systems were designed to be used by HR professionals and senior management. Today, they are used by all employees and in some cases, external suppliers and job candidates.

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.

  Read more about 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.

  Learn about global HRMS.

• 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.

 

 

What 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:

• HR Self-service
• Recruitment
• Employee Onboarding
• Absense Management
• Time Tracking
• Training & Development

• Succession Planning
• Employee Surveys
• Document Management
• HR Compliance
• Payroll/Payroll integration

 

What are the benefits of HR systems?

Why use 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 are triggered automatically based on KPI or other metrics.

• Efficient processes

  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.

• Legislative compliance

  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.

• 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 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.

• Cost savings

  Paper-based processes are time-consuming and prone to error. Ernst & Young estimates the average cost of a single manual data entry as c£3.50.

  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 subscription cost for HR software 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.

What 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.