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 HR data, streamline administrative processes, such as recruitment, onboarding and absence management and help employees work together more collaboratively. Here are the key things to look out for:

• 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 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.

• Integrated HR modules

  Not all organisations operate in the same way or have the same requirements. Modular HR solutions 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.

• Employee self-service

  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 key activities aren’t overlooked.

  Read more about employee self-service

• Approval workflows and process automation

  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.

• Configuration tools

  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 Otherwise they will quickly become outdated.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.

• Global capabilities

  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.

• 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.

 

 

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. They may also include features or modules to help manage:

Recruitment

Employee Onboarding

Performance Management

Absence Management

Time tracking

Training and Development

Employee engagement

Career and Succession Planning

Compliance

Rostering and Shift Management

Payroll and Pension Administration

Expense Management

 

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:

• The functionality or modules you select
• The number of employees you manage in the system. Costing can be based on an employee range, for example, 250 to 500 employees, or may reflect your actual headcount each month.
• The size of your company. HR systems aimed at large corporates usually cost a lot more than systems for small or mid-sized businesses. Research by Bersin estimated that large corporates were spending around £20 per employee per month in 2020.

Some vendors may charge extra for data storage, employee self-service or mobile apps. Fortunately, as more companies migrate their systems from Cloud-enabled to Cloud-native this has become the exception.