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), HR systems usually cover the complete employee lifecycle from recruitment and onboarding through employee engagement and performance to career and succession planning.
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.
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.
What should an HR system do?
HR systems centralise, secure and organise HR data, streamline administrative processes, such as recruitment, onboarding and absence management and help employees work together more collaboratively. Popular HR systems include:
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.
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.
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.
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.
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.
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:
- Absence Management
- Performance Management
- Time Tracking
- Training and Development
- Employee Engagement
- Career and Succession Planning
- Rostering and Shift Management
- Payroll and Pension Administration
- Expense Management
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 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.
HR systems cost from a little as £1 to £2 per employee per month to more than £20.
Simple out-of-the-box solutions with limited flexibility targeted at smaller businesses typically cost the least. Mid-market solutions with more extensive functionality and configuration options may cost a little more. Enterprise solutions, aimed at organisations with tens of thousands of employees, cost the most.
It is also common for HR system suppliers to provide implementation services at an extra cost. Older suppliers may also charge for ongoing configurations, new features and support. Cloud-native HR systems usually include new features and support at no extra charge.
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