An HRMS, or Human Resources Management System, is a business application used to manage human resources. Also known as Human Resources Management Software, HRMS ensure HR activities run smoothly, enable compliance and help HR professionals better manage, develop, engage and retain their employees.
Today’s modern HRMS systems cover the entire employee lifecycle, from recruitment and onboarding through core human resources management to career and succession planning.
Why is an HRMS important?
HRMS systems save time and money, improve employee engagement and enable future-focused strategic HR planning and talent management.
Human Resources Management systems reduce HR administration overheads by up to 80%, freeing the HR team and senior managers from unnecessary paperwork and enabling easier legislative compliance. The best systems automate HR processes across the entire employee lifecycle, reducing the need for HR professionals to waste time on paper-based HR transactions and improving employee engagement at the same time.
The cost savings associated with an Human Resources Management system can be significant. Independent consultants, EY, found that the average cost of not using HR tech was around £3.50 per data entry. Even for a small company with simple workforce management processes, this can easily add up to hundreds if not thousands of pounds of time wasted each month.
Add to this the cost associated with the inevitable mistakes that come from over-reliance on manual human resources management processes or ineffective talent management or onboarding activities, and the case for investing in HR tech becomes clear.
HR Management Software has also been shown to boost manager satisfaction and employee engagement by simplifying HR processes and providing easy online access to useful information.
What will Cezanne HR’s HRMS system do for you?
Cezanne HR is a modern, comprehensive Human Resources Management system that covers the complete employee lifecycle. Trusted by thousands of HR professionals in the UK and worldwide, Cezanne HR is designed to make HR work better for everyone.
What is the difference between an HRMS system and an HRIS?
HRMS (Human Resources Management Systems) and HRIS (Human Resources Information Systems) are terms that are used interchangeably today.
An HRIS was historically software designed to manage the data required to run core HR processes, such as payroll and workforce administration. The first HRIS was probably LEO, a mainframe computer program developed in the 1950s by J. Lyons & Co. Initially used as a stock management system for their catering business, LEO was quickly extended to improve the efficiency of payroll processes.
HRMS, which became popular in the 1980s, built on the data management functionality of HRIS, adding support for a wider range of human resources management activities. These included recruitment, employee development and talent management. HRMS shifted the focus of HR technology from collecting and organising data to the wider strategic HR issues of how the HR department can best look after and develop their most important asset – their employees.
This change in emphasis from systems that organise HR data to systems that support employees continues today. Modern Cloud HRMS allow organisations to interact with employees in ways that were just not possible in the past and puts HRMS systems at the heart of successful people management strategies.
What tools should be included within an HRMS?
The key tools that every HRMS system should include are:
- Company-wide self-service
- Personalised employee dashboards
- Team calendars
- Mobile apps
- Easy own branding
- Reminders and notifications
- Process automation & workflow approvals
- Document management
- HR portals
- Form builders
- Report scheduling
- HR analytics
- Organisation charts
- Configurable security roles
- Email & calendar integration
- Open API
- GDPR compliance tools
Which are the most popular Human Resources Management system modules?
An HRMS system is usually made up of a suite of integrated HR modules, each designed to support a specific HR process. For example, holiday and absence management or performance management. This allows customers to select the human resources management modules that fit the specific needs of their business. Many HRMS also work alongside third-party solutions that provide ‘best-of-breed’ functionality, such as expense management, benefits administration, payroll processing, rostering or learning management.
The three most popular integrated HRMS modules are:
Other common HRMS modules include:
Some organisations may also require modules that cover:
Benefits of an HRMS
Respondents to PwC’s 2022 HR Tech Survey reported the top three most positive outcomes from deploying a Cloud Human Resources Management system as:
- More employees using it (91%)
- Greater HR control (89%)
- Improved data security (88%)
Other benefits included more use by managers, improved productivity, greater employee engagement and money savings.
Keeping data private using HRMS systems
Organisations are legally obliged to keep personal data safe, and the security of sensitive HR data is often the responsibility of the HR department. Good HR Management Software can do much to help HR teams by locking down access to data and providing secure online storage for sensitive HR documents.
However, not all HRMS systems are equally secure. For example, older-style HRMS may be vulnerable to attack, as was the case with Kronos in 2021. The vulnerability in their legacy systems left many major organisations without access to their HR and payroll softwares. Data security in simpler systems can be problematic too, especially if they’ve not been built for a global market so lack the option to control when or where HR staff or line managers can access personal data that is not their own.
Other considerations when reviewing the security of an HRMS include:
Relevant data protection legislation
For the UK and Europe, this is the GDPR. If you have employees in other countries, you will need to check that you understand their requirements. For example, while the US has no centralised data protection agency, some states have their own laws.
Other employment legislation
What data you hold, who you share it with, and how long you have to (or are allowed to) keep it will be influenced by broader-based employment legislation. This also varies between countries and regions.
The rules governing the transfer of personal data between countries are also covered by data protection legislation. If your employees are in the UK and EU, it is generally more straight-forward to manage your HR data from the EU than, for example, from the US.
The majority of HRMS suppliers host their systems with specialist Cloud-computing environments run by expert providers, such as AWS or Microsoft. These organisations are set up to provide a secure, fast and easy-to-scale hosting service and have multiple data centres, so can automatically provide failover support if needed.
The best HRMS suppliers will have their security processes independently verified – and have regular penetration testing. Certifications to look out for are ISO/IEC 20701, an internationally recognised security framework, and SOC 2, which is more widely used in North America.
The security of your HR data also relies on the architecture of the HRMS. You’ll need to be confident, for example, that passwords can’t be hacked, or data seen by the wrong people. Check to see how the HRMS supplier manages different user roles, how passwords are protected and whether you can enable advanced features, such as dual authentication.
How to choose an HRMS
Selecting a new HRMS system, especially for the first time, can feel a little overwhelming. Luckily, there are six simple steps you can take to make it easier.
1. Be clear about your business needs
It’s important to start with what you want, not what an HRMS vendor wants to sell you. If you are clear from the start about what success looks like, you’ll find it much easier to identify which HRMS will be best for you.
2. Build a long list
Armed with your list of ‘must haves’, start your research. A website search is a good way to identify the key suppliers, but you could also look at independent review sites, like Capterra or Software Advice, and reach out to other HR professionals. The CIPD discussion forum is worth checking out.
3. Whittle your list down to four or five
Spend a few minutes looking at each supplier’s website. Does their HRMS system offer the functionality you need? Do they have customers of a similar size or in a similar sector to your own? What kind of support or set up services do they have? Are they releasing new features on a regular basis? If the information isn’t easy to find, post a question in their chat or send them an email.
If you can, narrow your list down to four or five suppliers, so you don’t get swamped during the evaluation process.
4. Book an initial call
Before moving to the demo stage, it’s worth having a quick call with one of the sales team just to be sure the software is right for you. A good consultant will be just as keen as you to ensure their product is a fit. Even at this stage, they should be willing to discuss costs, talk about similar clients, answer your questions and explain how they’ll ensure your implementation is a success. If you feel they aren’t being entirely honest – or pushing a bit too hard – it’s easy to walk away.
5. Don’t waste hours on an RFI
The extended process of writing, scoring and reviewing a RFI (Request for Information) or ITT (Invitation to Tender) is unlikely to be good use of your time. Most HR Management
Software systems cover most HR processes – just in different ways and with different levels of flexibity or effort on your side. Once you’ve seen a few demos, drawing up a shortlist of must-have features would make sense. But, avoid starting from an exhaustive list of every field or process. HRMS software generally cover 80% of the features you need and quite a few are now designed to be easy to adapt, so let you fill any gaps.
Of course, there are some questions of ‘fact’ it is essential you ask, like where your system will be hosted, the security measures the vendor has in place, what support you will get and the cost of any set up services. But, when it comes to understanding ‘how’ an HRMS really works, it’s better to see it in action.
6. Do allow enough time
Today’s HRMS systems come with a lot of features. Chances are, you won’t need or have time to see every single one of them, but you do need to see enough to make sure you are comfortable with your final decision.
Make a check list of what is essential to you, run through it with each of your suppliers, make notes as you go, and then review what you have discovered. If you have more questions, or one vendor showed you a feature you’d not asked the others about, there is no harm in going back to the other suppliers and asking for another demo. You’ll be living with your new HRMS system for a long time, so it’s important you take the time to check it is going to work for you.
If the demos go well, it’s worth asking your preferred supplier for access to a trial, so you and your colleagues can spend a few days exploring the key features. This will give you a really good feeling for how everything works, which will make your final decision a lot easier.
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What is the difference between an HRMS and an ERP?
The biggest difference between ERP and HRMS is that an HRMS is designed to support human resources management and an ERP is a general business application. An HRMS offer more depth and breadth of HR features than an ERP, with suppliers generally geared up to respond faster to changing human resource management priorities.
An EPR is used to manage the wider operational aspects of business management, such as finance, accounting, manufacturing, and procurement. Also described as Enterprise Resource Planning systems, ERP systems provide some support for workforce management.
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