Why HRMS is needed and how to get started
The expansion of a company requires a joint effort from many stakeholders.
This necessity for effective teamwork means that companies must place the right people in the right positions.
Human resources departments must implement effective systems for executing core HR functions - particularly for recruitment and onboarding.
In this article for Process Street, we take a close look at how Human Resource Management Systems (HRMS) work and how they can give your company a competitive edge in the battle for talent.
What is an HRMS?
5 essential advantages of an HRMS
Challenges in integrating an HRMS
How to get started with an HRMS
Integration of your HRMS with a simple workflow software
What is an HRMS?
An HRMS (Human Resource Management System) is a comprehensive, centralized type of HR software that enables the management of multiple HR functions.
"The competitive advantage that modern companies demand means that every workflow and every process must be right the first time - and at much lower costs than in the past." This can only be achieved through software systems, whose intelligent implementation leads to the digitization of the traditional HR department.
Ultimately, the goal of an HRMS is to improve a company's productivity and efficiency through the efficient management of HR processes, primarily by consolidating data and automating manual and repetitive tasks. An HRMS offers an easy way to integrate all central and strategic HR functions into one solution.
The most common HRMS modules are:
Recruitment and Onboarding
Payroll Management
Scheduling and Time Management
Employee Performance Monitoring
Reporting and Analysis of Personnel Data
5 Essential Benefits of HRMS
Let's take a closer look at some of the key benefits of integrating an HRMS solution.
Remember that each advantage can be broken down into additional, more specific benefits. The possibilities of an HRMS are so extensive that the impact it can have on your company is incredibly significant.
1. Improves the efficiency of core HR processes
By standardizing processes related to employee information, an HRMS, for example, eliminates repetitive tasks, reduces human errors, and increases transparency between departments.
Essentially, it is the significant improvement in data management that enables the optimization of HR processes.
2. Enables a high level of employee self-service
This is the ultimate win-win advantage of implementing an HRMS solution. Your HR manager has more time to focus on important tasks and strategic goals, while simultaneously improving employee engagement and satisfaction. Considering that 87% of highly engaged employees are more likely to stay with their company, increasing job satisfaction is an obvious priority.
Studies have shown that 90% of executives believe that an engagement strategy would have a noticeable impact on company success.
However, do not be deceived. The introduction of an HRMS with excellent self-service features is only one side of the coin. You first need to get your employees to use the system before the benefits become noticeable.
3. Fast and Easy Reporting
Real-time data, combined with powerful filters and visual representations, allows managers to create the reports they need, when they need them.
With detailed dashboards, an overview of important information can be easily accessed and reviewed on a single screen.
With these reports, managers gain better insight into decision-making and can then take the most effective measures to avoid inefficiencies.
An HRMS, for example, monitors how long each employee stays in the same position. To prevent an employee from getting stuck in a role they are dissatisfied with, the HRMS reminds managers when it is time to consider a promotion.
4. Data Centralization and Security
Employee data is arguably the most sensitive and important data that a company possesses.
Before the introduction of HRM software, this data was stored and managed in paper form, which then transitioned to libraries with spreadsheets. This approach is fragmented, error-prone, and time-consuming to manage.
A HRMS solution offers a high level of security for all employee data, managed in robust software that is very difficult to breach and provides managers with an easy way to store and review the data.
The centralization of data is also highly advantageous in terms of scalability, as when the company grows and the number of employees increases, the risk of losing track of information about new employees is minimal.
5. Compliance with labor laws
There are a variety of labor laws, tax laws, and other regulations that the HR department must keep a close eye on.
HRMS solutions typically track changing regulations, notify managers to ensure compliance with the latest regulations, and update the system to reflect these changes.
Challenges in Integrating an HRMS
Before deciding on an HRMS, the HR department and company management must determine what goals they hope to achieve.
Is the focus on improving the recruitment and onboarding process? Should a way be created to centralize data and track employee performance?
To choose the right HRMS for your company, you need to clearly define what you expect from the software. Then you can work with the provider to optimize the software for your goals.
Most providers offer a high level of customization options at different price points, so it really is up to you to make the best decision for your company.
You may already have a functioning payroll solution but want an HRMS solution for talent management.
List the goals you want to achieve with the software and the modules you are looking for.
This way, you will be able to make an informed decision when selecting an HRMS.
How to get started with an HRMS solution
Challenges in Integrating an HRMS
Before deciding on an HRMS, the HR department and company management must determine what goals they hope to achieve.
Is the focus on improving the recruitment and onboarding process? Should a way be created to centralize data and track employee performance?
To choose the right HRMS for your company, you need to clearly define what you expect from the software. Then you can work with the provider to optimize the software for your goals.
Most providers offer a high level of customization options at different price points, so it really is up to you to make the best decision for your company.
You may already have a functioning payroll solution but want an HRMS solution for talent management.
List the goals you want to achieve with the software and the modules you are looking for.
This way, you will be able to make an informed decision when selecting an HRMS.
How to get started with an HRMS solution
So, we have discussed what HRMS is, what benefits it can bring to your company, and what challenges to expect when integrating the software.
Let's now consider some of the key steps for putting this into practice.
Involve the key stakeholders from the beginning;
Consider hiring an HRMS consultant;
Work closely with the IT department to migrate the data;
Conduct thorough tests to ensure that all modules are functioning properly;
Start with user training.
Involve key stakeholders from the beginning
To ensure a successful implementation, the key stakeholders must be brought on board from the start.
The executives expect a clear return on their investment with reports and analyses that demonstrate the impact of the HRMS.
Hire an HRMS consultant
Hiring a specialized HRMS consultant can be a good idea if your HRMS integration is complex or if your company lacks the necessary expertise.
A consultant is not necessarily required for the success of the system, but a quick cost-benefit analysis can help you determine if this is a sensible step for your company.
Work closely with the IT department during data migration
The process of data migration is complicated, sensitive, and requires a certain level of expertise. Close collaboration with the IT department through delegation and careful monitoring of progress is a crucial component of HRMS integration.
It is also worthwhile to ask users to personally verify that their own information is correct. In this way, not only is data integration maintained, but it also provides the opportunity to engage employees with self-service functions.
Conduct thorough testing to ensure that all modules function properly before rolling out the software organization-wide.
Start with user training
The system is set up. Everything is working as it should. Now it is time to train the users and familiarize them with the use of the software.
Ideally, the training should have both a personal and a team component.
Over the course of several weeks, hold a series of team meetings to demonstrate the use of the software for different roles (employees, managers, executives). Include detailed Q&A sessions to answer all employee questions. This will make them more willing to use the product as expected, increase accountability, and enable personnel managers to perform their tasks more effectively.
For employees who have difficulty familiarizing themselves with the software, personal training and coaching should be conducted.