What is a human resource management system (HRMS)?

A human resource management system (HRMS) is a set of software applications that assists HR professionals in managing HR functions efficiently.

The HRMS assists HR with every stage of the employment lifecycle, from recruitment to retirement and everything in between.

What features should a human resource management system have?

As a multibillion-dollar industry, there’s a diverse range of HRMS options. A typical HRMS module, however, should aid HR professionals with the following functions: 

  • Storing and organizing relevant candidate and staff information 
  • Planning benefits administration and ensuring timely, accurate payroll
  • Enhancing the talent acquisition process for candidates and employers
  • Boosting retention and engagemen
  • Offering L&D opportunities and tracking people’s progress
  • Managing compliance training 
  • Running reports and preparing KPIs for better analytics 
  • Tracking time and attendance and aligning it with payroll
  • Improving workforce and succession planning
  • Monitoring progress and performance reviews for talent management

How does an HRMS work?

Using digital automation, an HRMS organizes and displays candidate and workforce data. Because security is a priority, users need a username and password, and to use two-step verification. An HRMS also utilizes segmentation to ensure that only authorized users can access specific information.

The HRMS prioritizes convenience. When a user enters information, the HR platform reflects these changes in real time. Furthermore, an HRMS enables self-service so people can input information without having to rely on HR to do it for them. An HRMS also seamlessly integrates with other apps that offer services such as document signing, payroll, or scheduling meetings.

What are the benefits of a human resource management system?

The HRMS has played a critical role in HR evolution, upping the HR game from paper pusher to strategic people manager. It benefits companies in five core ways: 

  • Increased efficiency. By streamlining all HR functions with self-service and automatic digital filing, HR professionals can adjust their energy away from administrative work toward managing people. 
  • Better workforce planning decisions. An HRMS provides centralized, accessible data and accurate analytics, enabling data-based decisions regarding hiring, upskilling, and succession planning. 
  • Improved employee retention. Customized career planning and L&D opportunities enable people to pursue and achieve career goals and create a more meaningful and engaging work experience. 
  • Better recruitment. Using AI, an HRMS enables recruiters to source suitable candidates faster while offering them a smoother candidate experience. 
  • A smaller margin of error. Typically, HRMS software includes automatic updates regarding labor laws and regulations, ensuring HR compliance with critical new legalities.

What’s the difference between an HRIS and HRMS?

Often, people use these two terms interchangeably. Yet, sometimes a Human Resource Information System (HRIS) emphasizes storing information, while a human resource management system (HRMS) prioritizes managing information and providing advanced talent management services.  

Why should an HRMS be part of modern HR strategy?

An HRMS enables companies to keep pace in today’s accelerated work world by helping them manage their people effectively. In turn, this allows companies to compete in the current market, satisfy customers, and recruit and retain top talent.