What are the functions of HRMS?

HRMS is a streamlined, cloud-based system designed to enhance HR professionals' ability to manage employees and generate HR-related data with greater accuracy, efficiency, and ease. By leveraging automated processes and a centralized database, HRMS facilitates quick storage, update, and sharing of information, along with real-time, data-based reporting.

Key Functionalities in an HRMS

When customized to fit organizational needs, HRMS minimizes or eliminates HR paperwork by coordinating workflows, keeping management and employees updated on critical HR policies and data. Common functionalities covered by HRMS include onboarding, offboarding, performance management, data management, benefits administration, applicant tracking, time-off requests, schedule adjustments, and succession planning.

HRMS vs. HRIS vs. HCM: What’s the Difference?

While these terms are often used interchangeably, there are key distinctions: HRIS: Stands for Human Resource Information System, primarily focused on storing employee information electronically, including basic HR functionalities like documentation management, attendance tracking, and compensation management. HRMS: Modern advancement of HRIS, encompassing all HRIS functions and more, such as applicant tracking and learning and development functionalities. HCM: Stands for Human Capital Management, covering tasks from applicant screening to employee monitoring, including compensation, benefits, scheduling, performance, and more. Today, comprehensive HRMS systems effectively include HRIS and HCM functionalities.

Why Companies Should Use an HRMS

Implementing an HRMS offers several benefits, including: Higher accuracy and speed in various HR tasks, thanks to centralized data storage. Faster and cost-efficient recruitment processes. Improved employee engagement, retention, and onboarding optimization. Better talent management, succession planning, and decision-making with a holistic view of employee data.

When to Implement an HRMS

It's time to transition to an HRMS when: Accurate financial data reporting becomes time-consuming. HR spends excessive time on tasks employees could complete independently. Labor costs escalate, requiring insight for increased profitability. Critical decisions require insight into employee data. Greater organization and transparency are needed as the organization scales. Streamlined onboarding processes and talent management become essential. Inaccuracies in employee management and information reporting result in financial losses.