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An Expert Guide

What is HR?

Human Resource Management or HR, an integral element of an organisation, is designed to increase employee performance as per the strategic objectives of the employer. It is primarily concerned with: Management of people in the organisation and its policies, training, development and recruitment of employees, industrial relations, organisational changes and so much more.

What is HR Management Software (HRMS)?

A HRMS or Human Resource Management Software is a software solution for organisations, to help manage and automate their HR, accounting, payroll and, employee management activities.

A HRMS offers features for effective planning, control and managing HR costs; improve managerial and employee productivity as well as achieve improved efficiency in HR decision making. The software with its flexible design and integrated databases have brilliant reporting systems that is needed to manage the workforce, and save time of the HR Administrator.

HRMS facilitate communication by providing an accessible centralised spot for announcements, company policies and links to important URL’s. Activities of employees such as W-4 form changes, time-off requests, leave requests, etc. can be automated which makes approvals faster and more effective.

Choosing the right HR Management Software is crucial as it offers options to help organisations fully understand and utilise the collective skills, experiences and talents of their workforce. The popular modules include: employee self-service (personal information, payroll information, time off balances etc. can be updated and viewed by employees), organisation charts (to create the professional organisation hierarchy, track training needs of employees and benefits) administration (improve data accuracy, reduce time and save paper, etc.)

The History of HR Management Software

The abbreviation of Human Resources, HR, came up in the 1980’s and it took over the functions of the training and personnel departments. Companies began realising that the improvement in their business, led to new requirements for training and staffing, and that their decisions should be made with the employee welfare in mind. With the growth of technology, HR organisations have efficiently moved from Personnel Management to Business Execution.

  • 1979: HRMS had its beginning in the year 1979 when SAP R/2 was launched. The integration of HR functionalities with Production Planning, Financial and Materials Management in the same database gained significant attention.
  • 1987: The next major milestone was seen in 1987 with the introduction of PeopleSoft which was an ERP built on client server as opposed to the Mainframe environment.
  • Early 1990s: However the HRMS market went to the next level in the early 1990s with vendors like JD Edwards and Oracle introducing HR ERPs which had features to cover all the functions of HR.
  • The 1990s also saw the shift from Client-server Technology to Web. The year also saw the evolution of features that could be used by all - Managers, HR personnel as well as employees.
  • Pre-1990’s was the period where personnel administrative processes were done in a traditional way and the entire focus of HR (known as ‘Personnel Department’ then) was based on the efficiency of handling employee paperwork.
  • 1990-2000 saw the term ‘Personnel Management’ being replaced with ‘Human Resources’ and evolution of ERP technology reduced the time spent on administrative tasks. This was the era when new techniques of business execution came into existence. Personal Computers began to be used for employee talent management, and for assessing candidates for jobs. This increased productivity as well as development of employees.
  • 2001-2010 was a period which saw the usage of internet by HR organisations for efficient and easy sharing of information. This helped shift their focus from employee-based decisions to more of a talent management approach. This increased the supply of talented individuals for job roles that were crucial for the company.
  • 2011-Present saw the extensive usage of Cloud Computing applications that effectively increased productivity of employees. These user friendly applications made HR professionals support business execution more actively. HR professionals are now focused on using skills of employees to achieve both short and long term goals of their organisation.

Features of HRMS

The HRMS sector continues to grow with new options and functions being introduced to meet the changing needs of HR and other employees. Some of the essential features are as follows:

Centralised Employee Database:

A complete centralised directory of profiles that include employee’s personal information, salary and job history, performance feedback, time off, leave history, banking and tax details, etc. Employee self service portal is also an important module that lets employees login and view information regarding holiday calendars, pay slips, financial benefits, insurance plans, etc.

Benefits Management and Financial Management

It includes management of health care, well-being programs, wellness incentives, coaching etc., that help employee’s increase their productivity. The compensation and salary management module of financial management helps manage base salary, bonus programs and company’s financial planning. With the help of the payroll module, keeping track of payments, employee hours, etc. becomes extremely easy. When planning budget and handling billing, a centralised accounting system makes it easier to produce accurate budgets and simplifies payable/receivable amount by automating the amounts

Time & Attendance Management

Time Tracking Software done by electronic timesheets make tracking and payroll a smooth process. The absence management module helps track the paid time-off, disability, paternity/maternity leave, etc.

The workforce scheduling function is crucial as it helps in scheduling shifts and attendance across departments, projects and locations as well as provides alerts during schedule changes.

Recruitment & Training Management

A good HR Management Software has features for creating job requisitions and posting them on popular sites for applicants to view. The module also helps the HR personnel in using the social media platforms to find qualified applicants.

Along with options to record applicant’s information, response to questionnaires, evaluation of applicants, etc. are great features to have in a HRMS. The training management module takes complete care of on-boarding and the subsequent training required by new joiners.

‘Behind-the-Scene’ Advantages Of Using an HRMS

There are so many benefits of investing in a HRMS and with the perfect combination of services and technology that can help your business in ways that you haven’t imagined.

  1. Better Communication and Improved Decision Making
    Most HR management software have an employee directory-cum-chat system that helps colleagues and those in other departments communicate seamlessly with each other regarding projects and tasks. It has been observed that in any organisation, when communication becomes proper and quick, correct information is passed on to the ‘right’ people which ultimately leads to better decision making.
  2. Saves Time and Increases Productivity
    Manual record keeping can waste a lot of time. The HRMS empowers you to have access to critical information at your fingertips! This helps you save a lot of time and effort, and this ‘extra’ time can be used to finish important tasks, thereby increasing the productivity of employees.
    Moreover, the HRMS helps improve personnel selection such that the increase in the possibility of recruiting top talents. Directly or indirectly, the HRMS takes note of and acknowledges the performance of employees in a fair and transparent manner. This helps improve their motivation which ultimately leads to increased morale and productivity. A good HRMS will also help save money by cutting over-head expenses in the organisation.
  3. Security and Disaster Recovery
    The modern HRMS keeps all confidential data extremely safe and the disaster recovery module helps maintain data backup. This enables quick restoration even in the face of serious calamities. Even in the face of a legal dispute, modern HRM Solutions prove efficient as their features include read and accept facility which provides a paper trail of communication between the involved parties.

Bottom Line

Nowadays, the Human Resource area of a business organisation has become very important. At a time when the availability of Skilled and Experienced manpower has become scarce, Human Resource Management Systems can go a long way in helping the organisations streamline their HR management. The software can help organisations cut-down on expenses, make the processes