Today, the scope of HR has widened further. With growing employee strength and a competitive market for business, HR has to focus on other additional activities to ensure the wellbeing of employees when at work. This has necessitated companies to put in place a robust, integrated and automated system that brings all the activities of human resources under one roof and provide unified services to one a and all. In other words, an HRMS.

With the advent of technology and innovation in business, the importance of HRMS has increased exponentially in recent years.

What is HRMS?

HRMS or Human Resource Management System is essentially a human resource software which meticulously combines all the different HR processes and systems to ensure easy management and smooth functioning of data, human resources and different business processes.

The application of HRMS is aimed at enhancing the performance of employees to help accomplish the business goals of the company. So let us check out the importance of HRMS in a company.

Importance of HRMS

HRMS plays a vital role in the smooth functioning of different HR functions, such as:

  • Storage of employee data

HRMS facilitates the safe and efficient storage of employee data. With the help of HRMS, an HR representative can easily process employee information on the system without wasting much time doing the paperwork. Plus, the software system is an efficient way to store and recall employee data as and when required.

HRMS eliminates the tedious paperwork and other employee record-keeping activities such as employment history, education qualification, training certification, compensation and benefits, and personal identification proof. The HRMS helps to store all this system efficiently safely and securely so that the data can be retrieved for administrative purposes.

HRMS also helps to speed up the documentation process for new hires, which greatly helps during the hiring and onboarding process.

  • Employee payroll management

HRMS can efficiently manage the payroll of all the employees in the company. Now, payroll management is not just limited to the payment of salary. It includes a wide spectrum of activities that need to be included as a part of employee compensation management.

HRMS can help with critical HR tasks efficiently—such as salary payouts, tax deductions, and leave encashments. HRMS streamlines these processes, reducing the chances of human errors and malpractices while collating the data. Not just in one location, HRMS can combine the payroll management of all employees of the company across all geographical locations.

Any discrepancies in payroll data can result in the downfall of any business. Therefore, managing payroll effectively is of extreme importance. And, there is no better way to manage payroll than to apply HRMS.

  • Recruitment management

Manual hiring and onboarding process is a tedious and time-consuming process. Not just that, it involves a lot of manpower and extensive man-hours, which can be used for more productive activities. It is time to now make your hiring and onboarding process simpler, quicker and efficient.

And that’s where the HRMS software comes in. It is a simple, easy to use software that greatly reduces human effort and time spent in hiring by automating the various aspects of recruiting, including sourcing, screening, documentation and onboarding.

Thus, you can now easily accept resumes and online applications, screen the applications to shortlist the fittest candidates and manage a pool of ideal candidates for future job openings.

  • Employee benefits administration

Employee benefits usually include other non-wages compensation provided to employees over and above their normal salary. For instance, housing or accommodation, insurance, retirement benefits, sick leaves, paid leaves and so on.

HRMS helps with the efficient administration of the employee benefits program of the company. With the help of HRMS, you can protect the rights and benefits of the employees by efficiently managing their overtime, workplace safety, bonuses, arrears and insurance reimbursement.

HRMS makes the entitlement, allocation and calculation of resources transparent to the employees and the management. This helps to solve many discrepancies in data if it were to arise eventually leading to better administration and management of resources.

  • Attendance and time management

The commitment of employees is a vital contributor to the success of the organisation. And, employee attendance and time management form the basis of employee commitment to the company.

HRMS equips the company with an efficient Attendance Tracking System (ATS). This amazing feature equips the HR professionals or managers to track the attendance and the leaves of an employee. It helps both parties to easily process the requests.

With the help of this integrated attendance system, managers can quickly access the leaves database to find the total available leaves of an employee and accordingly approve or reject the request depending on the availability. This system is also accessible to employees, which makes the process transparent. So, even employees can have access to the reasons behind the approval or rejection of attendance or leaves.

  • Employee performance management

Generally, companies monitor the performance of employees annually and provide feedback only once every year. This slows down the improvement process, as the employee has to wait for the annual appraisal to receive feedback about their performance and their areas of improvement. Also, collating the annual performance data of employees is a time-consuming process without any conclusive outcomes.

HRMS enables employers and managers to provide 360-degree real-time feedback. This makes the performance management process robust, efficient and result-oriented. Employees no longer have to wait for the yearly performance reviews to know where they went wrong. Periodic feedback with the help HRMS can help in the instant implementation of suggestions resulting in better efficiency and productivity from the employees.

  • Improves the effectiveness of the organisation

HRMS greatly enhances the organisational effectiveness of a company. It is self-reliant, which leads to consistency in the management of various HR activities. It promotes transparency and improves employee engagement within the company. With the help of various functions, such as employee appraisal and disciplinary tracking, the HRMS helps to always highlight the goals of the business and works towards improving commitment, inspiration and information among the workers.

This is evident in the effective management of employees as well as the resources of the company, which result in the growth and expansion of the company.

  • Enhances employee self-service

Empowering employees is the most standout feature of the HRMS. Employees often have many queries and doubts and seek detailed and immediate answers. It is often not feasible for the HR team to answer each query of employees, especially when the company has hundreds of employees.

In such a situation, the HRMS system can come to rescue by providing better self-service opportunities for employees. They can simply feed the policies and other data into the integrated system. And the employees can log in to their respective accounts and seek all the information they need without disturbing the HR team. This smooth and seamless flow of information boosts transparency and efficiency at the workplace.

An effective HRMS, in theory and practice, will ultimately lead to improved efficiency and greater benefits for the business. It will help the company achieve its objectives of growth and expansion.

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Shalini L

One of the prime contributors for this blog, Expertise in Staffing and Recruitment, Content Strategist by Profession. A Music Lover & Traveller by Choice.

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