Key Factors to Consider when Choosing HRMS Software

If you are in the market for HRMS software, you may have already created a list of software requirements. While these requirements mostly consist of features that you need, you should also consider other aspects of HRMS software, such as its scalability and flexibility, to ensure that you get maximum returns on your investment.

Key Factors to Consider when Choosing HRMS Software

Here are the major factors to consider when shortlisting the ideal HRMS software for your organization:

1. Payroll Management

Since payroll management is one of the most important HR tasks in an organization, your HRMS should have all related features. For example, it should be able to handle complex and distinct types of salary structures, while also automating additions and deductions for accurate calculations.

Your HRMS should include a payroll management system that is able to calculate employee taxes correctly, based on their salary structure. For example, statutory deductions like PF, ESI, TDS, etc., should remain accurate to ensure complete compliance with the national labour laws.

Additionally, your HRMS should also provide you with easy options to generate and share payslips, while also making it easier for your staff to download them whenever they need. Having such flexibility is essential in the modern connected world.

2. Statutory Compliance

Compliance is another critical aspect of HRMS solution that you should consider while choosing the right system for your business. As the statutory norms and regulations keep changing, your HRMS software should be able to stay updated with them, as any lapse would lead to hefty fines and penalties.

For example, the introduction of the New Labour Codes requires major changes in salary calculations as well as the inclusion of various kinds of workers into the system. If you have a robust HRMS, your software vendor would have already updated the system with the latest changes to ensure 100% compliance.

3. Employee Self Service Portal

In the connected digital world, Employee Self-Service (ESS) portals have become an essential part of any HRMS solution. These portals enable them to access their payslips, apply for leave and on-duty, update their personal and professional details, track their attendance and leave, etc. Having easy access to this portal enhances transparency and ensures improved engagement.

The ESS portal also enables them to register tickets for resolving issues, as well as apply for reimbursement. Modern ESS portals even enable them to generate various kinds of reports and download statutory files like Form 16, payslips, etc.

4. Time and Attendance Tracking

HRMS software also provides time and attendance tracking options to employees and HR teams. Since the system tracks it accurately, monitoring attendance via HRMS software also proves beneficial in salary calculations. Additionally, modern robust HRMS solutions offer mobile accessibility, which enables them to mark their attendance right from their smartphones. It can also easily integrate with your biometric hardware via APIs, making it ideal for attendance capture.

It also proves useful in tracking your employees’ productive hours, as the system can easily track their login hours, break timings, as well as the time allocated for different tasks with timesheets. Hence, deploying an HRMS not only helps in monitoring employee attendance but also helps in tracking their productivity.

5. Recruitment Management

The HRMS that you choose should also provide you with a robust recruitment management system, as it can vastly improve your hiring process. While it enhances your recruitment drive through enhanced automation options, it also improves the quality of candidates that you attract, making it ideal for organizations of all sizes. It also provides advanced tech-augmented onboarding options, enabling you to engage your candidates and transform them into ideal employees.

A good recruitment system also comes with an Applicant Tracking System (ATS), which screens resumes to shortlist candidates based on the requirements of the job role. Such screening ensures that you spend time only with the right candidates, further streamlining the entire recruitment process.

6. Scalability

Another major factor to consider is the scalability of the HRMS system. Since implementing an HRMS is time-consuming and costly, you should choose a system that can easily scale according to the growth of your organization. Having a scalable system ensures that it grows with your business, which helps you avoid costly implementation and data migration costs down the line.

By deploying a scalable system, you will also be able to include complex modules and additional departments without having to completely replace it. Such scalability also enables the system to keep up with rapid growth scenarios, which would include increasing the number of departments, branches, or offices, as well as having a foothold in additional countries.

7. User Interface

Having a good user interface provides you and your employees with an improved and engaging software experience. Hence, you should also consider the user-friendliness of your HRMS software while choosing the ideal one for your organization. With an intuitive user interface, you can reduce the amount of training required while also increasing the adoption and usage of the system throughout the company.

Having a well-thought-out user interface can also reduce the amount of ambiguity users experience, making it easier to access and use the system. Similarly, it also ensures that all employees use the system for their tasks rather than going to the HR team for simple queries. It also relieves the HR teams from having to repeatedly answer the same questions.

8. Flexibility

Additionally, you should also consider whether the system that you are trying is flexible enough to accommodate any specific requirements for your business. The software vendor should be able to add or remove modules based on your exact requirements, as it would ensure that the system bends according to your company’s exact requirements.

Having the flexibility to add or remove modules as and when required also results in maximum utilization of your investment, as you are paying only for the features that you and your employees will be using daily. Hence, you should discuss customization and flexibility beforehand to ensure that they can provide the exact features that you are looking for.

9. Available Integrations

Since HR is a department that needs to coordinate with several other departments in the company, your HR software should also be able to do the same. For example, your HRMS should be able to communicate with accounting platforms like Tally to process employee salaries and reimburse them accurately.

Hence, you should make a list of the systems that your HRMS software needs to interact with daily and verify whether your HRMS vendor is able to integrate them into their system. Such integrations enable you to have a streamlined workflow, where the systems will interact with each other, while you simply take care of the processing.

Conclusion

Choosing HRMS software is one of the most important decisions that you can make for streamlining your HR department. Hence, you should carefully consider the software requirements, as well as understand the nuances of the shortlisted systems. You should carefully consider all the major factors that we shared in this blog to find the ideal system that fulfils all your requirements, including the unique ones, which may require additional customizations from the vendor.