What is HRMS?

An HRMS is an advanced software suite used by organizations worldwide to automate the HR department's daily processes. It helps streamline the administrative tasks of HR to improve their efficiency and keep the employees engaged and satisfied with their company.

Whati s HRMS Software

HRMS Software Guide


  • What is HRMS Software?


  • Modern HRMS have become so advanced that they can intelligently adapt according to the changing requirements of a growing organization as well as play an active part in providing in-depth analysis of various departments in the company. They achieve this amazing feat by utilizing artificial intelligence to predict the outcomes of certain changes within the organization.


    The main goal of the HRMS suite is to help the HR department achieve maximum efficiency. They support and help the HRs by being a constant companion to their numerous repetitive and administrative tasks. They can also take care of other aspects of HR functioning such as parsing resumes and sorting candidates, automating payroll and attendance, answering employee queries, etc. All of these factors enable the HR department to keep the employees engaged and satisfied with the company.



  • Need for an HRMS


  • In the early days of HR, all of the tasks were conducted manually with the help of registers. With the digitization of the workplace, the registers were replaced by computers and spreadsheets quickly became the go-to software for performing HR duties. Spreadsheets became so commonplace that a new HR was supposed to know the working of Microsoft Excel if they wish to make a career in human resources.


    With the permeating of high-speed internet services into offices, the focus shifted to developing online software to ensure that it can be accessed from anywhere. However, none of these changes was as drastic as the ones from the last decade such as the introduction of artificial intelligence, machine learning, cloud computing, predictive analysis, chatbots, etc.


    With the advent of the aforementioned technologies, HR shortly became the hotbed for employee engagement. Modern HR is armed with invaluable research and data sheets filled with employee analytics and, with the help of AI, ready to tackle any obstacles in their path. Modern Human Resource Management systems are so advanced that they can even analyze the leave and productivity changes and predict whether an employee is thinking of leaving the company and provide suggestions to help them stay back.


    All of these aforementioned factors goes on to show that HRMS has become an integral part of the HR process. ‘Automation’ and ‘engagement’ are a part of the core HR function nowadays and tackling them is simply impossible without a Human Resources management system.


    To summarize, you require Human Resources Management Software for:


    • Centralized secure database management
    • Error-free payroll & compliance automation
    • Keeping the employees engaged
    • Taking decisions based on concrete predictions
    • Quickly parsing resumes & shortlisting candidates
    • Maintaining accurate attendance & leaves details
    • Developing custom interactive reports
    • Analyzing employee behaviour, etc.



  • Modules of an HRMS


  • As with any online software, an human resource management system is composed of several modules, which are explained below:


    • Recruitment & Onboarding

    • This module helps HR in developing a job profile, setting salary expectations, searching for the right candidate, scheduling interviews, generating candidate reports, etc. In other words, it undertakes the various tasks associated with searching for a new candidate whenever a new position opens up in the company


      A major part of the recruitment module is the ATS or Applicant Tracking System, which helps HR in tracking suitable candidates, parsing their resumes, keeping them warm with regular notifications, updating them regarding their application status, etc. Due to the ATS, HRs can shortlist the best candidates quickly and schedule interviews easily and even create a talent pool to streamline the process for future placements.


    • Employee Information Management

    • Employee information is one of the most invaluable resources for any HR. Hence, this module helps you in carefully handling the same. Maintaining employee records is crucial for any company and any kind of errors in the database should be eliminated at the earliest.


      The employee information management module helps you in keeping the employee database updated by providing the employees themselves with the option to update their details such as full name, age, blood group, contact details, address, spouse details, anniversary and birthday information, educational qualifications, work experience, etc. It also ensures that the database is protected by requiring HR approval for any changes made by the staff members.


    • Training & Mentorship

    • Training programs are crucial for the effective management of employees in a company. They help in upskilling the staff, which helps them understand that the company values them enough to play an active role in their growth. This realization leads to improved loyalty to the company, thereby reducing employee turnover.


      The major hurdle with employee training has been the additional overhead of scheduling it as well as developing the materials for the training, which makes it costlier for the company. However, with the inbuilt training module of the human resource management system, you can upload training videos and let the employee access the same from anywhere. They would be free to complete it at their own pace, which also ensures maximum voluntary participation.


    • Payroll & Compliance Management

    • Payroll calculation and statutory compliance management are two of the major challenges for HR. This module deals with automating the same to ensure timely error-free salary disbursal. The calculation of salaries is a time-consuming complex process as it requires one to take into account several factors such as the total working time of the employee, their attendance, bonuses and commissions, additional perks and benefits, leaves, statutory deductions, etc.


      Hence, performing the same task repeatedly for each salary cycle takes a toll on HR and in case of errors, it might even lead to delayed salary distribution which proves detrimental to the employee morale. With the compliance and payroll management module, one can automate the entire payroll process and hence, reduce the burden on HR, while also ensuring that it is error-free and statutory compliant.


    • Expenses & Travel Management

    • It is hard to constantly keep track of daily office expenses. However, being a business, one needs to ensure that the records are kept tallied all the time. In the absence of the expenses and travel management module, this becomes a herculean task. On the other hand, with the help of this module, HR can set monthly expense limits and enforce reimbursement policies.


      The expenses and travel management module help with easy reimbursements thanks to the functionality of uploading invoices for the covered itinerary. This module saves a lot of valuable productive employee time by removing the need for running after approvals from various sections as the same can be obtained in a matter of a few clicks.


    • Attendance & Leave Management

    • Accurate attendance tracking is impossible without the assistance of an attendance management system. It helps the company in capturing the login and logout timings of the employees accurately with the help of biometrics. Modern systems utilize even GPS data of employee smartphones to accurately mark their attendance.


      Similarly, leave management is another aspect of HR that the leave management system helps in operating easily. With the option to apply and approve leaves as well as auto-debit and leave balance calculations, leave management gets automated with this module. One can also customize the leave policies as per the industry and company profile to ensure maximum compatibility.


    • Performance & Appraisal

    • Performance management has been a hectic task traditionally since it requires constant monitoring of employee performance and developing their feedback accordingly. Moreover, one also needs to take into account the improvements showcased by the employee before finally providing feedback. One also needs to check whether the employee is implementing the suggested changes to understand their improvement.


      All of these tasks eat a huge portion of the productive time of the HR department. However, with this module, it becomes much easier to set and track the KRAs and KPIs of individual employees. It also helps in quantifying the performance and associated improvements and thus, aids in deciding the exact amount for appraisal. On the other hand, a detailed PIP can also be drafted based on the suggestions provided by the module for low performers.


    • Rewards & Recognition

    • The new-age employee is well aware of the various additional benefits and perks provided by the company, as well as the different rewards that are given to achievers. Especially, the millennials value these perks and compete to receive the coveted rewards, thus gamifying their daily work.


      The rewards and recognition module works in tandem with the performance management system to help HR in recognizing the right employees for rewards. It helps in quantifying the employee performance and makes it easy to customize and provide rewards as per each employee’s preferences. All of these factors help in creating an atmosphere of healthy competition and transparent rewarding in the workplace.


    • Employee Self Service Portal

    • Employee self-service portals are a necessity for modern HR as well as the employees. With the help of this module, the employee can view and edit any information related to their employment whenever and wherever they feel so. In helping the employee access this information, the employee self service portal is also effectually freeing HR from repetitive employee queries.


      Additionally, with access to different kinds of information such as annual attendance, the number of remaining leaves, list of annual holidays, various HR policies, payslips, loan information, timesheets and other information related to one’s employment with the company, an employee need not contact the HR unnecessarily. Having this information at hand helps in keeping the employees engaged with the company.


    • Mobile App

    • With the workplace undergoing multiple transitions, it has reached a point in time where it can be fully remote. Most of the white-collar jobs can be done with the help of a computer. Modern smartphones and tablets have also advanced to the level of complexity required to help employees in completing their daily tasks. Hence, fully remote workplaces are slowly becoming a reality.


      The rise in the popularity of remote and hybrid workplaces necessitated the introduction of an HRMS mobile app. This app would be able to provide all of the functionalities provided by the employee self service portal in the absence of a computer. It will also help HR in undertaking their daily duties and accessing various information remotely, thereby making HR truly mobile.


    • Survey & Feedbacks

    • Feedbacks are important in the daily work of any company. The managers and supervisors can provide valuable feedback to their employees to help them work better. Positive feedbacks also motivate the employees to work in the company for a longer period. It helps them realize their value for the company too.


      Similarly, surveys help the company understand how the employees perceive the company and its processes. Surveys are the gateways for providing invaluable insights into employees’ thinking and understanding of their issues and concerns. Based on the survey responses, one can make the necessary changes and help the employees understand that their opinion is valued by the company. Hence, both of these are vital modules of any human resources management system.


    • Help Desk

    • The Help Desk is tasked with answering the employee queries and resolving any issues that they are facing in the company. It is also called as ‘Grievance Handling’ department in some companies. It is one of the most influential components of human resources management solution as it directly affects employee engagement. Resolving the employee issues on time goes a long way in improving their job satisfaction and engagement with the company.


      Due to the transparency provided by the system, it also becomes easy for the employee to track their query. The help desk module also streamlines the process of query resolution, thereby reducing the turnaround time required for its resolution.


    • Analytics & Reporting

    • The analytics and reporting module of Human Resources Management System plays a major role in further improving the company’s overall performance. It does this by providing the numbers to understand what is working well and which part needs improvement. In the absence of such a module, one needs to manually monitor the various parameters to understand whether things are going up or looking downhill.


      This module also helps in generating custom reports which can be shared with upper management whenever required to provide an overview of the various departments. It can also prove useful in comparing the effectiveness of various policies or any other area, wherein things can be effectively quantified.


    • Employee Separation

    • Employee separation is also a major part of the employment experience and hence, one needs to ensure that the employee leaving the company is also treated with the same respect that one bestows on their current employee. The separation module is in charge of handling the various processes related to employee separation such as scheduling exit interviews, sending exit surveys, processing the final payroll, processing full and final settlement, etc.


      The separation module ensures that the exit process is smooth for the employee and the necessary documents such as experience letters, relieving letters, etc. are furnished on time. It also ensures that any company asset provided to the employee is safely recovered from them with minimal effort.



  • Choosing the Best HRMS Software


  • There are various kinds of HRMS solutions available in the market currently. From the most basic HRMS consisting of core HR only to the ultra-modern systems employing the latest technologies such as artificial intelligence, machine learning, predictive analysis, etc. Depending on its needs, a company has to choose wisely so as not to go overboard with the modules while also ensuring that one acquires all of the necessary modules.


    Hence, let us take a look at the various aspects of choosing the right HRMS:


    • Understanding the Modules of HRMS Software

    • Since there is a wide variety of HRMS Software available in the market, it is wise to understand the various individual modules which comprise the HRMS platform. There might be some modules that might improve the individual sections of your HR department, while there might be others that would be of no use to your company.


      For example, if none of your employees works remotely, deploying an HRMS developed for a remote workforce would be futile. Additionally, it is imperative to understand that you may not require all of the modules of a feature-rich HRMS. Hence, one should always check whether customizable plans are available for your convenience, especially if you are looking for a budget offering.


    • Adaptability & Accessibility

    • The ability to customize the HRMS platform under consideration is one of the basic requirements that need to be fulfilled before finalizing the perfect one for your company. However, while doing so, you need to consider the additional time and cost spent on adapting the solution as per your company requirements.


      Additionally, you need to take into account the ease of using the software by looking at it from an end-user perspective. After all, it is they who will be using the software for accomplishing their daily tasks. Since the system is being implemented to improve the efficiency of the HR department, deploying it should not have the opposite effect by making them spend more time undergoing extensive training for operating it.


    • Scalability & Automation

    • The whole point of an HRMS Software is to automate all or most of the routine clerical tasks of the HR department. However, most of the HRMS platforms simply digitize the tasks while requiring manual intervention from the HR themselves to complete them. Hence, one must take into account the automation aspect while considering an HRMS platform and prefer a platform that employs AI or machine learning to fulfil daily tasks.


      On the other hand, scalability is another factor that is vital for any HRMS solution. Choosing an HRMS suite is a long term commitment and in the meantime, your company is bound to grow. It is crucial that your HRMS Software ‘grows’ along with your organization to accommodate any new departments and processes that you might launch down the line. Hence, always enquire about the scalability of the HRMS before finalizing any specific one.


    • Customizations & Integrations

    • Customization is another factor of HRMS Software which needs to be considered while choosing an HRMS. The system should be able to work as per your company structure and it should not be the other way round. You should check with the HRMS vendor regarding the customizability of the software as well as understand how flexible it is in mapping your organization’s policies and structure.


      The HRMS platform would encompass the entire HR division and hence, it needs to integrate well with other software that they use daily. Software integrations should always be a major consideration in your pursuit of searching for the perfect HRMS. An ideal system would always provide APIs that help in integrating the software with other popular software used in the daily HR processes. This ensures that the tasks are more streamlined.



  • Types of HRMS Software Deployment


  • When it comes to HRMS Software deployment, there are three significant configurations:


    • On-Premise HRMS Software

    • On-premise deployment utilizes the company’s infrastructure to deploy the hardware such as the servers used to host the HRMS. In this deployment configuration, the company that is using the services takes care of the hardware and software maintenance.


    • Hosted HRMS Software

    • Hosted configuration is similar to on-premise, except for the fact that the server and related hardware are maintained by a third-party service provider. Hence, the maintenance of the hardware is undertaken by the service provider instead of the company using the services.


    • Cloud-based HRMS Software

    • Cloud-based deployment is the most convenient option since the software vendor is the one tasked with maintaining the servers, related hardware as well as updating the software. The company using the services pays an annual or monthly fee to do so.



  • Emerging Trends in HRMS


  • There are several major trends that are emerging in the HRMS market that are bound to make an impact on the HR industry as a whole. Some of the prominent ones are:


    • Artificial Intelligence

    • AI has found a myriad of applications in several business verticals and HR is no different. AI is actively being used in HRMS to find patterns, streamline multiple processes and even predict employee behaviour for customizing their experience with the company. In the coming future, AI’s impact on the HR department is bound to rise extensively.


    • Engaging User Interface

    • Gone are the days of boring tabular user interface which wasn’t much different from the spreadsheets that the HR was accustomed to. Modern HRMS platform comes with intuitive UI that makes the HR enjoy using the software. Of late, there has been an emphasis on making the software experience enjoyable for the end-user with the help of subtle UX changes and the same is trickling into the HRMS interfaces too.


    • Biometric Attendance

    • Employee attendance has been traditionally conducted with the help of ID card swipe and fingerprint readers in companies that have deployed an HRMS. However, with the improvement in technology and hardware, many companies are utilizing face recognition, geo-tagging, etc. to further enhance the security of their attendance modules.


    • Remote & Hybrid Work

    • Remote working is steadily becoming widespread due to the penetration of broadband internet and accessibility of the HRMS platforms. Hence, HRs would soon be able to manage everything from the comfort of their homes and companies would also be willing to provide remote and hybrid working facilities to their employees.


    • Integrations

    • Integrating HRMS with other software used by HR daily, ensures that their processes are streamlined, thereby improving their efficiency. Software integrations are bound to enhance the functionality of already feature-packed HRMS platforms, which in turn, would reduce additional overheads required in manipulating data to be compatible with different software.


    • 540-degree Feedback

    • Employee feedback goes a long way in improving their morale and engagement with the company. With the help of modern HRMS, HRs will be able to go above and beyond by providing 540-degree feedback to their employees which would ensure that they are getting a complete picture of how others are perceiving their work and behaviour and act on improving the same.


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