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.
What is Human Resource Management System (HRMS)
A Human Resource Management System (HRMS) is a suite of software that assists HR professionals in managing overall HR practices, including employee recruitment, leave and attendance management, payroll, onboarding, offboarding, and more. Besides, the system automates key HR processes by consolidating and analysing employee data, deriving valuable insights to improve overall workforce management, so that HR teams can spend less time on employee-related manual tasks and focus on team member development and decision-making.
History of Human Resource Management Systems
Today, the human resource management system is not only a process for managing employee data, but also incorporates innovative technologies such as automation and cloud connectivity. However, the process of human resource management began in the pre-1970s; here is a landscape of its evolution over the years.
Early Eras (Pre-1970s)
In the earliest stages, HR responsibilities were limited to collecting employee attendance data, analysing performance, and delivering compensation according to predefined intervals. Overall, it was manual data entry focusing on basic personnel and welfare needs.
However, after the industrial revolution, the need for employment-related data entry and analysis, as well as for delivering constructive feedback, became essential. Multiple labour laws were updated, and large companies began using rudimentary systems, such as punch-card machines, for basic tasks such as payroll processing.
The Age of Automation (1980s-1990s)
From 1980 to 1990, the personal computer revolution happened in the modern tech market. Companies plan to integrate HRMS assistance, which includes administration and compliance reporting. By the 1990s, the internet was blooming worldwide, which was reflected in the web-based HR system. In this era, the rise of job boards, ERP integration, and employee application-tracking systems also occurs.
The Modern Era (2000s-Present)
It is the golden era of HRMS, where companies have experienced a massive evolution from manual employee data handling to the integration of artificial intelligence into the workforce. The dedicated employee database management is transformed into a cloud-based system, along with enabled assistance such as ESS, Payroll, and performance-tracking tools. Recently, artificial intelligence (AI) and machine learning welcomed 24*7 chatbot support for effective employee management.
Modules of an HRMS
In recent years, HRMS has become more than just an ordinary employee database management system. It includes every phase of the employee lifecycle. In a company, from candidate sourcing to interview scheduling, transparent hiring, employee training, performance evaluation, reward and feedback generation, and employee exit, HRs perform smoothly with the assistance of the HRMS. Here is a detailed description of the features that streamlined HR practices.
1. Recruitment and Onboarding
This module helps HR develop a job profile, set salary expectations, search for the right candidate, schedule interviews, generate candidate reports, etc. Employers can use a recruitment management system and related candidate sourcing tools for streamlining the entire employee hiring process. Concisely, the method searches for a relevant candidate whenever a new position opens at the company. Besides, a major part of the recruitment module is the ATS (Applicant Tracking System), which helps HR track suitable candidates, parse their resumes, keep them warm with regular notifications, and update them on their application status, etc.
2. Employee Information Management
Using the ESS portal, employees submit their documents to the HRMS portal. Using employee information management, employers handle all employee-related information carefully and store employee data to ensure successful outcomes in the future.
Besides, the module helps keep the employee database updated by giving employees the option to update their details, including full name, age, blood group, contact details, address, spouse details, anniversary and birthday information, educational qualifications, work experience, etc.
3. Training and Mentorship
Training programs are crucial for effective employee management in a company. They help upskill staff, making them understand that the company values them enough to play an active role in their growth. Using the training management software, employers can efficiently identify learning needs and assign the right training sessions to the right employees, ensuring targeted development and improved performance.
Additionally, with the inbuilt training module of the human resource management system, you can upload training videos and allow employees to access them from anywhere. They would be free to complete it at their own pace, which also ensures maximum voluntary participation.
4. Payroll & Compliance Management
Payroll calculation and statutory compliance are among the biggest challenges HR teams face. A payroll management system simplifies these tasks by automating calculations, ensuring timely and accurate salary disbursal, and maintaining full compliance with statutory requirements.
By reducing manual effort and eliminating errors, this module streamlines the entire payroll process and significantly lightens the HR workload.
5. Expense & Travel Management
It is hard to keep track of daily office expenses constantly. However, as a business, one needs to ensure that the records are kept in order at all times. In the absence of the costs and travel management module, this becomes a herculean task. On the other hand, with this module, HR can set monthly expense limits and enforce reimbursement policies.
HR professionals use the expense management system to track the amount that needs to be reimbursed; on the other hand, the module is essential for the employees as it 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.
6. Attendance & Leave Management
Accurate attendance tracking is impossible without an attendance management system. It helps the company accurately capture employees’ login and logout times using biometrics. Modern systems utilise GPS data from employee smartphones to accurately mark their attendance.
Similarly, leave management is another aspect of HR that the leave management system helps in operating efficiently. 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 customise leave policies to align with the industry and company profile to ensure maximum compatibility.
7. Performace & Appraisal
Performance management has traditionally been a hectic task, as it requires constant monitoring of employee performance and developing feedback accordingly. The presence of a performance management system with features such as KRAs and KPIs is the one-stop solution for tracking, evaluating, and providing constructive feedback on employee performance.
Besides, the module also helps quantify performance and associated improvements, thereby aiding in deciding the exact amount for appraisal. Moreover, a detailed PIP can also be drafted based on the suggestions provided by the module for low performers.
8. Rewards & Recognition
The new-age employee is well aware of the additional benefits and perks offered by the company, as well as the rewards 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 recognise the right employees for rewards. It helps quantify employee performance and makes it easy to customise and provide rewards based on each employee’s preferences. All of these factors help in creating an atmosphere of healthy competition and transparent rewards in the workplace.
9. Employee Self Service Portal
Employee self-service portals are a necessity for modern HR and employees alike. With the help of the 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.
10. Mobile App
With the workplace undergoing multiple transitions, it has reached a point where it can operate fully remotely. 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 needed to help employees complete 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. The HRMS software can be smoothly handled through mobile apps. This app would provide all the functionality of the employee self-service portal without a computer. It will also help HR in undertaking their daily duties and accessing various information remotely, thereby making HR truly mobile.
11. Survey & Feedbacks
Feedback is essential in the daily work of any company. Managers and supervisors can provide valuable feedback to their employees to help them work more effectively. Positive feedback also motivates employees to stay with the company for longer periods. It helps them realize their value for the company too. HRs can use the performance-tracking tools and other feedback-generating software in the HRMS system to generate real-time feedback for employees.
Surveys help companies understand how employees perceive workplace processes and identify their concerns. They offer valuable insights into employee thoughts, enabling HR to make meaningful improvements. When employees see their feedback driving change, they feel valued and engaged. For this reason, both feedback & surveys are essential modules of any human resources management system.
12. Help Desk
The Help Desk is tasked with answering employee queries and resolving any issues that they are facing in the company. It is also called the ‘Grievance Handling’ department in some companies. It is one of the most influential components of a human resources management solution as it directly affects employee engagement. Resolving employee issues promptly goes a long way toward improving their job satisfaction and engagement with the company. The help desk module also streamlines query resolution, reducing the turnaround time.
13. Analytics & Reporting
The analytics and reporting module of the 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 must manually monitor the parameters to determine whether they are trending up or down.
The module also helps generate custom reports that can be shared with upper management whenever required to provide an overview of the various departments. It can also prove helpful in comparing the effectiveness of multiple policies or other areas where things can be effectively quantified.
14. Employee Separation
Employee separation is an essential part of the employee lifecycle, and it must be handled with the same respect as active employment. The separation module streamlines offboarding by scheduling exit interviews, collecting feedback, processing final payroll and F&F settlement, issuing documents such as experience and relieving letters, and ensuring a smooth recovery of company assets with minimal effort. Employers use HRMS offboarding software to process employee exits transparently.
Difference between HRMS, HRIS, and HCM systems
The difference between HRMS, HRIS, and HCM lies in the scope and depth of HR functions they manage. HRIS is primarily focused on maintaining and organising core employee data, such as attendance, payroll, and personal records. HCM goes a step further by covering the entire employee lifecycle, including talent acquisition, performance management, learning, and workforce planning. HRMS bridges both systems by combining essential HRIS data management with the broader strategic functions of HCM. The contrast between HRMS, HRIS, and HCM helps organisations choose the right solution to streamline HR operations and enhance workforce efficiency.
Need for an HRMS
Here are the following points that highlight why the HRMS requirement is essential for streamlining HR practices and overall workforce management.
- Manual registers and paper-based HR processes were time-consuming, error-prone, and difficult to maintain. HRMS comes with foolproof support that brings accuracy and streamlines HR practices.
- HRMS enables data-driven decision-making through powerful analytics and detailed employee insights.
- Modern HRMS platforms enhance employee engagement by offering self-service features and transparent communication channels.
- AI-powered HRMS can predict employee behaviour, such as potential attrition, and suggest ways to retain talent.
- Automating repetitive tasks using HRMS reduces HR workload, allowing teams to focus on strategic initiatives.
- HRMS ensures accuracy in attendance, leave, payroll, compliance, and performance management areas where manual methods often fail.
- Modern HR tasks expanded beyond basic record-keeping, making spreadsheets insufficient for handling complex HR operations.
- The rise of high-speed internet created the need for HR systems that could be accessed anytime, anywhere.
- Overall, HRMS integrates all HR functions into a single system, making HR operations faster, more innovative, and more efficient.
Choosing the Best HRMS Software
There are various kinds of HRMS solutions currently available on the market, from the most basic HRMS that includes only core HR to cutting-edge systems that incorporate the latest technologies, such as artificial intelligence, machine learning, predictive analytics, etc. Depending on its needs, a company has to choose wisely to avoid going overboard on modules while ensuring it acquires all necessary ones. Among these options, Pocket HRMS stands out as one of the best hrms software in India because it offers advanced features, seamless automation, and complete flexibility, tailored to businesses of any size.
Emerging Trends in HRMS
Emerging trends in the HRMS sector are reshaping the entire workforce dynamics. The emergence of artificial intelligence and machine learning is one of the most significant trends, enabling smarter decision-making through predictive analytics such as forecasting attrition, skill gaps, and workforce needs. The emergence of chatbots and other virtual assistants is a powerful feature that solves audience members’ basic queries and serves as a communication channel with companies.
Besides, another key trend is the rise of cloud-based HRMS, allowing companies to access HR data anytime, anywhere, with enhanced security and scalability. Along with AI and cloud-based assistance, every company is now streamlining employee management by adopting ESSportal, which is also part of the HR trend.