The simplest definition of HRMS

 

HRMS is abbreviated as Human Resource Management Software or a Human Resource Management System that helps HR professionals to automate their repetitive tasks in the HR workflows such as collecting and storing resumes, parsing resumes, saving candidates to the talent pool, automating job postings, providing employee self-service portal. An HRMS is also commonly described as a tool used to attract, engage, and delight employees throughout the employee life-cycle. 

An HRMS is a technology that helps you focus on your organization’s relationships with candidates, and employees throughout your life-cycle with them.  This includes finding new candidates, interacting and engaging them, testing and hiring them, and supporting them throughout the relationship.

There is also a range of HRMS software available in the market depending on the unique shapes and sizes of businesses. For example, Freshteam is a comprehensive HRMS software that works with you in the complete life cycle of an employee. From when he is a candidate to the new hire to an employee until he exits the company. Freshteam can help you automate a ton of workflows such as storing employee data, collecting and parsing candidate resumes. You can get a professional-looking career site in minutes, and easy-to-use talent pool, time-off management, proactive onboarding and offboarding, all with Freshteam. 

A Quick overview of HRMS

The usage and demand for HRMS started when a lot of talented recruiters could not bring cadence to their hiring and onboarding workflow. Considering adopting a culture for their company, HR professionals realized they need to focus more on employee onboarding for better employee retention. This would be workable only if they could automate their monotonous HR workflows, enabling them to laser-focus on things that require human intervention. Automating HR workflows comes with an added advantage of personalizing and customizing the entire employee journey according to different employee persona.

Nowadays businesses use HRMS in a variety of ways including staying compliant to data regulations, expanding their candidate reach, increasing employer branding, etc. For example, if a business is concerned about onboarding its new hires effectively, they might require an employee onboarding software. While if a business is worried more about increasing its employer brand, they should probably look into optimizing their career site to attract more candidates. A business that wants to understand and measure the HR KPIs requires an intuitive dashboard that helps them learn their metrics on the go! A complete and ideal HRMS gives all of this in one place. 

Gartner predicts that about 46% of employees remain dissatisfied because of poor employee experience. To increase employee satisfaction, organizations need to start focusing on how employees feel about it from day one. A HR can majorly do this by putting the time needed for it. Most hours of an HR's life is spent at tasks like paperwork, posting jobs, calculating KPIs, things we could automate. From engaging new candidates to retaining potential new hires, an HRMS helps in improving employee/candidate experience by enabling HRs to automate repetitive processes and focus on more human, paperless process. This involves everything from scheduling interviews to communicating and engaging with candidates to e-signing documents, sending welcome kits, etc. 

How does an HRMS work?

A Human resource management system helps you find new candidates, evaluate them, and keep them happy by organizing your onboarding program and welcoming them in a way that helps you build stronger relationships with them and grow your employer brand faster. 

Components of HRMS

The major components of an HRMS are ATS, Employee Onboarding/Off-boarding, Time-off management, Payroll, and most importantly, Employee Information System.

There is a range of HRMS software available in the market depending on different shapes and sizes of businesses. For example, Freshteam is a comprehensive HRMS software that can help you automate a ton of workflows such as storing employee data, storing and parsing candidate resumes, saving potential candidates’ profiles in the talent pool, managing timeoff, onboarding and offboarding along with giving easy to use org charts and information system for employees. 

To understand what exactly an HRMS does, let’s study the different components of HRMS in detail

ATS

An applicant tracking system(ATS) helps HR professionals to manage job postings, source candidates from different sources, screen resumes, engage with candidates, assess and make offers, and do more. Some of the major concerns of HR professionals these days are to do all of these from a central location and this is exactly what an HRMS serves for. 

Let’s try and understand some of the common HR challenges without an ATS:

Customizing application forms and job descriptions.

An ideal ATS should allow you to customize your candidates’ application based on the role that they are applying for. Another herculean task is to write job descriptions each time you post a new job. With a comprehensive ATS, you can easily reuse the template that’s been readily provided with a few edits to bring in your org's brand. 

Onboarding & Off-boarding

Onboarding involves tasks like monitoring onboarding tasks, sending out onboarding checklists to new hires and internal teams, sending welcome kits, getting candidates to e-sign are some of the onboarding tasks that your HRMS can help you automate and do in a breeze. 

Challenges in onboarding include sending out multiple documents, knowing how many have signed and how many have not and sending reminders to those, sending easy emails about day one, and more.

Employee Information System

Human errors are very common in Human Resource Management. Providing your employees the ability to self-service, lets them set up their profiles with the right information. It’s also important to understand who belongs to which team, who reports to whom to understand the organizational structure inside out. This is where org charts can be of great help. All your employees’ documents can also be recorded and maintained in one place using an Employee Information System . When you want to look up to someone, you can directly look into the employee directory for their email ID or phone number. You can also configure to restrict users from seeing specific information based on their roles.

Time-off Management

When you have multiple remote offices, it becomes tedious to communicate the time-offs/public holidays according to every region. An HRMS enables you to create custom time-off policies, define rules, and manage holidays. One of the main challenges with time-offs is keeping track of the carryovers and available ones. An HRMS should help your employees check their time off balances and book time-offs in just a few clicks. The manager receives an instant notification and can approve or decline it right away. It also helps managers keep track of unauthorized leaves thus reducing administrative time and costs. 

Working of an HRMS

An HRMS can help manage, distribute, and maintain various employee and candidate information and workflow across the HR department. A cloud-based HRMS also enables employees to access the self-service portal to update their information at ease avoiding human errors. A good HRMS will keep a business compliant, automate workflows, and manage employee database and help in tasks as simple yet crucial as employee document sharing. A human resource management solution helps you find new candidates, organize employee information, collect and parse candidate resumes, and keep them happy through a collaborative network. HRMS systems start by collecting a candidate’s resume, parsing it, storing it, and do more, across multiple sources and channels. It may also automate job postings on multiple sites and social media, such as Linkedin, Facebook, etc and it can keep the entire hiring team informed with continuous communication. The HRMS tool organizes this information to give you a complete record of analysis on recruitment, leave management, and employee records overall, so you can better understand your relationship over time. An HRMS platform can also connect to other business apps that help you perform actions that might need a third-party application otherwise. HRMS solutions today are more open and can integrate with your favorite business tools, such as document signing, ESPs, and Google Calendar, so that information flows both ways to give you a true 360-degree view of your candidate/employees.

Who needs an HRMS?

An HRMS system gives everyone — from Talent acquisition specialists to People Experience Officers, or Human Resources Professionals — a better way to manage the influx of job applicants and candidates, interact with new hires, and manage the existing employees. An HRMS tool lets you store and manage candidate resumes, employee records, employee profiles that hold details like their contact information, org charts, photo, and manage their leave requests, all in one central location — and make information about every employee available to anyone at your company who might need it. 

With visibility and easy access to data, it's easier to collaborate and increase productivity. Everyone in your recruitment/interview panel team can see how candidates have been communicated with, their profile, who’s handling the interview, when the interview is, and so much more. HRMS can help companies of all sizes drive business growth, and it can be especially beneficial to a small business that wants to scale up in terms of employee count, where teams often need to find ways to do more with less.

Does a small or medium-sized business need HRMS? 

A small business can have a laundry list of benefits by using an HRMS platform. But here are the top 6 reasons why they should:

Paperless onboarding: An ideal HRMS reduces the amount of paperwork that might otherwise be involved in managing candidates and employees. Right from storing candidate resumes to getting the offer letter signed, everything is electronically seamless with an HRMS.

Employee Self-service: An HRMS that supports self-service portal makes tasks easier for the HR. It also comes with an added advantage of less human error. 

Better workforce management: A comprehensive HRMS enables you to understand who is present for the day, who isn’t, who will not be etc..thus helping you delegate tasks to your employees promptly.

Better monitoring of KPIs: As an HR you are responsible for understanding and analyzing various metrics such as time to hire, cost per hire, demographics, headcount, source rendering a greater number of good hires, etc

Clear communication: A hiring panel may include many individuals, each for each round of interviews. You must keep them all on the same page so that you can bring cadence to the entire collaboration process.

Support your decisions with evidence: Most importantly, using an HRMS software allows you to use the HR dashboard and analytics to your advantage so that you can support your decisions with evidence and look smart around your boss.

 

HRMS vs HRIS vs HCM

HRMS
HRIS
HCM

HRMS has the same intent and purpose as that of an HRIS. HRMS is a software that combines necessary core HR functions into one integrated suite, allowing users to perform tasks, analyze data trends, and create reports.

It’s built around the Employee Database as its core module. It allows you to automate, manage, and track your applicants and other HR-related tasks. HRMS is also interchangeably called HRMIS, HRM, core HR, and HR software.

Focuses on strategic HR functions. Handles the entire employee lifecycle from attracting applicants to retaining employees while performing all the other functions of an HRMS.

Key benefits of HRMS for different stakeholders

HR department

Automate the portion of workflow which can be automated. This allows you to focus on other tasks that may require more human touch.

Organizations

While all the paperwork is already taken care of, organizations will have more time for candidate and employee engagement thus scaling up at a faster pace.

Employees

Employees can make the most of the Employee Self-service portal to get notified as well as update their profile thus reducing human error. 

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