What is a human resources management system?
A human resources management system (HRMS) is a type of HR software that helps businesses to manage and automate their HR processes. These include payroll, benefits administration, time and attendance tracking and employee data storage. Businesses also use HR management systems to support their talent management, including recruiting, onboarding, performance management, goal planning, learning and training. Traditionally, businesses have used spreadsheets and paper-based solutions for most of these processes.
The difference between an HRMS and an HRIS
The terms human resources management system (HRMS) and human resources information system (HRIS) are often used interchangeably. The two types of systems have very similar functions, but the main difference is the complexity of the tools they provide. In general, HRIS are more basic, while HRMS are slightly more complex. The term HRIS tends to be associated with the data management of various HR process, for example, benefits, workforce management, payroll and core HR. Whereas, an HRMS generally offers a more complete suite of software for managing internal HR functions. This can include everything from employee data management, payroll and benefits management to training, employee engagement and employee attendance. However, it’s important to note that, in some cases, there may be no difference between systems branded as HRMS or HRIS.
What are the benefits of an HRMS?
Save time and resources
Your time and resources are precious. One of the main benefits of using an HRMS is it automates many repetitive, manual processes, which means you’ll have more time to focus on more interesting and valuable activities. Some of the tasks that many HRMS automate include reconciling employees’ payroll, copying and entering information in a spreadsheet, and approving and scheduling your employees’ time-off requests. Manual systems are prone to error, so an HRMS can also improve the accuracy of your records.
Better recruitment
Recruitment is a costly and time-consuming process for small and medium-sized businesses. An HRMS can improve the recruitment process by helping you to filter applications and resumes, so you can choose qualified candidates. Some HR systems also leverage social media networking and help you to track and manage candidates and post job ads on multiple job boards. Making your recruitment process more efficient can help you to hire the best qualified talent.
Smoother onboarding
When you onboard new employees, you need to perform certain tasks: collect important documents from the employees, educate the new hires about workplace policies and expected performance standards, among others. An HRMS can streamline this process. Employees can simply upload their documents and inform themselves about your business’ workplace policies and guidelines at their own pace. All you have to do is check that your employees have completed the tasks. This can be especially useful if you work with a remote team.
Improved employee experience
As a small business owner, your employees are your greatest asset, so keeping them happy is crucial. An HRMS can improve the employee experience in many ways. For example, it makes it easier for employees to find information relating to their employment, such as payroll and their leave balance, or request leave. Also, when you or your HR team spend less time on HR admin tasks, you can spend more time finding ways to engage your teams and improve the employee experience.
HR advice and guidance
All organisations, regardless of their size, must manage a variety of HR-related issues—recruitment, performance reviews, time and attendance tracking and payroll, to name a few. Large companies are able to create their own systems and procedures to deal with these, however, as a small business owner, you may simply not have the time or resources to do that. A major benefit of using an HRMS is that many have built-in systems, procedures and prompts, which ensure that your business is compliant with current employment law.
Key considerations when choosing an HRMS
- Features: Some HRMS offer a comprehensive range of features, and others have more focused offerings. Consider the needs of your business and which HR processes need to be automated most urgently, so that you don’t end up paying for features that you don’t need.
- Cloud-based software: Most HRMS use cloud technology, which means that anyone can access the software from any device with an internet connection. Another option is on-premises software, which must be installed on computers within a network and can only be used on those computers. Cloud-based HR software is much more flexible and, generally, a better option for small businesses.
- Free trial: Setting up an HRMS is a significant outlay for a small business. A free trial gives you time to work out which features are most useful and whether the system meets your HR needs.
- Support: When something goes wrong, it’s good to know you’ll be able to get the help you need without too much hassle. This is especially important for small businesses that don’t have large IT teams. The levels of support vary quite a lot from provider to provider, so it’s a good idea to check out what’s offered.
Top HR management systems
If you want to streamline your internal HR processes, here are six of the top HR management systems that you should consider.
Employment Hero
Key features:
- Completely paperless, including timesheets, contracts and policies.
- It has an emphasis on employee engagement with a databank of pulse checks, as well as reward and recognition, learning and development tools.
- You can post a new job ad to 15 job boards simultaneously without leaving the software.
- A library of compliant contract and policies, tracking and recordkeeping to ensure compliance with Australian legislation.
Cloud-based: Yes
Free trial: Yes
Support: Unlimited phone support is available on the top tier ‘platinum’ plan. Users on lower plans can get support via a portal.
Happy HR
Key features:
- Templates for legally compliant employment contracts and more than 45 HR policies, which are continuously reviewed by a team of in-house employment lawyers.
- Support from a team of degree-qualified HR consultants.
- Recruitment and candidate management in one platform to help you manage the hiring process.
- Integration with a range of third-party apps, such as Xero, QuickBooks, Tanda, Cloud payroll, Reckon, MYOB, Deputy and Key Pay.
Cloud-based: Yes.
Free trial: Yes.
Support: Users can access 15 minutes of phone support per month. Email and Zoom support are also available.
Info-Tech
Key features:
- Biometrics, including fingerprint/face recognition for door access and a mobile attendance app that uses facial recognition and GPS location.
- Payroll software that is compliant with Single Touch Payroll for reporting to the ATO.
- Customisable, 360 appraisal templates.
- Time attendance tools, including lateness and overtime reports.
Cloud-based: Yes.
Free trial: A demo is available.
Support: Phone, chat and email options are available.
BambooHR
Key features:
- Intuitive, clear and easy-to-use interfaces.
- Industry solutions for construction, finance, healthcare and technology.
- Comprehensive software that covers, among other areas, employee data and analytics, hiring, onboarding, compensation and workplace culture.
- Offboarding tools that allow you to plan and execute compliant offboarding, while gaining valuable insights from departing employees.
Cloud-based: Yes.
Free trial: Yes.
Support: Email support and a webinar library are available.
Xero
Key features:
- Each subscription level allows you to add an unlimited number of users to your account.
- Integration with over 1,000 third-party apps, including HR management systems HR Partner and HR Central.
- A comprehensive range of accounting tools, including invoice sending, bank reconciliation, bill paying, expense claiming, GST returns and payroll.
- You can connect your bank account to Xero and set up automatic bank feeds.
Cloud-based: Yes.
Free trial: Yes.
Support: No phone support is provided. 24/7 online support is available and Xero calls customers when necessary.
MYOB
Key features:
- The software’s functionality is tailored to different industries.
- It is designed specifically for Australian businesses and supported locally. You can send reports directly to the ATO.
- Automated timesheets and improved payroll efficiency.
- You can customise the onboarding process with configurable workflows.
Cloud-based: Yes.
Free trial: Yes.
Support: Phone support, live chat and a community forum are available.
