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Your Guide to Choosing the Right Human Resource Management System

Rachel Chung
Your Guide to Choosing the Right Human Resource Management System

No matter your company size is; and what industry you are in, the fact remains the same: you need HR to manage the recruitment, employee engagement, payroll, and other workforce needs of your organization.  

Thanks to the emerging HR technological advancements, the practice of human resource management has changed dramatically. The face of HR has become portal and technology-based, not to replace HR professionals entirely but to make HR work routines easy and more manageable.

Think of the various HR processes and administrative tasks as an example. By automating these, HR employees can narrow their focus on more strategic work. HR technologies also administer HR-related activities from one central location, which allows for more streamlined, not to mention paper-free workflows.

Signs Your Company Needs an HRMS

There is no one-size-fits-all answer to the question of when to invest in a human resource management system. However, there could be obvious signs that your company badly needs HRMS.

Here are three red flags that show it is time to leave the same old, manual processes and start going digital:

1.     Never-ending Paperwork

Human resource professionals manage and control several documents—from employment contracts to payroll data, employee training information, and more.

The thing is, paper-based HR can complicate the process. Maintaining a pile of papers is often time-consuming, and searching for printed documents can take about 10 to 20 minutes a day.

Not only do paper-based processes slow businesses down, but they may also pose data security threats. Confidential financial and personnel records can get lost and stolen, or worse, exposed due to malicious intent. 

2.     Countless Data Errors

Manual HR administration is prone to data errors. Errors in data entry, for example, can create payment issues and even lead to costly consequences.

Improper salary deductions and inaccurate tax withholding are examples of compliance risks, which result in penalties, fines, and other legal issues.  

Also, manual-based HR activities have zero audit trail. It is difficult to track who last touched the document and made the error, not unless signed or recorded in a logbook.

3.     Overworked Staff

An overworked HR team is a bunch of tired and unproductive employees. HR professionals tend to leave the office last, especially during the payroll and reporting period.

It is common in small businesses to have understaffed workers. The culture of overworking has to stop now because working for longer hours means less sleep. And, sleep-deprived employees are more likely to make more mistakes. 

Main Types of HRM Software Solutions

When considering the human resource management system, it is helpful to think which HR solution best suits your company’s needs. Below are three options for HRMS implementation:

1.     Integrated Software

A fully-integrated HRMS offers a wide variety of HR functions in one system. These functions typically include recruitment, CRM and procurement, payroll, time and attendance, leave management, performance management, and more.

This software follows a single implementation that combines several best-of-breed packages to meet specific HR tech needs. If you want to work with a single vendor or reduce the burden of your IT team, an integrated system should be your software choice.

2.     Best-of-Breed Software

Best-of-breed software offers a “best fit” solution for each HR function. It allows organizations to use a recruiting solution from one vendor, a payroll solution from another, and a database management service from yet a third provider.

If you do not want to rely on a single vendor for all your HR needs or you are planning to acquire a solution for just one HR function, the best-of-breed software is the perfect solution for you.

3.     Service Providers

Third-party service providers can handle a range of human resources functions. They can help with recruitment and temporary staffing, payroll and benefits administration, employee rewards management, risk management, compliance, and more.

HR outsourcing companies perform such activities on behalf of a company. The fully outsourced solution is the best approach to consider if your business has few or non-existent HR specialists.

Essential Features to Look for an HRMS

1.     Centralized Database

A human resource management system with a centralized database can bring HR up to speed. It provides single, electronic storage for records and documents, allowing for better reporting and lowering compliance risks.

2.     Employee Self-Service

Choosing an HRMS with an employee self-service reduces administrative overhead for the human resources department. This portal enables users to view their profiles and documents, update personal information, and review their timesheets, among other things.

3.     Talent Acquisition

Talent acquisition is a must-have feature in HR technologies. With such functionality, recruiters can find new talents and manage the application easily. It allows recruitment specialists to post job openings on their company website, create online job applications, administer pre-employment screenings, and more.

4.     Time and Attendance

Managing employee time and attendance has been made easier with HRMS. The tool records employee’s attendance and labor data—online and in real-time. Thanks to this software feature, employees can also request time-offs and check their leave balances digitally.

5.     Reporting and Analytics

An effective human resource management system should have built-in reporting and analytics. These features enable HR leaders to generate reports, run company-wide analysis, identify management shortcomings, and make better decisions.

Final Thoughts

If companies with formal human resource departments still experience day-to-day challenges, what more those with an understaffed HR team or having no HR team? HR management is critical to the success of every organization, hence, the utmost importance.

Either you hire additional HR staff or invest in technologies like a human resource management system. The latter makes the ideal choice as it helps simplify and streamline HR workflows, creates a clutter-free work environment, and eliminates human error, among other benefits.

Rachel Chung
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