Everything You Need to Know About Human Resources Management Systems

Modern HR teams have a lot on their plate: benefits administration, time tracking, leave management, learning and development, compliance — the list goes on and on. It’s challenging to take a strategic, proactive approach to HR when most of your time is spent on managing day-to-day operations and administrative tasks. With so much to do, something has to give.

Enter the human resource management system. This all-in-one solution aims to simplify human resources by automating tasks and putting your data to work for you. With the help of an HRMS, any team can boost productivity, improve efficiency, and more importantly, find the time to put your employees at the heart of everything you do.

To help, we’ve put together a comprehensive guide on all things human resource management systems. From what an HRMS is, to how it differs from other solutions on the market, to how to choose the right HRMS vendor for your needs, here’s everything you need to become an HRMS expert and earn a bit more time back in your day.

What is a human resource management system (HRMS)?

A human resource management system is a suite of software solutions that help streamline and automate HR processes throughout the employee lifecycle. With features like HR, time and attendance, payroll, compliance, analytics, and more, an HRMS centralizes all HR and employee data in one place, helping companies better understand their workforces and make data-driven people decisions.

What is the purpose of an HRMS?

An HRM software’s primary focus is empowering HR teams by managing administrative tasks and streamlining people processes. By automating repetitive tasks, HRMS frees up time for HR professionals to focus on strategic initiatives, like upskilling talent, succession planning, creating a positive work culture, and more.

That said, you can’t discount the software solution’s ability to centralize all of an organization's data together in one place. Using disparate systems can cause siloed data and introduce room for error when data is consolidated and shared across platforms. An all-in-one HRMS solution provides a single, centralized view of an organization's people and allows for information to freely and securely flow across tools. For example, an HRMS can not only track every time an hourly employee clocks in and out, but also send this data directly to payroll to ensure their next paycheck is both timely and accurate. This helps eliminate the possibility for error that’s associated with using paper time cards or transferring data from one system to another.

What are the benefits of an HRMS?

Here are a few of the top benefits of using HRM software:

• Simplifies file management. Having one location for all your people data makes it easier to find, access, and share information across your organization.
• Empowers employee self-service. Employees can access information from anywhere, allowing them to self-serve and significantly cutting down the amount of time your HR team spends replying to employee inquiries.
• Automates manual tasks. Setting up automated workflows can streamline repetitive tasks and free up time for your HR department to focus on strategy.
• Streamlines compliance. HRMS systems have built-in compliance rules and guidance, making it easier for your organization to stay on top of state, federal, and country-specific requirements and deadlines, as well as up to date on any new compliance developments.
• Improved decision-making. With a centralized view of your people data, your business can make better, employee-centric decisions based on real-time data.
• Increased security. Only authorized users can access employee data, so you don’t have to worry about personal information falling into the wrong hands.

Why is an HRMS important?

An HRMS simplifies HR tasks and improves organizational efficiency, but those aren’t the only reasons to find a software solution partner. Here are five more reasons why implementing an human resources management system can help your workplace:

1. Scalability: HRMS systems are designed to grow with your organization. You can always add new tools as your business’ priorities and needs change.
2. Data centralization: An HRMS gives your business one place to track employee information and allows all your systems to speak to one another.
3. Cost savings: HRMS’ are designed to improve organizational efficiency and can save your company big, especially when it comes to reducing labor costs and human errors, optimizing team output, and mitigating compliance. In fact, a recent report from Nucleus Research found that organizations that implement cloud workforce management software achieved an average return on investment of $12.24 for every dollar spent.
4. Time savings: By simplifying and automating HR processes, an HRMS gives HR practitioners back more time in their day to focus on more impactful initiatives.
5. Enhanced employee experience: Last but not least, an HRMS empowers your business to be more strategic about your people and frees up the time and money to focus on building the best possible experience for your employees.

An HRMS is an invaluable tool for any business looking to optimize its HR processes, drive sustainable growth, and build a better workplace for its employees.

What are the functions and uses of an HRMS?

An HRMS typically supports various HR functions, like:

• Core HR
• Payroll
• Benefits administration
• Talent acquisition
• Employee onboarding
• Performance management
• Time management
• Learning and development
• Compliance
• Analytics and reporting

That said, most human resource management systems are highly customizable, so your business can pick and choose which offerings to use. The true power of an HRMS lies in its ability to centralize your people data and help information flow seamlessly across your different tools, so the more HRMS features you use, the more helpful and powerful the platform becomes.

Looking for all of the above functionality and more in a HRMS? The UKG Ready® solution helps small to mid-sized companies simplify routine HR tasks and prioritize your workforce at all stages of the employee lifecycle.

HRIS vs. HRMS vs. HCM: What are the differences?

Human resources information system (HRIS), human capital management (HCM), and HR management system are terms that are often used interchangeably, yet although there are subtle differences between these systems. Here’s a closer look:

HRMS vs. HRIS

An HRIS focuses on basic HR functionalities like housing employee data, processing payroll, administering benefits, and managing employee leave. An HRMS, on the other hand, is an all-in-one solution that offers the same core functionality as an HRIS alongside additional offerings like performance management, professional development, recruiting, onboarding, and more.

HRMS vs. HCM

HRMS software’s main goal is to manage administrative HR tasks and streamline processes, while an HCM aims to empower employers to take a more strategic approach to workforce management. In addition to the features included in an HRMS, HCMs boast additional functionality in areas like talent management, workforce planning, performance management, learning and development, and analytics. While HRMSs focus on helping HR teams with their day-to-day operations, HCMs go a step further to give teams the insights they need to hire new talent and engage and upskill existing employees to help meet their business’ current and future goals.

HRIS vs. HCM

The main goal of an HRIS is to manage and store accurate employee data, while also streamlining administrative HR tasks. An HCM system, on the other hand, is designed to empower businesses to make strategic people decisions and get the most out of their workforce in both the present and future. With features that encompass the entire employee lifecycle, an HCM helps employers understand how to maximize the value of their employees.

Here’s a quick look at these key differences:

Think HCM software might fit your needs better? The UKG Pro® solution offers the robust tools enterprises need for deeper visibility into your workforce. Watch a demo and learn how UKG Pro efficiently manages personnel data, handles robust payroll tasks, boosts scheduling efficiency, and helps attract, nurture, and grow your talent — all in one experience.

How to choose a human resources management system

Looking to start your search for an HRMS solution? Here’s a step-by-step guide to finding the best fit for your business:

1. Round up your key decision maker

The earlier you include all your key decision makers in the evaluation process, the better. This will help you earn their buy-in from day-one and ensure you all are on the same page when it comes time to making a final decision.

2. Determine your business needs and budget

Next, you’ll need to define what you’re looking for in a new HR management system. With your key stakeholders, make a list of your high, medium, and low priority features. This ensures you can kick off your search with a well-defined understanding of your team’s, department’s, and business’s wants and needs.

3. Create a vendor shortlist and schedule demos

Using your newly minted criteria, you can kick off the research phase of your search and start building a list of top contenders who meet all or some of your must-haves. Tap into your network to ask for recommendations or simply take to Google to start your research. Once you’ve identified three to four promising vendors, it’s time to schedule product demos.

4. Compare vendors

Next, it’s time to attend your HRMS demos. Try to find a time that works for the majority of your stakeholders, so ​​they all have an opportunity to ask their questions and see how the product works first-hand.

At this stage you’ll also want to ask about:

• Integrations: Does this solution integrate with the other tools in our HR technology stack?
• Customization: Is your solution flexible enough to accommodate our unique business needs?
• Scalability: Can this solution scale to support our business and its changing needs in the coming years?
• Support: What support channels do you offer and what are your support hours?
• Implementation: What does implementation entail and how long should we expect it to take?

Make your final decision

Find a clear frontrunner? Now it’s time to negotiate pricing and contract terms and have all your key stakeholders sign off on the decision. Once the paperwork is all squared away, it’s time to kick off the implementation process and start thinking about how you’ll train employees on your new human resources management platform.

Start your HRMS journey with UKG

With the right HRMS, your business can do more than streamline HR — it can put people at the center of everything you do. By simplifying routine HR tasks, your team can free up more time to focus on building the best experience possible for your employees.

Ready to build a people-centric workplace with UKG? Take a product tour of UKG Ready, our all-in-one HRMS solution, designed to help leaner teams focus on growth. Your business can manage talent, payroll, time, and so much more from a single platform, improving your team’s overall efficiency and, of course, giving you more time to focus on what matters most: your people.