When you’re considering a human resources (HR) management system for your business, it’s important to take into account which features and benefits are offered by the system.
HR management is a complex business function that involves many tasks, from benefits management and recruitment to payroll and performance management.
To handle these many responsibilities, companies will implement HR management software to assist their HR teams and ensure a productive workplace.
Whether you’re considering an HR management system for the first time or looking to replace your current solution, let us guide you through the key features to look out for.
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What is an HR Management System?
Human resource management systems are software tools implemented by organisations to support their HR processes.
HR management systems help to streamline recruitment and payroll management, employee benefits, compensation management, employee data, performance management, and timesheets.
Human resource management tools have been known to help increase the quality of service, in addition to improving effectiveness, efficiency, and organisational performance.
Implementing an HRMS will increase efficiency by leveraging technology to help managers create teams that are happier and more productive.
What are the Different Types of HR Management System?
While there are different types of HR software on the market, the most popular ones are known for core functions that focus on staffing, onboarding, compensation, employee development, and workforce management.
Here are the different core functions of HR management systems that you may encounter.
- Compensation
A compensation system applies to administration, benefits management, and payroll software. This is helpful to employees as it is a self-service system with which they can check their health benefits and PTO metrics.
- Skills Development
Many HR management systems are designed to assist with the personal growth, skills development, and job satisfaction of employees, enabling greater performance and talent management.
- Onboarding
HR management systems can help with onboarding and offboarding, providing tools to guide new employees through responsibilities such as I-9 verification, paperwork requirements, social introductions, software login creation, and more.
- Staffing
Most HR software offers staffing functions such as employee lifecycle details, employee scheduling and management, leave management, talent acquisition, and time tracking.
- Workforce Management
Overall workforce management systems combine employee record tools, monitoring systems, human capital management software, and HR management software – together making a complete human resource information system (HRIS).
Must-have HR Management System Features
What are the specific features to look out for when deciding on the ideal HR management system for your organisation?
Whether you require analytics, compliance management, learning and development, recruitment, onboarding, time and attendance, or more, these are just some of the HR management system features and functions that can benefit your business.
General HR management system features
Benefits Administration
Managing employee benefits and factoring them into payroll calculations can be a time drain. An HR Management System allows for easy access to modules that enable the HR department to factor in maternity leave, medical insurance, and other employee benefits such as pension plans, sick leave, and vacation.
Mobile Compatibility
In modern times, being able to access systems while on the go is a necessity – meaning your HRMS service provider should offer cloud or on-premise solutions depending on your preference.
This also means having mobile applications that suit the Android and iOS platforms as they will maximise efficiency – allowing authorised employees to access information from wherever they may be located.
Self-service for employees
This function makes it possible for employees to check on the status of their benefits, input personal data, and also request time off. The advantage that necessitates this feature is that it saves the HR department lots of time as there no longer has to be a higher-up acting as a go-between for staff and information to be accessed.
Self-service for management
Self-service for management speeds up HR processes – allowing managers to carry out tasks such as accessing employee information, approving expense claims, reviewing applications, and entering performance review data.
Analytics features
A good HRMS makes it easy to plan strategically and manage employees by collecting useful workforce data. Access controls, automated data gathering, customisable dashboards, financial forecasting, and real-time reporting are just some of the features that enable this.
Customizable dashboards
Implementing a system that can be customised to fit the unique needs of your organisation’s HR department allows users to personalise how they view and report on data, leading to increased engagement with the HRMS software and clearer insight and analysis.
Real-time reporting
An HR management system should offer real-time reporting to provide an accurate picture of employee data that can lead to timely, performance-driven decision-making from HR staff, managers, and business leaders.
Forecasting capabilities
Being able to forecast how many hours it will take to accomplish a task or the number of staff to be assigned to projects will cut down on overall time and labour costs. Many HR management systems enable users to look through previous project data to offer a performance guide about desired goals and KPIs.
Automatic data collection
HRMS software often integrates with CRM, ERP, and other sources of information beyond its database to produce automated reports on how employee and payroll data impacts the wider organisation.
Access controls
The best HR management software will come with administration functions to help in assigning levels of access to different resources and databases. This enhances data security and prevents classified information from being shared with unauthorised users.
Financial analysis
An ideal HR management system will assist in financial decision-making by gathering and assessing financial data in various degrees and relating it to human capital, payroll, and time tracking within the business.
Compliance features
Features such as automated EEOC compliance, automated healthcare benefits compliance, and automated recruitment compliance can add extra value to HR management software.
Automated EEOC compliance
It is becoming a common practice among businesses for new hires to sign EEO self-identification questionnaires. This serves as a safeguard against discriminatory practices. An HR management system can include questionnaires that are fully compliant and ensure the appropriate use of the information collected.
Automated healthcare benefits compliance
HR management software can allow for data on employee healthcare benefits to be collected and updated whenever there are any changes required to maintain legal compliance.
Automated recruitment compliance
In the modern corporate environment, prejudice can leave a business open to claim. That is why an organisation’s HRMS needs to have features that all communications are solid – especially in areas such as ethnicity, gender, race, religion, sex, status, and even mental and physical disability. Also, the hiring process must avoid discriminatory practices that expose the business to potential claims.
Learning and development features
Some important features to look for in an HR system include certification administration, company policies and objectives, employee engagement capabilities, evaluation data functions, and training directories.
Certification administration
HR software can facilitate course management and compliance, training nominations, and updates to learning materials. Many systems come with a learning management module to make online training and development easier.
Company policies and objectives
Any time that money is spent on employee certifications, development, and training programs is an investment towards achieving the company’s workforce goals. An HRMS must be able to parse developmental strategies and compare these to pre-set company policies and objectives.
Employee engagement capabilities
Employee engagement is higher when there are opportunities for learning and development. Having access to cross-referenced activities such as future aspirations, job needs, personal development archives, and personal records sends a message to staff that their future at the company is important to HR managers.
Training directories
The ideal HRMS comes with learning options that map competency frameworks against activities for personal performance management while connecting learning outcomes to the company’s desired employee skill development map.
Onboarding features
Automated Reminders
Being able to notify employees and managers with scheduled reminders about pending tasks and deadlines is a great convenience. The best HR software makes it possible to configure reminders to be sent to employee phones or email inboxes.
Gamification capabilities
While not necessarily a must-have feature, making your onboarding and performance features interactive helps to create an engaging work environment for staff. Some HR software will come with these features, while others may integrate with interactive online modules.
Paperless functions
Aside from being environmentally friendly, paperless onboarding functions handled by HR software are cost-effective and secure; the same can be said for other HR functions such as benefits applications, job contracts, tax forms, time-off requests, and more.
Probation management functions
In most organisations, new hires undergo a probation period that is dependent on attendance, appropriate conduct, and their performance on the job. Some HR software can provide a goal-setting function during onboarding with which managers can set targets to appraise performance in those initial few months of employment.
Payroll solutions
Most HR systems have built-in payroll solutions, with features like flexible payroll periods, bulk processing and reprocessing, online pay slips, global payroll compliance, pay adjustments, and overtime records.
Flexible payroll periods
Flexible payroll offered by HR software allows contractors and employees alike to have their salaries scheduled for weekly, bi-weekly, or monthly collection. Having different payroll periods can cut costs and downtime and reduce instances of data input errors during the payment process.
Bulk processing and reprocessing
The ideal HR management system allows employee payments to be automated over an extended period, with payment mistakes able to be undone and corrected through advanced features.
Online payslips
Payslip generation and automation functions allow recent and old payslips to be sent to employees via email, viewed online, or downloaded at any time.
Global payroll compliance
Payroll compliance regulations vary from country to country (or state to state in the US), making it confusing for businesses that operate in many locations to adhere to various compliance laws. A good HRMS will have compliance monitoring built into its payroll automation, ensuring the company adheres to regulations in each region.
Overtime functions and pay adjustments
Payroll solutions incorporated into HR systems allow accounting and HR staff to amend or adjust employee pay by factoring in values such as allowances, bonuses or reductions, pension contributions, and record unpaid leave, among others.
Time & attendance features
Absence management
HR management software can track employee attendance and absence from work, allowing managers to have greater oversight and control over which members of the team are on maternity leave, sick leave, holiday, or at work-related events or trips.
Clocking in (and out) to work
Employees and managers alike can keep a record of their hours through time and attendance modules within HR software. This is useful for any company that has employees working in shifts or being paid by the hour, as well as businesses where clients are charged by the hour.
Compliance
There are regulations and legislation that govern labour from country to country and it is important for a business to be compliant of the labour laws of the country they are operating from. Working hours, overtime pay, and such are all governed by related laws. HR systems often have features that automatically alert and notify HR executives whenever any legislative norms are not met.
Cost estimates
Depending on the project, human resources software can rely on historical HR data to provide time and cost estimates, allowing the user to properly forecast future resource requirements and allocation.
Employee scheduling
With HR software systems, managers can create attendance modules alongside managing schedules, with alerts and notifications able to be set up to allow for checking attendance and overtime.
Integrated payroll
Integrated payroll allows the HR department to calculate employee salaries and benefits by integrating attendance and time modules with payroll functions within the HR management system software.
How Valuable are These HR Management System Functions?
The key question for anyone looking to purchase HR software is whether they will achieve an ROI or at least a perceived benefit from the key features of any particular solution.
The overall value of an HR management system will inevitably be tied to the budget allocated for the software, the quality of the implementation, how many features are provided at the base cost, how much time is saved by different features, and the cost of support from an HR software partner.
A system’s value for money often hinges on its features and capabilities, as well as its overall usability and whether the desired functionality can be achieved with minimal effort.
HR software buyers should ensure they are at least paying for all the necessary features, which can require an audit of relevant HR functionality and existing processes prior to procurement.
Finally, it is important to consider whether implementing the HR management software can be left to your HR team, or whether you would benefit from the onboarding and maintenance support offered by an HR software partner.
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