Is HRMS a technology or a database to store data? Is it a tool to make life easier for the HR practitioner or a repository of all employee related information? It is all of these, and much more. It is actually a decision that can change how you do business, and transform the culture within your organization. Most people underestimate the power of HR Management Systems and tend to reduce it to becoming just a small tool for data collation. When you undertake an actual course in human resource management, you are able to assess the true impact of what HRMS can do for your business.

Here is a glimpse of why your business needs one:

1. Ensures that tactical elements are done

A good HRMS makes sure that all your tactical business needs are taken care of, which essentially frees up your time to work on strategic goals. The people and processes related to them, form the biggest chunk of data. Implementing the processes, and tracking them is a crucial but tedious and repetitive. HRMS ensures that your time, as a business owner or even an HR practitioner is not involved in those.

2. Allows for effective workforce optimization

Businesses are always working on how to use the time of their employees effectively. This usually means staffing them in the right way so that their capabilities and expertise are used fully. HRMS helps you understand all of this information in one place – the employee’s expertise areas, current projects, performance background, time availability and so on. This will enable your business to ensure that each individual is working at his or her optimal capacity and contributing to the overall business goals.

3. Empowers employees to take onus

Many HRMS platforms allow the employees to make key changes or additions to their details. They are able to review their own performance and fill out the self-appraisal form. They are also able to share what they believe they want to be trained on given their developmental gaps. So HRMS not only frees up HR’s time, it also empowers employees to take onus of some of the processes that apply to them directly. This is a huge benefit because it creates a culture of accountability and self-sufficiency. Employee self-service is increasingly becoming important especially with the onset of even HR Chatbots. If you have an efficient HRMS in place, it can provide you with a big advantage and make you a forerunner in that trend.

4. Reduced number of errors

There is a high or medium degree of error that can take place when human intervention is involved entirely or in the whole process. The margin of error is reduced when the processes are automated. Several processes which can possibly have errors that can cause a big impact on business such as incorrect pay calculations, proper tracking of leaves taken and so on, are taken care of and that can result in cost savings as well. So HRMS has a huge impact on the business’s bottom line as well.

5. Decreased dependency on a large HR function

The HR function is absolutely essential for an organization. But there are several aspects of the function, which can be managed by fewer resources or people, if an HRMS is in place. Those that you have as HR employees can then be better utilized for more specific business-centric people activities. Those kinds of roles will also be in line with the career aspirations of these employees. Not only HR, the IT team can also be reduced significantly and the staff that is present can do better quality work. Many of the processes like payroll, which a large number of small businesses tend to outsource, can be managed internally. That will result in yet more savings in terms of the cost incurred, by hiring a vendor and managing the relationship.

6. Remotely accessible

You do not need to be in office to access the system. HRMS contains all the data, provides the connections between various people processes and gives you the scope to use analytics very effectively for decision making. The big advantage is that you can access it from anywhere, instead of having to plan a meeting with your entire HR team to get the data. So as a leader, the people related data is on your finger tips and if you apply basic or even advanced analytics principles, you can quicken your decision making process. Your decisions can also be more data-backed. At the click of a button you can work on spreadsheets that can help you identify which resource to mobilize, which department is incurring the highest training cost or which business unit might have a requirement for new skills and hence needs a hiring budget.

The above are some major reasons for businesses to have an HR Management system. It truly adds value to the business by making a difference in the way the organization functions.

More Information:

Essential Skills of Human Resources Management

Why is it Important to Study Human Resource Management?

How to grow your career in Human Resource Management in 2022?

Key Differences Between Human Resource Management and Performance Management

Professional Certificate Programme In HR Management And Analytics from IIM KOZHIKODE/UPGRAD