What is HRMS Software?

HRMS or Human Resource Management System is essentially a human resource software which meticulously combines all the different HR processes and systems to ensure easy management and smooth functioning of data, human resources and different business processes.

The application of HRMS is aimed at enhancing the performance of employees to help accomplish the business goals of the company. So let us check out the importance of HRMS in a company.

HRMS or Human Resource Management System is essentially a human resource software which meticulously combines all the different HR processes and systems to ensure easy management and smooth functioning of data, human resources and different business processes.

Learn More

How Does an HRMS Work?

Most HR management systems are cloud-based and customizable. Because every business is unique, you can typically choose the apps, integrations, and features you want for your HRMS. Once you implement an HRMS, each employee will create a username and password to access the platform. Supervisors can tailor access according to each employee's needs.

Because an HRMS manages information electronically, you won't need to rely on spreadsheets or paper documents. Instead, employees can access the HRMS any time, from any location. If you update information within the HRMS, the changes are reflected across the platform. For example, if you need to update the employee handbook, you can make changes and alert employees within the platform, eliminating the need to distribute physical copies or remove outdated versions.

Speed and cost-effectiveness

Specifically for online stores, although Optimizely Monetize, Adobe Magento and Shopify also manage content similar to a CMS, they are typically not considered a true CMS as much as an ecommerce platform with some added functionality.


Integrating your systems strips away complexity. With aligned systems and shared processes, you can make your procedures more logical and coherent. It will make common business goals stand out and give your business clearer, more defined objectives for success.

Benifits of HRMS

The fundamental payoff of an HRMS is having all your workforce information in a central repository. That lowers compliance risks, provides a rich data set to inform decision-making, helps keep employees engaged and makes HR professionals more productive and their processes more efficient.

Better, deeper insights: Without an HRMS, employees and managers create data in various places, from spreadsheets to expense apps to paper records, making it impossible to gain a comprehensive view of workforce costs. With an HRMS, all data is in a single bucket, with higher integrity. That enables better, faster decision-making. It’s also pivotal to a workforce planning and analytics initiative, where a company assesses its current workforce and compares that reality with future needs as determined by business objectives. Some key benefits here are the ability to identify and address skills gaps before they hurt productivity, codify succession plans and keep a handle on labor costs by analyzing how overtime or double time payments affect financial performance. With an HRMS, HR teams can also spot early indicators of problems. For example, if high-performing employees in one department leave at a higher-than-normal rate, that might signal a toxic manager. An HRMS can connect dots and help identify at-risk employees.

Improved employee engagement: An HRMS is invaluable in developing and retaining talent—something HR leaders are passionate about. Within an HRMS, HR can create training curriculums, personalize learning plans and career paths and set up mentorships.

In fact, Harvard Business Review suggests that skills development is of prime importance to younger employees and specifically suggests a mentoring program focused on sharing expertise. Gen Z and Millennial workers also expect to be asked, on a regular basis, about their experiences. An HRMS can both match senior people in one department or geography with those who can benefit from a mentoring relationship, conducted virtually, and deliver and tabulate employee satisfaction and engagement surveys. All these development activities are then tracked in the HRMS to recognize development milestones. That helps keep employees on track and loyal to the company.

Process efficiency & a culture of self-service: Responding to inquiries or administering large programs, like benefits enrollment or performance reviews, can take up to 40% of an HR professional’s time each week—and in many cases, individuals would be more than happy to do that work themselves. Within an HRMS, HR can set up a knowledge repository so people can find answers to frequently asked questions, and employees and managers can securely access their own records, enabling HR to focus on more value-added services. In addition, HR processes that require multiple levels of approval, like processing timecards, job requisitions and time-off requests, can be major time sucks. An HRMS provides approval workflows for automating these and other processes so approvers are notified when it’s their turn to approve (or reject). That can reduce processing time by more than 50% and improve accuracy.

Lower back-end overhead: From an IT and capital-spending POV, the centralized nature of an HRMS—especially one sold in a fully cloud-based, software-as-a-service model—requires less hardware, data center space and IT and development staff resources for maintenance, support and training. This rationalizes IT expenditures for HR technology, requires fewer help desk staff and generally improves the satisfaction of full-time users of an HRMS, the HR team itself.

Faster recruiting: Attracting top talent and building your company’s reputation as “the place everyone wants to work” is another area HR pros are passionate about. The candidate experience, however, has been largely ignored because it’s difficult to gain insight into the job search process when postings happen outside of the company. An HRMS solves this problem by connecting recruiters and candidates electronically through job boards and mobile applications, making the process more enjoyable and efficient.