What Are The Benefits Of HRMS?

Why is it that a company that is willing to spend big bucks on Enterprise Resource Planning software is sometimes reluctant to make a significant investment in a Human Resource Management System? There are usually several reasons:


• HR processes often receive serious attention only when things go wrong. Executives are used to taking a reactive approach rather than a proactive approach for handling needs and requirements in this department.

• Historically, HR has been given only limited access to the “strategy table” where long term business goals are discussed. Many HR professionals lack experience gathering objective data on HR processes, developing a strategy for improvement, and communicating this information to executives in a compelling way.

• Employers are well versed in outside market factors that can influence profitability but unaware of internal compliance issues that greatly increase financial risk.

A business that wouldn’t dream of using outdated technology to track customer orders or inventory may still be using a legacy system for HR. If an employer believes that HR needs only a database to store information on employees, this mindset makes a certain amount of sense. However, the functionality necessary to retain, distribute, analyze, audit, and leverage data to effectively manage a workforce is only available in an actual HRMS. A Human Resources department cannot reach its full potential without this tool.

HRMS Components & Benefits

Payroll, benefits administration, workforce management, and time/attendance are the four basic components Clay Scroggin lists in his excellent article on HRMS. Each one of these plays a role in allowing an employer to track and control costs. More sophisticated workforce management systems that incorporate applicant tracking, employee development, and succession planning features offer much more. They can be used to fully realize the potential of each worker and of the employee base as a whole. These programs may also include ESS and MSS portals that further reduce HR labor while increasing end user satisfaction.

The fact that more processes can be automated using an HRMS is one thing that makes it attractive to executive decision makers. This is an area that HR should focus on when making a business case to acquire an HRMS. Another important characteristic of a well designed system is that it increases compliance. For example, few employers know all the rules for retention of various types of workplace documents. At Emerald Software, compliance is our #1 focus. Our Universal Onboarding application is an example of a module that can be added to any existing HRMS system to decrease the risk of fines, penalties, and litigation.