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Key Features of HRMS

If you’re looking to buy a new HRMS, here are the key features you should be looking for...

Phil Strazzulla
HR Tech Expert, Harvard MBA, Software Enthusiast
June 8, 2020
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Key Features of HRMS Software

Having the right HR software for your business can be a game changer.  But more often than not, the choices can be overwhelming--particularly for human resource teams trying to wade through tech-heavy specs and options while also managing employee relations issues, open enrollment, and everything else on your plate!

To help your HR team in their research process, we wanted to lay out the key features of HR management systems (HRMSs). While each HRMS is unique in its own way, there are several key items that human resource teams should pay close attention to. Here’s a look at the role HRMSs can play in your organization and the most popular HRMS features HR teams should look out for.

Why an HRMS?

Before we launch into the world of HRMS features and platforms, let’s back up a step. If you are new to the research process, you may be overwhelmed with acronyms and tech talk. When we talk about HRMS platforms, we are talking about management systems that automate a wide array of daily, monthly, and even annual tasks.

By using a top HRMS, your HR teams can focus on people and contributing to the success of the business, not paperwork. Lastly, if you are buying HR Tech regularly, you will want to subscribe to our weekly newsletter with new tech, buying advice, and ways to save money on your next purchase.

Key HRMS Features for Your Business

As mentioned above, Human Resource Management System platforms bundle a lot of features into one complete HCM suite. The goal is to streamline repetitive tasks, automating them wherever possible. However, not all HRMS platforms are identical, and not all companies have the same business needs. While the following is a summary of the most commonly-needed software features, it is by no means an exhaustive list. Rather, this is a primer to help jump-start your search and to get you thinking about how your company would utilize an HRMS—and what features are most important to you.

Employee Database

At its core, a Human Resource Information System is essentially a database that stores a bunch of employee information: their roles, when they were hired, what they make, their PTO options, etc.  This type of employee database becomes essential when organizations get to a certain scale.  In part, there are compliance reasons to have this information on hand.  It also helps to enable an employee self-service model where people can access their employee records in real-time which cuts down on questions asked to the human resources department.

Performance Management

A key part of your talent management strategy should be regular employee reviews.  This is a key feature of any HRMS system that will facilitate 30, 60, 90 day reviews, 360 degree reviews, annual performance reviews, and goal planning. Look for systems that are mobile optimized and allow you to customize reviews based on the specific talent demographic they are designed for.

Employee Benefits Administration

Managing benefits for all employees is a huge task, and it’s another area where a robust HRMS will earn its keep. Corporate benefits packages can range from basic healthcare to a wide array of 401(k) contributions, stock options, and more. It’s often the most time-consuming part of an HR department’s annual workload, and one where automation can really make a difference to those in charge of making the processes run smoothly. From narrowing the selection of insurance plans to ensuring employees have completed their enrollment paperwork, HRMS platforms are hugely beneficial in reducing the manual time burden on HR teams.

Employee Management: Payroll, Time Tracking, and More

Day-to-day employee management--which includes tracking hours worked, managing time-off requests, and even working with employees who are out for extended leave--is full of repetitive tasks. HRMS options abound for ways to make all of these tasks easier to manage. Available features run the gamut from tracking overall performance, rewarding individual accomplishments, managing improvement plans, and ensuring all necessary credentials and education benchmarks are met. Some companies may want to look for a platform that incorporates employee apps and self-service functions as well.

Analytics and Document Management

Tracking employee performance, departmental staffing needs, growth over time, and even archiving former employees’ information are just a sampling of the common analytics options HR teams are looking for in an HRMS platform. Additionally, most companies are looking for easier, more automated ways to keep track of their industry-specific documentation. Licenses, certifications, and continuing education requirements are all easily tracked with the right HRMS features.

Applicant Tracking and Employee Onboarding

Filling open positions quickly and efficiently—with top level talent—is a major focus for companies, which means senior management is closely monitoring the HR team’s effectiveness at all of the tasks involved in finding, interviewing, and hiring the right candidates.

HRMS features generally include various applicant tracking functionality, from monitoring traffic on job posting sites to managing applications and scheduling interviews. Once the right candidates are identified, HRMS platforms continue to automate onboarding tasks for new hires like offer letters, internal training requirements, benefits packages, and more.

It's worth noting that it may make sense to buy a separate applicant tracking system, especially if your business has large or unique recruiting needs.  It's rare to find a great recruiting software that also acts as an HRIS.  Most will be little more than databases that track applicants and blast your postings to job boards.  More sophisticated workflows (sourcing, ATS re-discovery, talent pools, etc) will come from a point solution in most cases.

Learning Management

Similar to having an applicant tracking system as part of your HRIS, a learning management system may also be an add on module that you can get as part of your HRMS but that may not be as great relative to some of the standalone LMS's out there.

Beyond the Functionality

For companies looking at HRMS options, it’s not just about the function. Form matters, too. An easy-to-navigate platform is always going to have better user acceptance, employee engagement, and overall satisfaction. The best features in the world won’t make an HR team more effective if the system is hard to use. Systems that were designed for non-technical users are ideal because they are often set up to look and feel like a social media platform. The more straightforward, the better.

Likewise, an HRMS’s included support offerings can make a big difference in a company’s final decision-making process. Knowing there is easily-accessible support gives HR teams peace of mind that they can get answers to questions quickly.

And speaking of support, no discussion on HRMS options is complete without talking about security. HRMS platforms centralize a lot of tasks and a lot of data. Hackers are working hard to break into companies’ databases, so you need a solution that will keep your data safe. Consider the overall security measures in any platform that looks like a contender.

HRMS vs HRIS

Incidentally, in your searches, you are likely also coming across the acronym HRIS, which stands for HR information system. Often, these two are used interchangeably; generally-speaking, you will find a lot of overlap in their respective functionalities. On our site, we generally use these two terms as if they are the same thing.  

However, if you want to get technical about it, an HRMS is basically a more robust version of an HRIS and typically also includes functionality like payroll, time and attendance management, salary planning, etc.  However, the modern HRIS systems include all of these to help your team streamline their HR processes.  Given you probably aren't going to go with an outdated system, we team them as the same thing.

Making the Right Decision

The goal in breaking down key HRMS features is not so much to lead you to a final decision so much as it is to give you a better understanding of what these platforms have to offer. Additionally, in understanding the high-level options, you are likely to have new questions as you think about how your organization would implement an HRMS. Now that you know the right questions to ask yourself and your internal stakeholders, you will be in a better position to talk with software representatives to find a platform with the HRMS features you need most.

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Phil Strazzulla

Phil is the founder of SelectSoftware Reviews, a website dedicated to helping HR and Recruiting teams find and buy the right software through in-depth, expert advice. He has bought over $1 million worth of HR and Recruiting tools. Additionally, as of 2022, nearly 3 million HR professionals have relied on his advice to determine which business software they should buy.

Phil studied finance at New York University and started his career working in venture capital before getting his MBA from Harvard Business School. His in-depth understanding of the Saas landscape, especially HR Tech, stems from nearly a decade of researching and working with these tools as a computer programmer, user, and entrepreneur.

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