What Is a Human Resources Management System?

Complete Information About What Is a Human Resources Management System

A human resource management system (HRMS) is a collection of applications or software that a company uses to manage all human resources and related processes such as payroll, hiring, and employee benefits. The HRMS helps the firm to completely understand its workforce to comply with taxes and labor laws. 

Human resource managers and staff are the primary users of the system. Executives can also use the HRMS to generate data about employees and their implications on the business. What is a human resource management system? Read to learn more. 


HRIS stands for human resource information system and is an acronym often used instead of HRMS. The word is from the 1980s when IT departments were called management information systems, and human resource processes started being automated. Therefore, when you see HRIS, it is synonymous with HRMS. 

HCMS stands for human capital management system. An HCMS has all the elements of an HRMS, but they also have talent management and other features like language translation and localization settings. 

Importance of HRMS

Human resource expenditures are some of the most significant expenditures in a business. A system to manage human resource processes is vital to accurately calculate HR costs, which is becoming increasingly challenging with more remote work. 

A human resources management application helps businesses develop, store and analyze human resource data. Its primary importance is to have a comprehensive database of all company human resources. 

The system automatically updates and removes data so HR professionals can easily and quickly access, evaluate, analyze and retrieve data. The human resources management application makes financial data reporting more accurate. It contributes to the efficient operation of the whole business. 

Functions of HRMS

The primary function of an HRMS is to automate HR processes and organize HR data to optimize HR task management. When choosing an HRMS, it helps to think of its functional components. The following are typical functions of an HRMS: 

  • Employee Management
  • Employee Engagement
  • Candidate Management (recruitment and selection)
  • Workforce Optimization
  • Workforce Management
  • Payroll Management
  • Contingent Workforce Management

Features of an HRMS

The features of a Human Resource Management System largely depend on the provider. Every company must determine the features its HRMS must have before getting one. Features to look for in an HRMS include:

  • Benefits administration
  • Centralized employee records
  • Learning management
  • Reporting and analytics
  • Rewards dashboard
  • Talent acquisition and management
  • User interface
  • Time and attendance management
  • Workforce planning

Almost all businesses will use the features above for human resource management. You can add customized features if you consult the system provider. 

What is a Human Resources Management System?

A firm must know the functions which they will use the HRMS for and the features to perform those functions. More importantly, they must know how they will benefit from the HRMS. 

The biggest benefit of an HRMS is better and deeper insights into human resources. HRMS is a single repository of all HR data which allows managers to quickly analyze skills gaps, productivity, HR costs, etc. The result is better decision-making. 

An HRMS will lead to better employee engagement. You can use the system to obtain and retain better talent. You can also use it to increase employee satisfaction and productivity. 

HR process efficiency is an outstanding benefit of an HRMS. It greatly reduces time and enhances the accuracy of HR processes while creating a culture of self-service. 

An HRMS will reduce HR and related overhead costs. The system will hence increase the firm’s profitability. 

Can an HRMS Help Your Business

What is a Human Resources Management System? It is software to automate HR processes. The above article should inspire you to learn more about it. The benefits of using one in your business can be tremendous. 

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