Human Resource Management System (HRMS)
What Is a Human Resources Management System (HRMS)?
HRMS stands for human resource management system—a type of software that helps HR professionals manage tasks. You may also encounter the term "HRMS software," as well as HRIS, which we’ve covered briefly below.
An HRMS helps manage critical employee functions, including:
- Gathering new-hire paperwork
- Managing employee performance
- Running payroll
- Managing time tracking and PTO
- Ensuring HR compliance with local and federal laws
- Surfacing people analytics insights
The specific functionalities of your HRMS depend on which product you choose.
For example, BambooHR® provides an all-in-one experience that brings payroll, benefits administration, hiring, and other core HR functions into a single platform. Instead of manually combing through spreadsheets or toggling between disconnected digital tools, BambooHR allows you to manage everything in a single, cohesive human resource management system.
What Is Human Resources Management?
Human resources management (HRM) is an HR process that includes hiring, training, payroll, workplace policies, and employee retention. Human resource managers “plan, coordinate and direct the administrative functions of an organization,” according to the US Bureau of Labor Statistics.
While an HRMS can help human resource managers achieve their goals more efficiently and accurately, HR software is a tool that drives success—not a replacement for the core human resources management strategy.
HRMS vs. HRIS: What’s the Difference?
HRMS stands for “human resource management system." HRIS stands for "human resources information system." Both are types of HR software. Most SaaS companies and HR professionals use the terms interchangeably. However, there are a few minor differences between the two.
HRIS refers to the old-fashioned naming of IT departments as management information system departments (MIS). It supports core HR processes like payroll, attendance management, and benefits. Core HR processes within human resource systems software are sometimes still called HRIS.
HRMS systems can support both qualitative and quantitative data handling as well as generally dealing with more varied HR tasks like recruitment and employee management.
Often, human resource systems crunch the numbers with AI and machine learning capabilities. Which is a big plus for bigger businesses and departments.
5 Key Benefits of an HRMS
No matter the industry or size of your company, an HRMS is an integral part of running an organized, efficient human resources department — and a modern business overall.
When HR professionals rely on an HRMS to simplify repetitive tasks, they can focus on more important, strategic work. Some of the most important benefits include:
- Automation: An HRMS automates manual processes, which improves efficiencies, while reducing human errors. Automated systems give time back to employees for more important tasks, creating more opportunity for your business.
- Better Communication: An HRMS can help streamline and improve internal communications with employee self-service features, automated task reminders, and data-driven insights.
- Breaking Down Silos: An HRMS allows teams to work more naturally together on one platform. With the right access, businesses can build a comprehensive picture of the HR landscape from a single touchpoint.
- Streamlined Processes: An HRMS brings complex human resources functions into a centralized platform. For example, you can manage the entire employee lifecycle—from applicant tracking to onboarding, payroll, performance reviews, and eventually, offboarding—without having to navigate multiple spreadsheets or tools.
- Improved Employee Satisfaction: An HRMS can help you gather anonymous employee feedback, manage employee performance, and plan for career growth over time—all of which can contribute to employees who feel empowered and happy at work.
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 human resource management system.
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 HRMS systems manage information electronically, you won't need to rely on spreadsheets or paper documents. Instead, employees can access the HRMS at any time, from any location.
The changes are reflected across the platform if you update information within the human resource management system. For example, suppose you need to update the employee handbook. In that case, you can make changes and alert employees within the platform, eliminating the need to distribute physical copies or remove outdated versions.