Human Resource Management System (HRMS)

What Is an HRMS System?

HRMS stands for human resource management system. You may also encounter the term "HRMS software," which is synonymous.

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 will 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 HRMS.

4 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 increases efficiency while reducing human errors.
• Better Communication: With employee self-service features, automated task reminders, and data-driven insights, an HRMS streamlines and improves internal communications.
• 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 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.

What Is Human Resources Management?

Human resources management (HRM) is a process that includes hiring, training, payroll, workplace policies, and employee retention. Human resource managers "plan, coordinate, and direct the administrative functions of an organization," per the U.S. 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 HRM strategy.

HR Software vs. HRIS vs. HRMS: Are They All the Same?

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.