What are HR Systems?

It doesn’t have to be difficult to scale your HR system to meet your changing business needs. Discover everything you need to know about HR systems, and how to find the one that best suits your business needs.

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What is an HR System?

An HR System, also called HRMS (Human Resources Management System) or HRIS (Human Resources Information System), is a type of business information system or technology that helps manage, organise and report on all HR processes and data.

An HR System, also called HRMS (Human Resources Management System) or HRIS (Human Resources Information System), is a type of HR software that helps manage, organise and report on all HR processes and data.

HR Software is a powerful HRMS system, as it provides a comprehensive suite of tools to manage a wide range of HR processes. Get started now.

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HR System Product Animation Showing Processes

What should a HR system do?

A human resource management system (HRMS) solution will always cover the basic administrative HR processes usually covered by a human resource information system (HRIS), however these alone will not support business growth or improve efficiency. The best HRMS solution should include features such as:

What are the different types of HR Systems?

There are three acronyms used to describe HR Systems. While some use the acronyms interchangeably, there are important differences between them:

HRIS (Human Resource Information Systems) - allows for the management of HR processes, policies and procedures, though is often admin-heavy.
HCM (Human Capital Management) often a more comprehensive system that includes additional features for tracking employee training, development, and talent management.
HRMS (Human Resource Management Systems) - an HRMS will usually offer all the same features as an HRIS but with additional functionality, such as payroll capabilities. It will sometimes include the features offered by HCM, too.

Learn more about the different types of HR software with Rich Newsome at People HR.

What should I look for in an HR system?

Modern HRMS solutions make HR processes much easier by automating laborious tasks and providing strategic management data at the push of a button. However, all systems are not equal and you should always check that the HR system that you are using or considering is the best value and most powerful option available for your needs.

Any HR system that you use or are planning to use should have these 5 features, as a minimum:

Your HR system should be accessible on the go

You should ideally have a cloud-based HR System which is accessible on the go, whether in a different country, different office, at an airport or train station, or simply when working from home. This is a non-negotiable system feature.

It should be able to handle attendance management

One of our biggest output and productivity killers in the UK is sickness absence. Your absence management system should, as a minimum, enable you to effortlessly record, track, calculate, benchmark and report on sickness absences and holiday absences in your business. It should quickly highlight problem areas so you can take action.

Empower staff through self-service

The most effective HR systems enable employees to securely log in, update and maintain their details. They should also be able to submit absences, holiday requests, and self-appraisal data directly to the system. HR self-service software automates these time-consuming manual processes, which should be an essential feature for modern systems.

Your HR system should be user-friendly

There has been such a rush to market in this space that user-friendliness may have been sacrificed by some providers to get their systems out of the door. If your HR system is not easy to use, you simply won’t get the return on investment you need. There are plenty of intuitive, user-friendly options out there and if yours is not user-friendly, find one that is.

Powerful reporting is a basic requirement

Your system should be taking all the manual effort out of reporting and should have a library of template-based reports (along with the ability to build custom reports) on attendance, performance, joiners, leavers, and turnover, and do graphical representations.

Who uses HRMS Systems?

HR management systems (HRMS) are used by companies of all sizes, across every business sector, including small businesses. All of your employees and even potential candidates, will use the system to complete simple tasks, such as booking staff holidays organising recruitment or submitting their timesheets.

Web and cloud-based HR Systems enable employees to complete HR processes anywhere in the world, on any desktop, mobile or tablet device - giving individuals more flexibility than ever.

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How do businesses benefit from an HR System?

Automate tasks

Saving hours of valuable time, HR Systems build intelligent, automatic workflows that take care of repetitive or outdated tasks.

Secure employee records

An Online HR System eliminates paper files completely, where data is held securely in one centralised location.

Employee engagement

HR systems can help to create a culture of engagement by tracking performance and rewarding employees, as well as identifying training opportunities to develop talent.

Payroll software integration

The best HRMS system can easily connect to payroll systems such as Access Payroll, Sage Payroll, Xero and more.

Decision making

An HRMS can provide real-time data and analytics to help managers make informed decisions about staffing, training, and other HR-related decisions.

Remote working

An Online HR System makes it easier for employees to access their records, request time off, and view their benefits information, leading to increased engagement.

How much does an HR System cost?

There are plenty of HR Systems on the market, each with different price points depending on your business size, needs and desire to scale. Our research shows that, as of August 2021, the average cost for an HR system is £7.57 per person per month, or £2,763 a year.

At PeopleHR, you’ll find pricing as low as £3 per person per month to £9 per person per month, though you’ll need to decide whether this option is right for your business. Read our blog on how much HR Systems cost to learn more, before starting conversations with your potential software providers.

Our tips for choosing the best HR System for your business

Choosing an HR System that satisfies the needs of your business isn’t an easy task. You need to consider cost, features, scalability and accessibility, amongst other factors. Before making a decision, book a demo to see the software in full swing. Read reviews or even talk to other users to find out what they love and what they might like to change.

If you’d like to learn what to look out for when doing your research, you can find out how to choose the best HR software by reading our helpful guide by our expert team.