It is an integrated system providing information used by HR management in decision making. It allows a company to keep track of all of its employees and information about them—whatever information the company chooses to store there, such as employee demographics, benefits tracking, and performance information. It is usually created in a database or, more often, in a series of interrelated databases. There are quite a few good reasons to implement a system as under:
- Improved decision-making effectiveness - Having relevant data immediately available makes decision-making easy. Poor decision-making can arise from having inadequate information or a lack of correctly interrelated information.
- Improved Productivity - Manual record keeping is very time consuming because all related records have to be up dated by hand. Using software to record information can free up staff for higher order functions. Additionally, employee inquiries can take up a lot of a human resource department’s (or manager’s) time and HR software can provide a self-service option for employees to obtain relevant information themselves as well as saving staff time in obtaining it for employees. It can also save time and improve effectiveness for every step of the recruitment and selection process as well as for employee evaluation and training. This can lead to substantial productivity gains.
- Measurable ROI - Investment in HR software can lead to substantial cost savings despite the high initial investment required. If you choose software that specifically meets your business’ needs, you will be able to reduce your labor costs as many functions will be completed by the software itself and others will take a lot less time as a result of the software.
- Improved Security - HR software can also improve your business’ security by reducing the amount of paperwork and related security risks. Security has become a problem or at least a consideration for many businesses and reducing the number of ways in which security can be breached is certainly one way to limit the risk.
The average HRMS system in large companies today is most of the times outdated. And enterprise software becomes nearly obsolete in seven years, leading most companies to shop around.