HR Management Software: What It Is and How to Choose the Best Solution

Posted On March 7, 2024

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Human resources (HR) software systems unify administration, recruitment, payroll, training, employee engagement, performance management, and other essential HR functions. This provides a secure database of employee data and a centralized view of a company. It also helps HR teams effectively manage each stage of the employee life cycle.

The right HR software solution can help optimize processes by automating manual tasks, organizing employee records, and building data-driven reports. Moreover, advanced HR software solutions enable better workforce planning, financial forecasting, and strategic decision-making.


Top 7 HRMS System

  1. OAS36ty India's Best HR Management Software
  2. ADP Workforce Now is the best HR software overall.
  3. SAP SuccessFactors HXM is the best HR software for large enterprises.
  4. Rippling is the best HR software for midsize companies.
  5. BambooHR is the best HR software for small businesses.
  6. Gusto is the best HR software for startups.
  7. Honorable mentions: Workday HCM and Paycor.


Why We Need HR Management Software?

Managing Human Resources gets more complicated, especially when new people join the company and even routine tasks become challenging. If you want to be efficient, maintain compliance with workplace laws, and keep your employees engaged and happy, do not hesitate to introduce HRM Software.

HR management software Tools can help small businesses improve efficiency by automating routine tasks, and important reminders and providing a centralized system for communication and collaboration between employees and managers or teams reducing the risk of miscommunication and improving overall efficiency.


How many Types of HR Management Software

To create a more narrowly tailored experience for different use cases, most HR tools can be divided among a handful of software types.

Human Resources Management Systems (HRMS), Human Resources Information Systems (HRIS), and Human Capital Management (HCM) all refer to a category of HR software that typically involves a suite of products that work together to target individual HR functions like payroll, benefits, and employee onboarding. 

Core HR and HR administration software also fall under the HRMS, HCM, and HRIS umbrella, so if you’re seeing those terms used to describe your prospective HR tool, no need to worry—you’re on the right track.

If your company structure blends HR processes with talent acquisition, you may also benefit from talent management systems to streamline your workflows. These tools include features to help teams focus on recruiting new candidates, managing employee performances, providing learning and development opportunities, and overseeing compensation.

  • HR information management: This type of software, HRIM, is used to record employee-pertinent activities. Anything from performance tracking, attendance to payroll records, and progress.


  • Human capital software: This type of tool combines various HR tools that are used to plan the workforce, visualize data, and assess HR data. This tool is unlike the others because it's more of a mediator than a specialized solution.


  • HR Management tool: This type of tool performs similar functions to the information management software. However, there are more involved features, such as data analysis, forecasting, and much more.


  • Applicant Tracking System: This software is used by large companies quite regularly, especially if they hire throughout the year. Companies that receive many resumes and applications need to manage them somehow, this tool allows them to do this.


  • Payroll software: Enough, payroll software helps organizations track expenses, payouts, schedules, and much more. Not to mention, an employee's pay record can be reviewed at any time.


What are the Advantages of HR Management Software

The advantage of having HR software is in improving the feedback loop, decreasing the likelihood of error, and the organization of employee data. However, HR software also allows the department to use their time more efficiently on more important activities.

With HR software, your company will be able to ensure greater security, as well as access to information at any time from anywhere using cloud-based technologies. HR software helps businesses develop and train employees with real-time feedback on areas that require their attention for improvement.

Any small or medium-sized enterprise with under 249 employees must have HR software. As the business grows, it's important to have HR tools that work for the company, because there are just too many to choose from. HR software can help such enterprises hire the best candidates for their open roles, resulting in a committed and strong workforce.

When choosing to take your business to the next level, having all of the information and data organized together securely is critically important. Having access to this data will let you assess the oldest and latest data, to make efficient decisions when reviewing employees.

Thus, an HR system will always come in handy. Not to mention, HR systems often have AI-driven analysis with automatic reports, which ensures your decisions are data-driven.

Human Resources Management System (HRMS) Features

As with broad functionality, HRMS feature sets can vary widely from provider to provider, and cobbling together multiple products may limit the overall system. HR, IT, finance, and other stakeholders should carefully assess which of these HRMS features are must-haves for the company.


Benefits administration: Helps HR professionals develop plans, configure eligibility rules, and make payments or deposits to benefits providers. Also offers self-service open enrollment and integrates benefit costs with accounting.


Centralized employee records: Provides a single repository where all employee records are stored, updated, and maintained. Allows for better reporting and lowers the costs of compliance and preparing for audits.


Reporting and analytics: Delivers the ability to run operational reports to track HR information, complete compliance reporting, develop key performance indicators (KPIs) to measure HR process performance, and embed HR metrics into financial dashboards for company-wide analysis, planning, and decision-making. Also, look for the ability to create ad-hoc reports.


Rewards: Calculate salaries, hourly wages, variable payments for bonuses, overtime, sales commissions, shift differentials, and merit increases while withholding regulatory and elective deductions, resulting in accurate net payments to employees at regular intervals. Benefits, like matching retirement fund contributions or mobile phone reimbursements, are sometimes included in this feature set.


Talent acquisition: Recruiters can build career pages on the company website and intranet, create job requisitions and descriptions, manage positions, integrate open positions with job boards, manage resumes, track applicants through the recruiting process, extend job offers, perform background checks, administer pre-employment screenings and create job application forms, before handing new hires off to a generalist or the hiring manager to begin onboarding.


Talent management: Enables HR professionals to develop and evaluate employees via performance reviews, goal management, and competency and skills test administration.


Time and attendance: Delivers the ability to process time-off requests and manage time-off balances, employee scheduling, and absence management and enables timecards to be integrated with payroll and projects.


Workforce planning: Provides the ability to plan and budget for workforce costs and measure against actual outlays for both current and future scenarios. May also be used to identify skill gaps, create succession plans, and prioritize recruitment efforts.

So far, we’ve talked about features and functionality. But those who need to persuade leadership that an HRMS is a smart buy need to prepare for a higher-level business ROI discussion.


Human Resources Management System FAQ’s


What are the three types of HR systems?

The three types of HR systems are Human Resource Information Systems (HRIS), Human Capital Management (HCM) software, and Human Resource Management Systems (HRMS).


How do I choose an HR system?

Choosing an HR system depends on the size of your company. Smaller companies can likely get away with less robust systems, while bigger companies will want HR systems with tons of features, such as payroll, benefits administration, and more.


How much does human resource management software cost?

Pricing varies between different solutions. Some companies offer a free plan, but these often come with limitations. Most companies charge you a set monthly fee along with a fee per user—but this pricing often isn’t revealed until you speak with a rep.


Why is HR software so important?

HR software is important because it helps management perform key actions on time while empowering employees to take charge of their accounts.


What is the average cost of HR Software in India?

Cloud-based HRMS software in India can range anywhere between Rs 20/- per employee per month to Rs. 1000/+ per employee per month. The requirements of your organization, your employee count, and what aligns best with your functions matter the most when choosing the best HR Software for your organization. Top HR Software in India like Oas36ty’s HRMS starts from Rs 50/- per employee per month and goes up according to your needs.


How to choose an HRMS?

HRMS software helps HR manage the workforce and automates every HR task. When selecting the best HR software in India, you should take into account several things such as;

  • Pricing
  • Implementation speed
  • Customer Support
  • Proper Training
  • HR & legal compliances
  • Employee Onboarding/Offboarding
  • Timesheet Management
  • Payroll Management
  • Workflow Management
  • Employee Benefits


Why do companies need HR software?

HR software is the need of the hour in today’s timeline. It automates tasks and manages data which in turn saves a lot of time that can be used to complete other productive tasks. With HR software at its disposal, every little employee detail is just a click away from Hrs. Errors are taken care of, compliances and other legal requirements are met, policies are enforced properly, etc.

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