Why Do You Need An HRMS?
- Your business will grow faster
- Human Resources management will be as efficient as possible
- It will be easier to maintain compliance with workplace laws
- Your employees will be happier, more engaged, and more likely to stay with your company
When evaluating how an HRMS will improve your business, it’s helpful to separate the benefits into two categories; efficiency and engagement. The efficiency benefits can be quantified. For example, reducing time-to-hire 20% by automating hiring tasks. Decreasing labor costs 30% by reducing overtime and eliminating employee time theft.
The benefits in the engagement category aren’t as easy to put a number on. But intangible benefits are no less important—and they boost revenue just as reliably.
For example, improving employee work/life balance by offering flexible scheduling. Increasing employee productivity with self-service HR.
These HRMS benefits make your company a better place to work. The efficiency and engagement benefits work together to create a culture of competence, mutual respect, and continual improvement.
HRMS vs HRIS vs HCM: Is There a Difference?
- HRMS-Human Resource Management System
- HRIS-Human Resource Information System
- HCM-Human Capital Management
- HRM-Human Resources Management
All are integrated software systems that manage HR functions.
HRIS tends to focus on information instead of processes. You wouldn’t expect an HRIS to include time and attendance or scheduling. You may be missing applicant tracking as well.
HCM is generally designed for enterprise workforces. HCMs often include components that aren’t applicable to small and mid-sized organizations.
HRM puts the focus on Human Resources management to the exclusion of information processing.
HRIS, HCM, and HRM all lack essential components.
An HRMS is the Comprehensive Solution
An HRMS is your total HR solution. It has everything you need to manage your workforce. It includes both the information and management tools found with the other platforms.
An HRMS includes:
- Hiring and applicant tracking
- HR management
- Time and attendance
- Employee scheduling
How to Choose the Right HRMS
Your HRMS has a profound impact on your employees, business processes, and performance. Choose your HRMS carefully. This will ensure that it will improve the employee experience, maximize ROI, and help you execute your business strategy.
A 5-Step Guide to Choosing an HRMS
Following is a step-by-step guide to the selection process. We will discuss the steps in greater detail following this summary.
- Assemble a team
- Create a timeline for selection and implementation
- Assign HRMS researching tasks
- Narrow it down to 3 or 4 systems
- Compare results and make your selection
Assemble a Team
Include a representative and employee from every department or business function. Appoint a project manager. Define objectives and tools/features that will meet the objectives. Rank them in order of importance. Verify your budget.
Create a Timeline
Make your roadmap as detailed as possible. Meet at least twice a month to share feedback and track progress.
Talk to vendors. Perform cost analyses. Review software features. Consult online reviews. Talk to software users—especially similar companies. Watch online demos/webinars. Attend trade shows and in-person demos.
Narrow it down to 3 or 4 systems
Confirm that the cost is within your budget. If the vendors offer free trials, have the entire group use the software for their specific functions during the trial(s).
Compare results and make your selection
If you follow the process outlined, you can choose a system with confidence.
Questions to ask HRMS Vendors
Use this checklist for vendor research:
- What is the fee structure and the total cost of ownership? (Find out if there are hidden fees, recurring expenses, etc.)
- What type of tech support do you offer? (Email, live support, online chat, knowledge base, troubleshooting guide, FAQs, etc.)
- What training and set-up is included?
- How do the compliance tools work?
- What other business software does it integrate with?
- What business size and industry is your HRMS designed for?
- Is your system scalable?
- How can I customize the system?
- What are your security protocols?
Identify the HRMS Tools/Features Your Company Needs
An HRMS handles hundreds of functions. We will discuss the features as organized into core HR areas. Preceding each section is an explanation of the benefits provided by the tools and capabilities listed.
Recruiting, Applicant Tracking, and Hiring
One of our biggest challenges is getting through to potential job candidates when sometimes hundreds of other recruiters are reaching out to them at the same time. The techniques that worked 10 or even 5 years ago just aren’t effective anymore. Candidates know they have choices, so it takes a lot of effort to really stand out. — Harrison Doan, Director of Analytics at Saatva
11 Benefits of HRMS Hiring Tools
- Find more qualified candidates by expanding your recruitment marketing reach
- Provide a mobile-friendly hiring process—a majority of job seekers use a mobile device in their job search
- Save time by automatically posting to multiple job boards
- Improve efficiency and communication by standardizing hiring workflows
- Track and manage thousands of applications from a single database
- Quickly isolate a pool of top candidates with automatic filtering
- Simplify interview scheduling and stop losing candidates because of interview scheduling confusion
- Reduce cost-per-hire by automating manual processes
- Strengthen your employer brand by providing an applicant-centric hiring process
- Simplify hiring compliance with structured interviews and bias-reduction settings
- Measure performance of job boards to identify the most effective hiring channels
83 percent of talent say a negative interview experience can change their mind about a role or company they once liked, while 87 percent of talent say a positive interview experience can change their mind about a role or company they once doubted. (LinkedIn)
13 Applicant Tracking, Recruiting, and Hiring HRMS Features
1. Job requisition templates
2. Job description templates
3. Single sign-on job board posting
4. Pre-screening questionnaires with knockout questions
5. Branded recruitment marketing
6. Job board analytics
7. Application/resume parsing
8. Email triggers
9. In-app candidate texting
10. Structured interview scripts
11. Hiring stage change triggers
12. Standardized scoring
7 Applicant Tracking and Hiring Key Findings
- The most sought-after candidates have found a position within two weeks. Many companies take almost a month to fill an entry-level position and longer for higher-level positions. If it takes your company over three weeks to make an offer, the top candidates have been taken by competitors with a better process.
- 60% of job seekers have quit filling out an employment application due to its length or complexity. (SHRM)
- Organizations that invest in a strong candidate experience improve the quality of their new hires by 70%. (Glassdoor)
- 83% of talent say a negative interview experience can change their mind about a role or company they once liked, while 87% say a positive interview experience can change their mind about a role or company they once doubted. (LinkedIn)
- 80% of job seekers say they would be discouraged to consider other relevant job openings at a company that failed to notify them of their application status. Yet they would be 3.5 times more likely to re-apply to a company if they were notified. (Workplace Trends)
- 85% of the 13,000 job seekers surveyed from North America, EMEA (Europe, the Middle East, and Africa) and APAC (Asia Pacific) regions claim that consistent communication throughout the recruitment process is the top driver of candidate satisfaction. (Allegis Group)
- Google is sunsetting Hire by Google. ApplicantStack is the top-rated G Hire alternative. If you are a Google Hire user, you can try ApplicantStack free for 15 days.
Onboarding is a critical process that affects everything from employee performance to the customer experience. High turnover is one of the stickiest problems in the current employment climate. Firms with effective onboarding processes experience less turnover.
How does effective onboarding help your company?
5 Benefits of HRMS Onboarding
- Effective onboarding increases productivity by helping employees learn how to do their jobs faster.
- Good onboarding creates engagement from the beginning. Engaged employees buy into your mission and values.
- Effective onboarding saves money by lowering turnover. You’re probably aware of how expensive it is to hire a new employee. It costs between 100% and 200% of the employee’s salary to recruit, hire and train. Improving onboarding is a savvy investment.
- Effective onboarding improves your company reputation. Confident employees feel good about your firm. They leave positive reviews on Glassdoor and other review sites. They share their enthusiasm within their circle of influence. Your reputation is critical for customer loyalty as well.
- Companies with exceptional onboarding processes can nearly double their revenue growth compared to those with average onboarding.
The onboarding-revenue connection is due to several factors. Good onboarding decreases a new employee’s time-to-productivity. It helps them be more effective once they start contributing. Improved retention increases the cumulative experience and competence of the workforce. High-performing employees are better mentors to new employees. Therefore, the benefits of good onboarding increase over time.
6 HRMS Onboarding Tools/Features
- Online portal for new hire paperwork
- Federal and state tax forms
- Benefits enrollment and plan information
- Employee handbook
- Payroll setup
- Completion confirmation
- Real-time analytics and reporting
- WOTC application and filing
- Background and reference checks
9 Onboarding Key Findings
U.S. employers don’t excel at onboarding. Check out these numbers:
- 31% of workers have quit a job after less than 6 months
- 53% of employees said they could do their job better with improved training
- Only 32% of employers have a formal onboarding program
- 56% of self-labeled ‘disengaged’ employees said they got poor training or no training at all
- 17.5% of employees said they didn’t understand what was expected of them until they had worked 90 days or more
- The cost of losing an employee can be twice the employee’s salary or more
- Onboarding has the second-highest business impact of all 22 HR practices
- Unhappy and disengaged workers cost the U.S. $483-$605 billion each year
- 44% of CFOs say poor hiring decisions greatly affect morale
The good news? The overall sad state of onboarding presents an opportunity for you. You can create a superior onboarding process with an HRMS. Onboarding can become an important competitive advantage.
When employees go through structured onboarding, they are 58% more likely to remain with the organization after three years.
Employee Timekeeping and Scheduling Tools
Accurately tracking employee time is a foundational process for every business. Payroll depends on it. Project management depends on it. The process used to track time and attendance is integral to the employee experience. A straightforward, uncomplicated, and transparent process helps employees focus on their responsibilities. An inaccurate or confusing method wreaks havoc at all levels.
Let’s discuss the benefits of HRMS employee time tracking and scheduling.
17 Benefits of HRMS Timekeeping and Scheduling
- Avoid payroll errors
- Reduce time spent managing labor
- Increase trust between employees and management
- Eliminate buddy punching
- Prevent missed punches
- Reduce labor expenses
- Improve oversight of mobile and offsite employees
- Speed up time card approvals
- Keep track of PTO requests
- Prevent double booking employees at two locations
- Reduce time spent creating employee schedules
- Track certifications and licenses
- Prevent shift coverage gaps
- Accommodate employee schedule preferences—improve work/life balance
- Comply with predictive scheduling laws
- Ease admin burden on managers with self-service shift trading
- Prevent employee burnout due to excessive overtime
14 HRMS Employee Timekeeping and Scheduling Tools/Features
To enjoy the benefits mentioned previously, consider the following features.
1. Online timesheets
3. Biometric time clock integration
6. Employee self-service
7. ‘Employee aware’ time clock
10. Schedule templates
11. Schedule enforcement
12. Absence management
13. Overtime management
14. Meals/breaks management
5 HRMS Labor Cost Reduction Key Findings
- Schedule enforcement can save a 200-employee company $173,333 per year.
- According to the American Payroll Association, 43% of hourly employees commit wage theft.
- If 40% of your employees steal 10 minutes a day (a conservative estimate), that means you are losing roughly $150 a day (based on a staff of 150 employees).
- U.S. employers pay $304 million last year in back wages due to payroll errors.
- HRMS can save 2,357 hours per year of manager time for a 200-employee workforce.
How Does an HRMS Benefit Employees?
An HRMS shapes the employee experience (EX). It defines the way your people engage with your company.
The employee experience isn’t merely a new name for employee engagement. There are fundamental differences. Engagement programs are designed to help employees invest in your business culture.
EX theory comes at it from the other side—molding the corporate culture to meet the needs of the employees. If you design processes with an employee-centric focus, your team members will naturally engage.
A great EX starts with carefully-designed hiring, onboarding, and training. It requires managers who help their teams succeed. And convenient, transparent, and responsive HR.
Let’s look at how an HRMS benefits employees.
11 Ways an HRMS Helps Employees
1. Employee Onboarding
Nothing results in success like a carefully-executed onboarding experience. With an HRMS, you can create an onboarding process on par with the most innovative businesses.
2. Benefits Enrollment
Offering competitive benefits attracts talent to your company. Making it easy to manage benefits keeps them there.
Employees compare plans, enroll, and sign forms in the portal. Centralized management and e-signature streamline what can be a tedious process.
In all the years I’ve been in HR, I’ve never encountered a person who didn’t want to fully utilize their benefits. They simply didn’t understand how to navigate the complexity or how all the benefits worked. Zach Montroy, SPHR, ‘Navigate the Journey’
3. Time and Attendance
Your HRMS is synced to a time clock. Punching in is smooth and easy. The HRMS timekeeping module accurately tracks hours. Your employees don’t have to fill out paper time cards—which has long been the bane of hourly employment. The clock reminds employees of missed punches so they can fix them before payday.
An HRMS creates payroll integrity. Employees know they will be paid extra when they come in early or stay late. They know that overtime will be correctly calculated. They have confidence that their accruals are tracked accurately. If benefits eligibility depends on full-time status, an HRMS can validate hours requirements. Payroll accountability brings peace of mind to employees.
4. Employee Scheduling
With an HRMS, employees can see their schedule, swap shifts, request time off, and manage FMLA in the portal.
It improves work/life balance by accommodating schedule preferences. It takes the hassle out of shift trading. When a shift opens up, employees who want extra hours can request it. This eliminates the need for a manager to beg unwilling employees.
Part-time employees can better juggle two jobs when their employers use HRMS scheduling. Employees are loyal to employers that support their work/life balance.
HRMS with employee performance dashboards are popping up in many industries. Employees appreciate having access to the big picture.
Real-time feedback is a powerful motivator. It can make tedious jobs more interesting. It can make interesting jobs even more enjoyable.
We all get distracted by processes and forget how our efforts contribute to business goals. Real-time analytics show our progress.
HRMS performance dashboards are objective. They remove the subjectivity inherent in manager evaluations.
Mobile tech tools make life easier. GPS helps us find our way. Notifications help us remember everything. Our phones provide constant web access. We get frustrated when we have to use old-school tools.
HRMS apps give employees 24/7 access and convenience. Easy mobile tools help you engage and retain increasingly tech-dependent employees.
7. Career Paths
78% of employees said they would remain longer with their employer if they saw a career path within the current organization.
Businesses are placing a greater emphasis on career paths. They help you keep your best employees. (You can be sure your competitors are trying to lure them away.) Career paths strengthen your employer brand. An HRMS helps you set up a career paths program. And manage performance reviews as part of that program.
We discussed how an HRMS benefits rank and file employees. Your managers are an important part of your workforce. Let’s discuss HRMS advantages for managers.
Team oversight is a priority. But it can be challenging even when all employees are in the same office. Managers with mobile, offsite, or remote employees have even greater challenges.
An HRMS mobile app allows managers to monitor teams from a smartphone or tablet.
9. Time Card Approvals
An HRMS creates digital time cards. The hours are tallied with each shift. Managers have all time cards in a centralized location. They don’t need to round them up. The system doesn’t make addition mistakes, so managers don’t need to double-check. HRMS prevents missed punches and other time card mistakes.
10. PTO Requests
Confusion surrounding time off is a common problem. Without a formal system, managers are at risk of scheduling employees who are on vacation. Or forgetting someone’s request.
Employees request time off with the HRMS PTO tool. Managers can see all the requested dates together, side by side. It is a great way for managers to outsource their memory.
Managers never have to remember which requests they have approved. It shows the dates the requests were submitted. This puts everyone on a level playing field if you have a first-come-first-served time off policy. It removes any actual or perceived inequity.
The PTO tracker is synced with the scheduling system. Managers are notified if they attempt to schedule an employee who will be on vacation during the dates in question.
11. Schedule Building
Managers create schedules in minutes with templates and drag-and-drop tools. The system finds eligible employees to cover open shifts. View schedules by team, week, or location.
An HRMS reduces manager scheduling time by up to 70%. (Plus it removes 100% of the hassle!)
3 Key Findings About Employee Engagement and Retention
- 91% of employees say the last time they left an employer, it was voluntary. (Gallup, State of the American Workplace)
- The top reasons given by employees for leaving their jobs include lack of career development (22%), lack of support with work-life balance (12%), their manager’s behavior (11%), unsatisfactory compensation and benefits (9%), and poor well-being (9%). (Work Institute)
- 87% of workers expect their company to support them in balancing their life between work and personal commitments. (Glassdoor)
When is an HRMS Required? Answer These 5 Questions
No two organizations are the same. A manufacturing operation has different needs than a chain of retail stores. Here are some issues to consider.
1. How Many Employees Do I Have?
The regulatory burden increases as your workforce grows. All employers are subject to the Fair Labor Standards Act (FLSA). When you hire your 11th employee, you are subject to the Occupational Safety and Health Act (OSHA). At 15+, the Americans with Disabilities Act (ADA) kicks in. When your staff hits 51, the Affordable Care Act (ACA) applies.
An HRMS is the best tool for managing compliance.
2. Are We Growing Quickly?
Though it’s a great problem to have, you’re especially vulnerable to problems when expanding quickly.
An HRMS can help you manage rapid business growth. You will need to ramp up hiring. Quality of talent is critical.
Payroll becomes more complicated. Unmanaged overtime can sink your labor budget. It’s more difficult to prevent time theft. Manual paperwork becomes overwhelming.
A good HRMS will prevent lapses in productivity as you scale up. It will help you create processes that will accommodate your pace of growth indefinitely.
An HRMS will not only prevent problems, it will fuel your growth.
3. Is My HR Team Overwhelmed?
Is your admin staff scrambling to stay on top of everything? Are employees frustrated because HR is slow to respond? You give your other employees the tools they need, don’t shortchange your hard-working Human Resources team.
When HR can automate tedious, repetitive tasks, they can use their time on projects that have a greater impact. For example, better onboarding, formalized career paths, and employee engagement programs.
Take care of your HR team and they will take care of your employees.
4. Do I Lose Too Many Employees?
Do you have a high turnover rate? You need to improve your company culture. A capable HR director can use an HRMS to turn things around.
Haven’t any idea if your turnover rate is high or not? Take that as a sign you need an HRMS to track data and present it in an easy-to-understand format. HR metrics matter. You can’t improve retention unless you figure out what’s going on.
5. Are My Operating Expenses Spiraling Out of Control?
Many operating expenses are fixed. A five-year lease on office space, for instance. Administrative costs, however, are variable. Inefficiency has an outsized impact because labor and benefits take the biggest share of the budget. An HRMS can help you operate leaner than ever before.
Human Resources Management in 2020
In summary, companies that want to maximize their human capital will choose a capable HRMS. Let’s review why an HRMS is your key to success in 2020:
- Your business will grow faster
- Human Resources management will be as efficient as possible
- It will be easier to maintain compliance with workplace laws
- Your employees will happier, more engaged, and more likely to stay with your company
WorkforceHUB from SwipeClock offers all the features discussed in this article. It includes our ApplicantStack applicant tracking system, TimeWorksPlus employee timekeeping, TimeSimplicity employee scheduling, and HUB onboarding and HR management.
By Liz Strikwerda
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