A Human Resource Management System, or HRMS, is an invaluable tool for health and human services organizations. HRMS software can help organizations better organize and manage their workforce by providing the automation tools and analytics insights they need to increase visibility, maximize resources, and unify their workforce behind a common mission.
A comprehensive HRMS will include a range of components designed to address the employee experience. These may include any or all of the following elements: a recruiting or applicant tracking system, benefits administration, HR management tools, employee self-service functionality, time and attendance tracking, position control, payroll processing, talent or learning management, and business intelligence or analytics. These components aim to address your organization’s workforce management needs throughout the employee lifecycle, and in many cases offer an end-to-end solution.
However, to reap the full benefits of such a powerful and valuable human resource system, it’s important to first understand the differences between various HRMS software options and what they can offer your organization. From there, you can start to narrow down your options and find the system that best suits your organization’s operational and functional needs.
There are a lot of different acronyms going around, and for the most part, they mean the same thing. HRMS stands for Human Resources Management System, while HRIS stands for Human Resources Information System. Many individuals use these terms interchangeably, along with HCM (Human Capital Management) or, more simply, HR and Payroll system. You can consider all of these terms essentially the same. What’s more important is to look at individual systems and the functionality they offer. System to system, the full capabilities of an HRMS can vary drastically.
One of the fundamental differences between HRMS options is how they’re built. Many of the systems out there are modular, designed to let you pick and choose the pieces you want or need. For example, your organization may already have a timekeeping system in place but want to add a recruiting module and a learning and development module. The benefits of this flexibility are easy to understand, especially for larger organizations that already have certain components of an HRMS in place. However, the tradeoff can be a disjointed or cobbled together experience that provides a poor user experience and limited ability to compile data to draw meaningful insights.
The other type of HRMS is a unified platform. This type of system does not allow for selecting specific components, as the components are all drawn from a single platform. This approach allows for a single source of truth for data and information, which all of the components draw from. Information stored in a single place eliminates redundancies in data entry and can provide a robust source of data for reporting. This can be an invaluable option for health and human services organizations that require detailed data to report back to funders. However, for smaller organizations, a unified solution may be too robust to suit their needs.
Another fundamental difference between different human resource systems is whether it’s a cloud-based system or software installed at your organization. Increasingly, cloud-based HR systems are becoming the standard, as they allow for:
No matter how your HRMS is built and designed, we are well past the days when we had no choice but to rely on paper processes to do our accounting, record employee time, and process payroll. In fact, continuing to rely on these labor-intensive processes today may be costing your organization more than you know. Even those relying on Excel to make their lives easier are still leaning heavily on manual processes.
An HRMS provides a modern approach to HR and workforce management. By automating routine and repetitive tasks, a human resource system frees up time for your team to focus on people rather than paperwork. It allows you to organize and manage large amounts of information seamlessly. And it can break down information silos to provide you with cross-department and cross-program visibility.
The benefits of an HRMS to the human resources department may seem apparent enough. But a truly effective human resource system can have far-reaching benefits that touch every individual at the organization. The benefits your organization can gain from an HRMS depends on the type of software you choose, the functionality it includes, how it works with your organizational operations, and to what extent you leverage the features available to you. Ideally, a human resource system that has been properly implemented and suits all of your organization’s functional needs will enable you to do all of the following:
Data entry is an extremely time-consuming task. And when it’s redundant data entry – entering the same information multiple times into different systems for different purposes – it’s also frustrating data entry. An HRMS, and especially one that is unified, can eliminate these redundancies – which not only saves time, but can greatly reduce the likelihood of errors and conflicting data.
Many HRMSs include employee self-service features, which empower employees to take control of their personal information and handle small tasks without needing to lean on HR. This can include everything from address changes, updating direct deposit information, viewing and making benefits elections, and downloading their W-2 and other important documents. This not only alleviates some of the strain on HR, but also helps improve the employee experience.
Your HRMS is a system that all of your employees will use, making it a great way to unify your workforce. You can leverage your HR system to help communicate important information to your entire organization or subsets like departments or locations. The system can also be a great resource for communicating directly with each individual employee. Acknowledgements such as an employee handbook or new standard operating procedure can be reviewed and signed off on directly in the HRMS.
Communication is never a one-way street, and an HRMS that enables employees to interact with your communications can also be a benefit. For example, allowing employees to react to company news or add their comments can help improve engagement across your workforce, while providing a simple way to measure engagement as well.
Additionally, because an HRMS serves as your employee database, this can be an ideal place to manage performance and development. Your human resource system can be used to track and provide reminders for managers to regularly check in with their direct reports, to provide a record of performance appraisals, employee progress with learning and development initiatives, and short-term or long-term goals.
Your HRMS is also a powerful tool for data storage and management. This resource can be used to contain all employee information as well as data on different programs, departments, job openings, budgets, and more. Compliance concerns, such as credential tracking, can be automated and addressed with reminders ahead of time, freeing up time to focus on strategic aspects of the organization.
By having all of your workforce data and information in one place, you can also get a better look into your organization. Your HRMS will enable you to proactively identify and correct inefficiencies, whether by allocating time, funding, or resources differently. With the right reporting capabilities in place, your organization will also be able to draw up high-level reports or drill down into the details to provide you with exactly the information you need. Reporting capabilities allow you to more easily report back to funders, justify costs, and hire and manage employees more effectively as well.
A self-employed individual or small group of employees may not feel they have much need for a robust HRMS. In fact, a human resource system becomes much more valuable and necessary as a business becomes bigger and operations become more complex. However, organizations of all sizes can benefit from having the right HRMS in place. While some HR management systems cater to small businesses, others are designed for larger enterprises.
Additionally, health and human services organizations tend to have very unique needs that differ from most other industries. Reporting back to funders, justifying costs, and managing programs on a shoestring budget can all present challenges that the right human resource system can help address.
If your organization already has an HRMS in place, you may think you’re all set. However, as your organization grows or its needs in general change, it’s a good idea to continue reassessing how your HRMS fits those needs. If there are specific pain points you’re noticing or experiencing with your HRMS, you may want to evaluate your options. Not all HRMS options are the same, and even the system that was right for you five years ago may no longer suit your needs today.
To determine what type of HRMS is right for your organization will require an honest assessment of how your organization is doing. With a system that will be used by and impact every member of your organization, this can feel like an overwhelming task to accomplish, especially for larger and more complex organizations. Breaking down the steps of the process and establishing a timeline can help make the process manageable so that you can keep your organization on track. If you’re not sure where to begin, our HR & Payroll Buyer’s Guide can provide you with a step-by-step overview to guide you through the process.
For larger organizations, finding the right HRMS is a team effort that begins with a needs assessment. You’ll need to collaborate with other executives to get a full picture of what’s going well, what could be improved, and what major pain points exist. Your Finance Director may paint a very different picture than your COO or Human Resources executives. Finding the right solution will require looking at your organization at different levels and from different departmental perspectives.
Each department may have specific pain points they want a new HRMS to address. Once these needs are identified, they can be prioritized accordingly and provide the framework for evaluating different HRMS options. While each HRMS software you evaluate may offer a dazzling array of features and functionality, the pain points and list of priorities will be what your organization should return to each time to stay focused and on track.
The evaluation process is an important step in selecting your new human resource system as well. This may involve a formal request for proposals or gathering referrals from organizations similar to your own. As you gather information online or attend product demos, the most important thing is to take careful notes. As you and other decision makers at your organization sort through your options and narrow down your choices, having clear notes can help you manage the huge amounts of information you’re gathering.
Ultimately, the best HR system for your organization will depend on your specific organizational needs and makeup. You’ll want to find an HRMS that:
So far, we’ve explored the software itself for your HRMS needs. The features and functionality will always be at the forefront of your needs assessment. However, another important element to consider is the human factor. The HR and Payroll software provider you choose will play an important part in your organization’s ongoing success with the HRMS. This starts with the implementation process and continues with customer support thereafter. Finding a provider that is attentive, responsive, and most importantly, understands your industry is essential for your organization’s success with your new HRMS.
Being able to use your HR system in the way your organization needs and to receive the support and assistance necessary whenever a question arises are essential. Evaluating the HRMS software you want for your organization also means evaluating the company behind the human resource system.
If your organization is thinking about switching to a new human resource system or is considering an HRMS for the first time, DATIS is here to help. We offer a tailored solution that has been intentionally designed for the unique needs of health and human services organizations. With a deep knowledge of organizations providing behavioral health, housing, addiction treatment, and other social good services, our team provides the dedicated support that organizations like yours can rely on to achieve more together. To learn more about our unified HR and Payroll software system, see our solution in action with a tailored product tour.