In today’s fast-moving and rapidly changing economy, it’s not necessarily businesses with the most resources that outpace their competition but those that make the most of their resources. To get the most out of what they have, companies need to have systems in place that cover every facet of their business.
Now, considering that every company’s most important resource is its people, perhaps the most important system for a business to get right is its HR system. With that in mind, this post delves into what an HR system is, what they do, and the benefits they offer businesses.
What is an HR system?
An HR system is a tool, or collection of tools, that allows a company’s human resources (HR) department to record, store, process, and report on data related to its staff.
HR systems can be non-automated systems, comprised of documents and spreadsheets, or automated systems like dedicated software. Organisations use different systems according to their specific needs, including their size, structure, industry, etc.
HR functions that can typically be conducted through HR systems are:
- Storing employee records
- Maintaining attendance records
- Managing payroll and employee benefits
- Handling holiday requests and tracking annual leave allowances
- Managing the recruitment of new employees
- Onboarding new staff
- Managing staff training needs and tracking professional development
- Monitoring staff satisfaction and levels of engagement
Recognising that their needs as a business have outgrown their HR system is a widespread issue amongst companies of all sizes and in every industry. However, because HR systems are responsible for many core functions within a business, an inadequate HR system is also a common productivity bottleneck for companies.
What are the benefits of an automated HR system?
Depending on its type and the company that utilises it, an automated HR system offers a range of benefits. Here are some of their most significant advantages.
- Time-saving: Without a doubt, the biggest advantage of an HR system is the huge amount of time they save organisations: cutting down the completion time of certain tasks from hours to minutes and others from minutes to seconds. Better still, this frees up HR to undertake other duties that are more valuable to the business
- Accuracy: As well as saving time, automating tasks also makes them less prone to human error
- More secure: As they centralise data and are backed up, automated HR systems are less susceptible to loss or damage
- Decision making: HR systems make it easier to not only access information but to process that data as well. This subsequently makes it easier for management to make decisions dependent upon said data
Types of HR system
Now, an important thing to note about the term ‘HR system’ is that it can be used to describe a variety of systems that have different uses. Also, while some HR systems are multi-functional solutions, others are standalone software that streamlines a particular business process. With that in mind, here’s a brief rundown of different HR systems used by companies
Human Resource Information System (HRIS)
An HRIS helps a company collect, organize and manage data related to its employees. As well as record keeping, it’s used to assist HR with a variety of employee management tasks such as recruiting and subsequently tracking applicants, the onboarding of new employees, managing attendance and payroll, and handling annual leave requests.
As well as HRIS, there’s also Human Capital Management (HCM) software or Human Resources Management Systems (HRMS) software. Both of these HR systems offer similar functionality to HRIS software and you’ll tend to find all three terms used interchangeably. However, some HCM software allows for greater emphasis on employee efficiency and satisfaction and feature performance management and employee engagement software as a result.
Attendance management software
Used to track the attendance of your employees, which may include clocking in and out.
Payroll software
Used to manage staff remuneration. Because attendance and compensation are so inextricably linked, payroll is often combined with attendance management software.
Absence management software
Also commonly referred to as a staff holiday planner, this software is used to administer and track your employee’s annual leave, as well as other types of absence including sick days and maternity leave.
Applicant tracking systems (ATS)
Used to help to organise candidates during the recruitment process. This includes posting job openings on multiple sites concurrently, processing and sorting through applications, storing applicant data, and tracking communication with applicants.
Onboarding software
Used to streamline the onboarding process when new employees join your company and ensuring they’re compliant with your industry regulations. This includes collecting essential employee data, educating them with your business processes, and introducing them to your company culture.
Performance management software
Designed to evaluate your staff’s performance and skills, set goals for improvement, and subsequently track the progress of those goals and each employee’s growth.
Employee engagement software
Designed to stimulate employees in an effort to increase motivation, job satisfaction and productivity. Software that encourages and records employee feedback, through surveys, etc., is often categorised as employee engagement software.
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