Human resource management (HRM) is one of the most important parts of an organization that has to be watched over. Without proper HRM, organizations will find difficulties in developing their people and achieving their objectives.
Managing human resources is not just about motivating or disciplining employees, but also developing them and giving their rights. There are also other processes that need to be managed such as recruitment and taxation. Therefore, HRM requires intensive handling.
Managing HR manually is inconvenient and inefficient. This is why a lot of companies have chosen to switch to HRIS to automate their HR processes. To get to know what an HRIS is, please read this entire article.
What is an HRIS?
Before getting to know HRIS, you need to understand what HRM is, since they are connected to each other. HRM is the practice of managing workforce in organizations to help businesses gain competitive advantage. Also known as the HR department, this practice is designed to optimize employee performance in achieving business objectives.
HRIS (Human Resource Information System) or also known as HRMS (Human Resource Management Software) is software that manages various HR processes in a centralized system. It covers payroll, taxation, recruitment, attendance, and performance assessment.
With HRIS, HR managers can track various information about employees such as their personal details, job roles, salary information, expenses, and many more. HR managers can also controls who can access the system, which information can be shared with employees, and which data should be restricted for management’s use only.
HRIS is also one of important modules in an ERP system, so companies can integrate it with several other other modules too. Just like an ERP system, HRIS can be deployed on computers (on-premise) and is also available as a cloud-based SaaS solution.
How HRIS (HRM Software) Benefits Your Business
Nowadays, HRIS or HRM software has become critical for most organizations, regardless of the type and size. Here are the things HRIS can do for your business:
Improves employee data security
Employee data is personal and should only be accessed by those with access rights. HRIS allows HR managers to control who can access information in the system, so that the risk of data theft can be minimized.
Facilitates salary distribution
HRIS makes the payroll process faster and easier. Human errors that often occur during salary calculation can be minimized, because the system calculates salaries according to employee working hours and attendance.
Payslips can be created in just a few minutes and everything is stored in the system, so management and employees can track it easily. Managers can also view monthly payroll reports and see the salary components of each employee (allowances, overtime pay, etc.).
Also read the related article: 5 Effective Ways to Retain Your Best Employees
Monitors employee performance
HRIS enables management to identify fast-developing employees and slow ones. HR managers can set KPIs for each employee and then measure their achievements. This will eventually help management evaluate employee performance more easily.
Saves on HR expenses
HRIS helps alleviate the operational costs of HRD by eliminating the use of papers or other inefficient applications. It also reduces the need for labor to manage HR, since all the processes are handled automatically.
Simplifies the recruitment process
The recruitment process, from interviews to acceptance of new employees can be handled easily using HRIS. Managers can create recruiting pipelines and put candidates in stages based on their status.
Helps optimize the decision making process
HRIS helps management make better decisions. Since all HR-related information can be reviewed through a centralized system, management can easily find out who has contributed enough to the company and who hasn’t. It also helps management take immediate actions to overcome employee skills gaps.
HRIS Main Features & Components
Each HRM system has its own strengths and weaknesses, but there are some key features a complete and sophisticated HRM system should have. Some of them are:
1. Payroll Management
This is probably the most vital feature in a HRM system. Salary distribution in some organizations can be very complex, because each employee has a different amount of wages, benefits, and taxes. The Payroll Management feature make these processes much simpler.
With this feature, employee salaries are calculated automatically based on attendance, working hours, performance, and tax deductions so that the possibility of errors in calculating salaries is very little. Payslips can be generated digitally and stored properly in the system. Salary-related reports can be reviewed in a single screen so that HR managers can easily make sure that nothing is missed.
2. Recruitment Management
With this feature, HR managers can easily arrange each stage in the recruitment process; information verification, interviews, skill evaluation, negotiation, and acceptance. With drag and drop functions, managers can move candidates from one stage to another.
3. Timesheet & Attendance Management
A good HRM system can be integrated with RFID or a biometric presence system, so HR managers no longer need to record the presence of each employee using papers or spreadsheets. Attendance, working hours, and leaves are all recorded in a single repository, so that the salaries will be calculated automatically and accurately. Employees can also submit leave requests right through the system.
4. Assessment Management
HRIS makes the employee evaluation process more practical. Managers can customize evaluation sheets for all employees. Several types of evaluations can be created; self evaluation, rating scale, 360-degree feedback, etc. Each assessment result can be easily reviewed and then measured to determine the progress made by each employee.
5. Financial Management
Various costs incurred and reimbursements requested by employees can be reviewed with this feature. Managers can generate reports regarding the costs incurred by each employee at all times. This will make it easier for management to manage expenses as well.
6. Tax Management
A good HRM system should have a localized Tax Management feature. All financial information and PPh 21 taxes, from NPWP, BPJS Kesehatan, BPJS Ketenagakerjaan, to bank information can be tracked easily through the system.
7. Analytical Reporting
A good HRM system allows HR managers to create various reports related to labor such as salaries, expenses, taxes, attendance, achievements, etc. within a few minutes. Reports can also be generated in multiple formats; line charts, pie charts, tables, and bar charts.
HRIS is a software system that automates various processes within the HR department, from payroll, attendance, recruitment, taxation, to employee performance appraisals. Without this software, errors in calculating salaries and taxes will be difficult to avoid and management will need more time, energy and costs to manage their workforce.
For more detailed information about HRIS or HRM software, feel free to contact us.