What is HRMS?

What Are the Common Functions of HRMS Systems? 3

Manpower Planning 4
Recruitment 4
Onboarding 4
Confirmation 5
Employee Information Management 5
Leave Policy and Transaction Management 5
Tracking Time and Attendance 6
Salary Changes and Increment Calculations 6
Payroll Processing and Salary Disbursement 6
Separation Process 6
Communication and Basic Employee Services 7
Employee Engagement 7
Statutory Compliance 7
MIS Reports 8
Training and Development 8
Performance Appraisal and Promotions 8
Succession Planning 9
Human Resource Development 9

How Can an HRMS Software Benefit TCS? 10

Data Management 10
Employee Self Service 11
Easy Reporting 11
Efficiency and Cost Effectiveness 11
Improved Employee Engagement 12
100% Statutory Compliance 12
Adopt Best Processes in the Industry 12

What are the Emerging Trends in HRMS? 12

The Emergence of Relationship Analytics - Organizational Network
Analysis 13
PMS 13
Employee Experience 13
Artificial Intelligence 13

How to find the right HRMS for you 14

Setting up Best Practices in HR and Payroll 14
Cost Implications and Understanding your Requirement 14
Employee Self Service is a must for Employee Satisfaction 15
Eliminating Repetitive Manual Tasks with Automation 15
Uncompromised Customer Support 16
Customization to Suit your Business Needs 16
HRMS System should be able to scale with your Growth 16
Integration with your Existing Systems 17
What is HRMS?
An HRMS (Human Resource Management System) is a type of HR
software that enables the management of several HR functions
through the use of information technology.

An HRMS aims to improve the productivity and efficiency of the

business through the automation of manual and repetitive tasks. This,
in turn, also frees up the HR team’s time. The additional bandwidth can
then be used to address more strategic, business-critical tasks in the
human resource management function.

An HRMS typically covers every element of an HRIS and include the

capabilities of human capital management system. The two popular
characteristics of a typical HRMS are Payroll and Time & Labor
Management (TLM).

"Some of the HRMS vendors have [HRIS + (Payroll + TLM) = HRMS]

whereas few have [HCM + (Payroll + TLM)]"

1 What Are the Common Functions of HRMS Systems?

2 How Can an HRMS Software Benefit TCS?

3 What are the Emerging Trends in HRMS?

4How to find the right HRMS for you

What Are the Common Functions of HRMS

Systems?
Human Resource Management (HRM, or simply HR) is a function in
every organization which is designed to increase employee
performance in aligning with employer's strategic objectives. Primarily
focused on how people are managed within organizations, human
resource management is driven by systems and policies. HR involves
the following sub-functions and an HRMS helps automate and
streamline them:

Manpower Planning
Human Resource planning mainly emphasizes the estimation of
resource required in order to achieve the desired business results. HR
plans can be either short term/immediate or long term/strategic. A
good HRMS can certainly enable the HR team to execute these plans
swiftly and effectively.

Recruitment
Recruiting employees with the right mix of skills and competencies at
the right time is a critical task. It includes filling positions through
initiatives like promotions, internal job posting and employee referrals.

Onboarding
A candidate who has agreed to join an organization would report to
work on a particular day. This day is called the Joining Date. There are
a certain set of activities that are done on the first day of the employee
joining the organization. These activities are called Employee
Onboarding. A complete HRMS software can make the entire process
easier.

Confirmation
After an employee joins, normally, he goes through what is referred to
as a Probation Period of 1-6 months. In this period, the organization
and the employee review each other and decide on whether each of
them would like to continue the association with the other. At the end
of the Probation period, the employee would normally go through a
confirmation process.

Employee Information Management

One of the important activities done by the HR department is
maintaining accurate information about the employees.Some of the
critical pieces of data that need to be maintained include:

● Name, Gender, Date of Birth, Joining Date, Contact Information,

Telephone numbers, email-ids, etc
● Previous employment information
● Information regarding Department, Location, Grade, Reporting
Manager, etc., of the current company
● Payment & Statutory information like PF number, ESI number,
Income Tax PAN, etc.

Apart from the above, HR also maintains information on Passport,

Visa, Nominations, Company Assets, etc. One of the most critical jobs
of the HR department is to ensure that the correct and updated
information of the employees is maintained. A lot of organizational
decisions by the managers and management are taken based on this
data. Many of the Indian states are also maintaining exclusive portals
for managing the details of government employees. (e.g. Punjab,
Haryana, Odisha and Karnataka.)

Leave Policy and Transaction Management

One of the jobs of the HR Department is to formulate or manage the
Leave Policy of the organization. Apart from creating the HR policy, the
HR Department is also responsible for maintaining all transactions that
happen. An HRMS can simplify this Herculean task. It is a statutory
(legal) requirement to give Leave to employees in an organization.

Tracking Time and Attendance

On a daily basis, tracking the amount of time worked by an employee, the
time when he comes in, the time when he exits, etc., is now drawing a lot of
attention of organizations and consequently of HR departments. Apart from
using this information for Payroll processing, organizations would also need
to generate a number of statutory reports based on the Attendance data.

Salary Changes and Increment Calculations

HR Departments are involved in fixing or revising the salary of employees in
consultation with the Business Heads. A typical salary revision is
accompanied by a Salary Revision letter. This information is also passed on
to the Payroll team who will include it in the next payroll. Also, employees can
view the changes in the company's HRMS software.

Payroll Processing and Salary Disbursement

Payroll processing is an extremely critical activity for both the organization
and the employee. It is directly related to one of the core reasons an
individual works for an organization apart from statutory compliance. Payroll
processing also involves the calculation of all statutory dues (employee and
employer contributions) and generating the necessary reports. Besides,
employees need to be informed about the salaries paid to them, tax
deduction calculations, reimbursement balances, etc. An HRMS software will
execute all this automatically. These activities would also fall under the ambit
of Payroll processing.

Separation Process
When an employee submits his/her resignation or simply quits the job, it's
usually called a resignation. The HR Department is responsible for ensuring
that all the work involved in this process happens. The work involved would
be to do an exit interview, ensure that all clearance certificates are issued,
handover is done and complete information is passed on to Payroll. Payroll
team would then do the Full and Final Settlement for the employee and issue
him his final payment. At the end of this process, the Manpower plan would
get updated and the depending on the organization’s needs, a Recruitment
request would get initiated.
Communication and Basic Employee Services
One of the functions of an HR Department is to enable and ensure a regular
channel of communication between the organization and the employees.
Employees need to be made aware of various policies like the Leave Policy,
Attendance Policy, Travel Policy, Dress Code, etc. Then there could be various
rules and regulations which an employee would need to follow in the
organization. All of this will be usually available in the company's HRMS
software. Any changes to these policies or significant events and other
information that would affect the employees would also need to be
communicated. The HR Department needs to ensure that all these happen.

Employee Engagement
HR Departments are steadily undergoing a change from being a very
transaction-oriented function to a more strategic one. One of the keys to the
success of an organization is to have employees whose requirements and
goals are aligned to those of the organization. HR Departments play a vital
role in building this alignment.

Statutory Compliance
Another critical function of the HR Department is to ensure that the
organization is compliant (adheres) with all the relevant laws of the region
(State/Country). They need to ensure that they are aware of these laws and
take up all activities that are needed to ensure that this is fulfilled.
The various activities that are part of statutory compliance are:

● Ensuring that all relevant employee and labor-related licenses

and permissions are obtained
● Onboarding all current and new employees into various
schemes as applicable to the organization
● Calculating various Payroll-related deductions from the
employee salary based on the applicable laws
● Ensuring that timely reports are submitted to the relevant
authorities as per the mandated schedule. Report submission
may be online or through the filing of the hard copy.
● Ensuring that when an employee leaves the organization all
relevant statutory forms and certificates are issued to him

MIS Reports
HR needs to submit multiple reports to the stakeholders. Some of these
reports are presented periodically (weekly, bi-monthly, monthly, etc.) and will
be in a pre-defined format available in their HRMS software. From a
stakeholder perspective, this is a critical activity as they would use this in
their planning and organization reporting processes.

Training and Development

This function focuses on upgrading the knowledge and skills of the
employees. New joinees are trained on the product and processes of the
Organizations. Employees are also trained in various soft skills such as team
building, leadership skills etc. and behavioral skills such as time
management, etiquette etc. The training modules are designed and delivered
based on the gap in the skills required and the set of skills which employees
possess.

Performance Appraisal and Promotions

Performance evaluation is a systematic activity which helps an organization
to determine the extent to which employee is delivering aligned to business
results. HR specialists design and implement the Performance Management
system (PMS) and maintain the records. This function focuses on the
processes of setting up goals for performance as individuals/teams and
designing performance assessment methods.
Succession Planning
Succession Planning is the process where an organization identifies
employees who can move into positions of higher responsibilities and
constantly grooms them so that they are capable of achieving these
positions. HR Departments need to identify such candidates, provide them
with the required inputs, track and monitor their progress.

Human Resource Development

A Human relations program thereby attempts at enhancing employee
motivation and workplace morale through an improved three-way
communications and employee participation in the decision making
processes. Human resources seek to stress on employee aspects of work
instead of technical or economic aspects.

It is easier to talk about doing things than doing them. Many of us

want to exercise more, eat more healthy, be kinder to our loved
ones, etc., but unless we have specific milestones about how to do
this, our intentions do not match our actions. The HR milestones
we lay out offer specific steps along the longer journey to HR
transformation. – Dave Ulrich
 HRMS at TCS
How Can an HRMS Software Benefit TCS?
One of the reasons HR functions today are moving towards automation is
Data Analytics. With AI becoming the crunch word, everything is powered by
having the right information at the right time.

This is not just limited to big organizations but also startups and growing
companies are facing additional challenges which can only be streamlined by
having a proper system in place.

Data Management
HR data is some of the most sensitive data available within an organization.
The earlier approach to storing and managing this data was paper-based,
which called for heavy investment in the space required and the time required
too posed a significant challenge. Following this came the era of
spreadsheets. This method proved to be error-prone and time consuming.
The answer to all the above problems came in the form of HRMS, which is,
first and foremost, paperless and hence eliminates the problem of being
misplaced or incomplete, among others.

An HRMS software also allows for the tracking of real-time data across
various HR functions such as leave, attendance, and payroll, for instance.
This becomes invaluable at a time when employees are increasingly being
viewed as customers and employee engagement has become a key part of
the organizational puzzle.

Employee Self Service

Employee Self Service refers to an information suite that is available to
employees in one central hub. Modern HRMS come bundled with an
employee Self Service portal which gives employees access to all their own
data. Such a comprehensive view of critical data such as that relating to
payroll, leave and attendance not only engenders trust in the organization but
proves practically beneficial to employees on several counts. They can now
view/download their payslips, view leave updates and real-time attendance
data and their tax liabilities for the month or year without the need to
approach HR. The freeing up of the HR team’s time for other strategic tasks
also improves the efficiency of the business’ functioning.

Easy Reporting
An HRMS allows you to generate a number of predefined statutory as well as
MIS reports immediately without set up. On the statutory front, CLRA Report,
Shops and Establishment Act Report, and the like, can be accessed in their
specified formats without any effort whatsoever. Additionally, powerful filters
allow you to generate any reports around the workforce based on a number
of parameters on an on-demand basis, usually on the request of senior
management. Moreover, HR dashboards give you a quick view of critical
information, all on a single screen within the HRMS software.

Efficiency and Cost Effectiveness

Modern cloud HRMS come at highly cost-effective price points. The cost
benefits you stand to reap from their use far outweigh the meager investment
involved in procuring them. For instance, payroll management costs come
down significantly once compliance is in place and the risk of being slapped
with fines and penalties is taken out the picture. Additionally, the duplication
of information is avoided, thus saving time and improving the efficiency of the
department. Leave management becomes streamlined and is now capable of
being handled between employees and their reporting managers, rather than
involving the HR. A similar reality emerges with respect to attendance
management too.

Improved Employee Engagement

An engaged employee is a productive employee. With this in mind, it is easy
to see how features such as employee Self Service, timely and accurate
payroll management, improved leave and attendance management, etc., feed
into the organization’s goals by keeping employees engaged and thus
ensuring a more productive workforce. HR functions that would have
otherwise be chaotic and long-drawn become streamlined and lead to higher
employee engagement and satisfaction levels.

100% Statutory Compliance

Compliance with state and central laws plays a major role in the hygiene
aspect of any company’s functioning. Why, it can even have serious cost
implications if not handled with care, by way of fines and penalties to be paid
out to government agencies. Modern cloud HRMS ensure compliance
through regular updates of statutory changes to the back end of the software,
such that you are not forced to go hunting for the nitty-gritty of legal changes
in a constantly evolving legal landscape such as that present in India.

Adopt Best Processes in the Industry

Best practices ensure that you’re at the top of your game given the limitations
of your functioning. Adopting best practices improves efficiency, increases
productivity, reduces chances of errors, and more. An HRMS is researched
and set up in such a way that it incorporates within it the best practices used
in the space. A few examples of this include checklists, predefined formats
for letters, requests, etc and the like.

What are the Emerging Trends in HRMS?

The HR function is moving towards organizational efficiency and predictive
analytics. Moreover, the function is moving away from tactical to strategic
HR. The relegation of Transactional HR to chatbots and automation is indeed
on. Modern HRMS platforms have many of these features built into them.
Now HR is synonymous with strategic planners in the organization and helps
to deal with common HR dilemmas.
The Emergence of Relationship Analytics - Organizational
Network Analysis
Social networks that exist within a company helps establish employee
connection within the organization. It looks at how internal connections exist
between employees in an organization on various social platforms. This
analysis can, in turn, see how they can coordinate for more effective response
and output. It is essentially a human network inside the company. Even the
HRMS platforms are getting smarter with the increasing application of AI.

PMS
In the recent past, 360-degree feedback was on every HR’s lips. Now, from
360-degree feedback, companies are moving towards a continuous feedback
loop. Developmental inputs are also possible on the go for virtual, distributed
teams.

Employee Experience
Curated, customized experiences for specific career stages from Onboarding
to career development are in vogue today. E-learning too is being pushed as
an experience, and there is a move towards self-learning. E-learning is taking
on brand new forms such as learning molecules which are mainly tiny units of
information offered on the mobile phone for employees, especially those on
the move.

Artificial Intelligence
Today, more and more companies are moving towards AI tools for predicting
the outcomes of their employee-defined objectives like KRA’s etc. Training of
employees on the current technology by using AI to understand the new
technologies and show the benefits to the employees and hence increase
adoption of new technology.

How to find the right HRMS for you

Ok, so now you get the feeling that an HRMS solution is the need of the
moment for you. So now that you have decided, you need to ask the most
pertinent question. How do I find the right HRMS for my organization?

The following pointers should guide you in a systematic approach to find the
right HRMS. Though as a thumb rule if, reducing cost, improving productivity,
and engaging your employees are your primary concerns, then sticking to a
cloud-based solution would be your best bet.

Setting up Best Practices in HR and Payroll

If you are planning on setting up industry standard best practices or want to
revamp your existing HR policies and processes, introducing an HRMS brings
in the same as it comes pre-built with best practices incorporated into the
product. In SMEs, formal policies and procedures are often missing in the HR
and Payroll space. Introducing an HRMS into the organization has the
potential to bring in discipline on these fronts.

Cost Implications and Understanding your Requirement

Cloud HRMS come in various forms. While the core features may seem
similar, the depth of expertise in each area addressed and also the user
experience tends to vary widely. Hence, to choose an HRMS software that’s
ideal for your needs, you first need to have a precise understanding of your
requirements. You need to be very clear on the specific modules and features
you want so that you can have a smooth transition. On the pricing front, cloud
software by their very nature tends to be highly cost-effective compared to
other options such as desktop software available in the market today. Your
ROI from cloud software is not something you’d have to be concerned about
if you’ve chosen one that meets your needs well.

Employee Self Service is a must for Employee Satisfaction

In an ideal world, no employee should have to chase the HR team to access
his/her payroll and HR information. A cloud HRMS renders this possible.
Employee self service is primarily an information suite for the employee that
gives him direct access to his payslips, tax information, leave and attendance
information, and more. What’s more, all this data can be made available in
real-time using an HRMS on the cloud. Such availability of information
improves employee engagement and satisfaction levels as employees are
clear about the hows and whys of their salary to their leave balance and
more.

Eliminating Repetitive Manual Tasks with Automation

What an HRMS does, even in its most skeletal form, is automate several tasks
which would have otherwise had to be performed manually. Leave and
attendance data that had to be checked and re-checked using a muster or
Excel is now captured in real-time and displayed to employees automatically.
An integrated HRMS ensures that payroll inputs flow in seamlessly into the
HR system. These are some of the critical ways in which the use of an HRMS
can boost productivity and save time. In this sense, HRMS are, in fact,
designed for efficiency.
Uncompromised Customer Support
Suppose you are not in town or currently in a different country and your HRMS
system suddenly crashes down. What would you do if you require any
technical support in this situation? In the circumstances, you will need 24X7
support service from your software company to attend and address that
issue.

Therefore, before you buy any HRMS software, it is quite essential for you to
discover their customer support service. You should confirm with them
whether they are available for customer support 24/7. Or will they only take
calls at a specific time during the day? Also, you should ask whether you will
have to wait up after leaving a message for their call back. Answers to these
questions might give you the idea of your HRMS vendor's activeness and
emphasis on their after-sales customer support.

Customization to Suit your Business Needs

Cloud HRMS has to be configured to suit your needs. Be it leave policies and
attendance policies or holiday lists and shift logic, they are flexible enough to
be fully customized on these fronts and more, depending on the solution you
choose.

HRMS System should be able to scale with your Growth

Given a highly scalable and pay-as-you-go model adopted by cloud HRMS,
this is not an area that should concern you. In fact, in our experience, we have
seen that the need for scaling often becomes the very reason to opt for a
cloud HRMS.
Easy updates and upgrades are available on the back end of the product. You
can also easily upgrade plan to go with more functionalities on a need-to
basis.

Integration with your Existing Systems

This is also crucial considering direct integration with payroll inputs like
attendance/ biometric systems. Also, you might have data flowing into other
systems from the HRMS, and today this is available with most cloud-based
HRMS with the help of API’s. Integrations with accounting software,
attendance and performance management tools are possible.