What Is an HRM System and How Does It Benefit Your Business?

Think of your HR team being able to perform complex tasks with the same effort as drafting an email or scheduling a meeting. No more back and forth and dealing with misplaced paperwork and manual calculations on different spreadsheets. This is the promise of a Human Resource Management (HRM) system – a solution transforming HRM from a paper-heavy process to an efficient, data-driven one. But what is an HRM system and how does it drive new opportunities for your business? 

The following blog outlines the features and benefits of implementing an HRM system in terms of driving business growth, which is crucial to competing in Singapore’s highly regulatory-compliant economy. 

Table of Content

• What Is an HRM System?
• Key Components of an HRM System
• Benefits of Implementing an HRM System
• Why You Should Choose an HRM System Within an ERP System?
• Conclusion  

What Is an HRM System?

HRM system, in full Human Resource Management system, is software that supports HR activities in the workplace. Such systems integrate key activities related to HR management including employee record-keeping, recruitment, payroll and appraisal. They save time, eliminate human errors and provide management data that helps companies make informed decisions. 

Given the high complexity of business regulations as well as the changing business environment in Singapore and the increasing mobility of employees in firms, HRM systems are particularly useful. Automating compliance and administrative tasks allows HR professionals to undertake more value-added projects that enhance the achievement of corporate goals.  

Key Components of an HRM System

An integrated HRM system framework comprises basic functions and other features that are aimed at addressing different HR challenges.

Core Functions

• Employee Data Management: As the foundation of any HRM system, this feature provides proper storage and organisation of data on employees, ensuring easy access and accuracy. 
• Recruitment and Onboarding: It saves time in recruitment and onboarding by automating the process of job listing, candidate tracking and onboarding processes like job offers, paperwork and benefits enrolment.

Additional Features

• Time and Attendance: Supervises the working schedules of the employees and handles leave requests with efficiency in payroll preparations. 

• Payroll Processing: Automates payroll calculations to avoid calculation mistakes and delays with the payments. 

• Performance Management: Gives tools for performance appraisals, objectives and plans based on employees’ characteristics. 

• Administration: Readily facilitates the process of disbursement of employee benefits in order and on time. 

• Reporting and Analytics: Provides information about workforce and performance to help decision makers. 

• Communication and Collaboration: Improves collaboration between employees and organisational units, through self-service portals and automated notifications. 

Benefits of Implementing an HRM System 

When implemented, HRM systems provide businesses with the right support tools to improve performance: 

Strategic HRM

• Data-driven decision-making: Up-to-date information ensures that decisions made by HR professionals on issues such as recruitment and talent management are informed, especially in competitively sensitive economies such as Singapore. 

• Improved forecasting: Historical data analysis helps forecast future needs and trends in human resource management, thereby helping businesses plan their human resources. 

• Improved compliance: This reduces legal risks, especially on labour issues by automating tasks and centralising records. 

Talent Acquisition and Onboarding

• Streamlined Recruitment: Automate some recruitment processes, thus saving time and resources to focus on attracting the right talent in the shortest time. 

• Efficient Onboarding: Simplifies onboarding processes to help new employees integrate faster, helping to reduce recruitment time. 

Employee Engagement and Retention

• Enhanced Communication: Automated self-service support portals and notifications enhance the flow of information and positively influence employees’ interaction. 

• Improved Employee Experience: Efficient HR processes can help in improving the overall experience of the employees, which goes a long way in retaining talents. 

Performance Management and Cost Savings

• Objective Performance Evaluation: When performance appraisals are based on data, they are fair and reveal aspects that need enhancement.  

• Reduced Administrative Burden: This eradicates repetitiveness, allowing the human resource personnel to work on other strategic initiatives. 

Read more: Reduce Employee Turnover Rate with Retention Strategies 

Why You Should Choose an HRM System Within an ERP System?

In many firms, the HRM system is integrated into a broader Enterprise Resource Planning (ERP) system rather than operating on its own. ERP systems were designed to cover numerous corporate activities on a single platform, including HRM, project management, accounting and financial management, procurement, contracts and supply chain management. This connection provides firms with a centralised view of their activities, allowing them to make more effective decisions and coordinate procedures across several departments. 

One of the primary advantages of an HRM module integrated with other business processes is that data can be quickly distributed throughout the company. For example, a change in an employee’s status can trigger an update in the financial and project management systems, removing the need for human data entry. Furthermore, data integration improves resource management by connecting human resource operations like recruiting and staff planning to project timelines and budgets. 

Some of the benefits that an HRM system integrated within an ERP system can offer for both SMEs and larger corporates are: 

• Enhanced Data Integration: ERP systems assimilate data on HRM to other business functional areas like project costing, project management, purchase, accounting and production, which provides a top to bottom image of the firm and enhances the organisational decision making. 

• Improved Visibility and Streamlined Workflows: ERP systems also decrease the burden of paperwork and increase the effectiveness of its cross-referencing with other processes within the company. 

• Scalability for Growth: An HRM system within an ERP can grow along with a business, which means that new developments can be added as the company expands. 

Consideration: ERP systems offer significant advantages but can be more costly and complex to implement. Businesses must weigh the benefits against the resources required for successful implementation. 

Read more: What Are the Key Characteristics of ERP Systems? 

Conclusion

An HRM system delivers various benefits, including regulatory compliance, improved HR operations structure, and aligned employee engagement and performance. An ERP solution that incorporates an HRM system is warranted for growing firms due to its effective data integration and improved workflow. As more corporates battle for growth in Singapore’s economic environment, investing in the proper current technology, such as ERP, is critical to long-term success. 

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