What is an HR System and why is it useful?

hr department

Employees are important assets for every organisation, and they should be managed well. This is why Human Resource Management is an essential process that all organizations must implement. It involves recruiting, deploying, and managing all the employees apart from several other aspects of employee management. In this fast-paced business world that demands quick solutions, efficient systems, and impeccable implementation, handling all these processes manually might not be enough.

This is where advanced HR software technology is revolutionizing the way HR departments operate. It streamlines and simplifies processes, helping companies efficiently manage as well as engage with the employees. This article will tell you the basics of HR Management Software.

human resources guide

What is HR Software?

Today, companies of all sizes use HR software systems to reduce manual work and help managers and employees work more efficiently. From simple applications like payroll systems or more sophisticated technologies like managing onboarding process, administration processes, or employee documentation, etc., every company uses at least one form of HR Software. But they can be broadly categorized into the following types:

Human Resource Information Systems (HRIS): This software manages everything related to data, including entry, management, and data tracking.

Human Resources Management Systems (HRMS): The functions of HRIS and HRMS are interchangeable, but HRMS is also used for data forecasting and analysis.

Human Capital Management (HCM): This is specialized software used for workforce planning and examination. It provides data visualization and reporting features to plan future challenges.

Employee Document Management System (EDMS): This software manages employee files and documents and adds extra security and compliance to the data. It stores all data on the cloud, making it accessible from anywhere.

Application Tracking System (ATS): It automatically helps HR managers search for relevant resumes from many applications, saving their time and effort. It also helps in job postings and candidate tracking.

HR Payroll Software: Payroll software takes care of employee compensation by generating salary cheques, calculating taxes, making deductions and maintaining payment records, etc. Some versions also come with additional features like employee attendance, time, and pay structure.

Why is HR Software useful?

HR Software automates several important yet time-consuming processes, making HR management a lot easier, efficient, and error-free. In addition, there are several benefits that HR management systems provide:

Increase efficiency and productivity

Studies have shown that globally, almost 80 percent of companies are now using HR software to facilitate information gathering and create process efficiency. Companies with feature-loaded HRMS enjoy higher employee retention while freeing HR managers to work on more critical processes.

Streamlines administration work

HR software automates a lot of administration-related processes, thus making them error-free. For example, during the employee onboarding process, all kinds of paperwork like attendance, payroll processing, training programs, etc., can be automated through this software.

People management made efficiently

HR software results in better people management. It can analyze employee performances, fluctuations in their output and the reasons behind it, training program schedules, which employee needs which training/orientation, etc.

Centralising important data

Losing critical data related to the employees can create issues with payroll and compliance. It can also create problems with proper employee assessment, promotions, increment, etc. All the critical data stored in one place makes it easy for the organizations to access it whenever required and keeps it safe as only those with the required permissions can access it.

Results in better communication

Clear, concise, and open communication is vital for every organization, and HR software systems ensure that. Its chat features can enable employees to interact with each other easily. Features like live feeds also allow open discussions, sharing of ideas, working on different projects, strategizing, and more. Important information can be distributed in real-time.

Choosing the right HR Software

With HR Software being such a crucial part of an organization, choosing a software provider that understands your company’s present needs and future goals is important. Before you finalize the HR software, here are a few tips to help you choose the right one:

Identify your goals: Know your current system and identify the shortcomings. Meet with your HR managers and employees to know where your system needs improvement, and then select software that provides the relevant features.

What processes require attention: Every company has various requirements, and you must know which tasks require automation and choose the one that fulfills all your unique needs.

After-sale partnership: Every software requires after-sale support. As your company grows, it will need your software to evolve. So, choose a provider that lends after-sale support and is ready to become a partner with the company’s growth and success.


An efficient HR department is the success mantra that every organization must follow for better results. With evolving workplaces, HR processes need to adopt advanced technological support to keep up with the changing times and serve the needs of the employees more efficiently. And the right HR Software provider can deliver an HRM that can automate necessary tasks, improve manual processes and make the administerial work error-free.