HRMS and Employee Database Software: Which is The Right Choice?

Does Your Company Manage Employee Databases In Excel?

If the answer is yes, then you simply aren’t doing your HR department any favors or justice. Tracking employee information in a simple spreadsheet is functional, to an extent, but doesn’t provide HR professionals with the tools and programs to fully execute their job. To succeed in a modern work environment, companies need to create a dynamic employee database that automatically updates in real time.

What Is Employee Management Software?

Employee management software is a program that helps organizations manage employee information, engagement, and performance, which ultimately drives more value across the company. Providing guidance and managing employees’ efforts is this program’s primary function. Furthermore, it securely stores and manages employees’ personal and work-related details.

Companies can also manage admin activities easily and quickly with employee management software. It’s worth noting that employees are the most vital part of a company as they directly affect the company’s profitability. In that regard, employee management software is a core pillar of successful HR departments. This software also helps improve employee engagement and retention, increase productivity, and bring down costs.

The main benefit of this software is that it minimizes manual processes, thus saving companies money and time. Moreover, employee management software confidentially stores personal and professional details of the employee and company.

This not only benefits the company and its management, but also it’s a boon for the employees. Often, companies struggle to maximize their human resources because their labor force selection methods are inadequate. This makes it a great idea to have an employee management system as an ally in the fight against workplace engagement challenges.

Managers and HR professionals benefit from employee management systems as they reduce overall workloads and pressure. Just a few of the key benefits of these programs include:

Effective workforce planning
Increased productivity
Lower costs
Boosted profitability
Better accuracy and efficiency
Optimized internal process
Improved data security

Difference between Employees information Systems: HRIS vs. HCM vs. HRMS

To understand the difference between the various types of employee information systems, one must first understand the capabilities of each type of software:

Human Capital Management (HCM)

This type of employee info system handles many of the processes and vital functions required for workforce management at the most effective level. It helps to save time and money in the long run by simplifying tasks such as recruiting, tracking, recordkeeping, workflows, and so on.
Human Resource Information System (HRIS)

HRIS systems help businesses meet their core human resources needs while improving manager and employee productivity with automation and synchronized data.
Human Resource Management System (HRMS)

HRMS is a suite of software and apps used to deal with and manage human resources and required processes throughout the entirety of the employee lifecycle.

Basically, all of these systems are quite similar in their core functionality with the main difference being that the HRIS system provides the basic tools with core functions like attendance and payrolls. HRMS improves and expands those functions by providing functionality like reporting and performance management. An HCM contains all HRIS tools and provides even more complex features than HRMS. Additionally, compared to all the employee database software, HCM is the most diversified and comprehensive.

There is a lack of distinction between HRIS, HRMS, and HCM systems for most people as they all fall under the same umbrella term. Companies often see these names as synonyms, making it even more essential that those companies take the time to review its features and benefits before investing in this software. The type of system a company chooses depends on its size, goals, and needs, however, all three software help increase efficiency and productivity.

Beyond Employee Database Software - Basic and Ideal Functionalities of an HRMS

The basic and ideal functions of HRMS systems are keeping track of employee skills, histories, accomplishments, salaries, and abilities. HRMS systems have the ability to take over some processes so that HR employees don’t have to handle the majority of information gathering alone.

With an HRMS, employees can update their personal data and perform other tasks, which keeps information more accurate and reduces the amount of time HR professionals must spend on these tasks.

The following are just some of the ideal functionalities of HRMS:

Management and performance evaluation
Learning management and benefits administration
Employee scheduling and self-service
Recruitment and onboarding
Access, collection, and storage of employee information

Each function performs a separate task within the HRMS that helps the company gather and track information. For example, the recruitment and onboarding functions cover the hiring tasks while the management and performance evaluation handles the employees’ performance and so on.

HRMS software aims to improve the efficiency and productivity of the entire company’s structure. It gives companies the ability to automate manual and repetitive tasks while streamlining processes and ensuring more accurate data. On the other hand, employee database software provides businesses with a one-stop solution to sort through all employee details. These systems are vital to businesses of today and will only continue to get more advanced and helpful as technology progresses.