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Blogs > What is an HR System? – How to Choose the Best HR System for your Organization

What is an HR System? - How to Choose the Best HR System for your Organization

Evan Wong (CEO & Co-Founder)    Sep 2, 2022   18 min read

What is an HR System?

An HR system is a business application that manages the entirety of the employee lifecycle from recruitment and onboarding to employee engagement and performance management.

The modern HR tech stack is characterized by its dependence on point solutions – highly specialized systems designed to handle one specific core function in HR, such as recruitment or payroll. However, an HR system encompasses all those functions and more, making it a convenient and safe place to store and manage employee and company data.  

What do HR Systems do?

The function of an HR system is to help streamline employee processes to increase overall productivity and streamline work management throughout an organization. 

HR systems help HR departments save time by automating simple processes. For example, HR systems can automate distributing holiday allowances, employee absences tracking and new employee training.  

Not only do these systems automate processes, but also help connect HR data and integrate with other business systems. HR systems help centralize employee data in one database from various sources, making it easier for HR staff to manage data entry and retrieval.   

The different types of HR Systems?

There are three main types of HR systems that are most used by HR departments. While each system provides different capabilities, each provides streamlined information in a centralized location, removing the need for clutter and excess paperwork. Here are the three different HR systems and their functionalities:  

HRIS (Human Resource Information System)

Human Resource Information Systems serve as the data management core for multiple HR functions like recruiting and tracking applicants, storing employee data, managing payroll and benefits, maintaining regulatory and legal requirements, etc. An HRIS provides a centralized location for all employee data HR managers require to complete core work functions.  

HRMS (Human Resource Management System)

Human Capital Management describes a suite of cloud-based HR systems that are designed to improve the overall employee experience. HCM entails a wide range of HR functions, from data-based, transactional and strategic work. Additionally, HR managers can leverage HCM to advance talent management and enhance the employee experience.  

HCM (Human Capital Management)

Project workflows have a structured path, like a process workflow, however, there is more room for flexibility. With these workflows, a user can accurately predict the sequence of tasks required to complete a project. These workflows are only suitable for use on one item and may not be achieved on other tasks or projects.

HR Systems Features

HRIS Features HRMS Features HCM Features
Payroll & Tax Compliance Performance Management Talent Management
Attendance Recruiting Administrative functions
Benefits Administration Onboarding Company Data
Self Service Reporting Workforce Management

What are the Functions of HR Systems?

Although each HR system serves a slightly different purpose, these systems cover the same core HR functions with varied levels of focus. The primary functions of HR systems exist to ensure that an organization runs smoothly across all departments.  

  1. Candidate Management – For recruitment purposes, HR systems provide a solution in attracting, communicating with, and managing applicants throughout the hiring cycle. From applying to the job, scheduling the interview and even the onboarding process, candidate management is important for companies looking to enhance the candidate experience. This is helpful for HR professionals and hiring staff raise hiring standards by keeping data more organized.
  2. Employee Engagement – Employees who are more engaged with their company tend to produce higher quality work and have a longer tenure than those who feel disconnected. To increase employee job satisfaction and retention, HR systems can collect information regarding company turnover rates, performance review data and benefits and salary packages to detect patterns and identify areas of improvement.
  3. Employee Management – HR systems provide a centralized portal to support analysis, reporting and compliance processes. Within these portals, employees can store their personal information, where it can be easily accessed and changed at any time to improve HR service delivery.
  4. Workforce Management – HR teams can track employee development, manager evaluations and disciplinary records to ensure that the company is providing a safe and stable working environment for their employees. Within an HR system, the company can also implement rules and policies that
  5. Payroll Management – HR systems automate employees’ pay schedules by storing time and attendance data. Automating the payroll process also allows staff to enter their own leave information – later approved by a supervisor – so that managers can focus on other business needs.

What are cloud-based HR Systems & Their Benefits?

A cloud-based HR system unifies data in a centralized platform, offering more streamlined HR management. There exist cloud-based systems that handle specific functions of HR such as payroll and benefits, but the most efficient choice is a system that can manage all aspects of the HR function.  

As HR departments adopt various point solutions to solve their business needs, HR managers may face compounding challenges as they must use separate systems to help manage their administrative tasks like payroll and employee management. Cloud-based HR solutions however offer many benefits in today’s workplace that streamline HR’s workforce management tasks.  

Data Security

Cloud-based systems provide data security that other systems cannot deliver. One of the functions of an HR department is to protect sensitive data, which contains demographic, financial and personal data of employees and the company. Cloud software is designed for security, with encrypted data only being allowed access when granted through ID.  

Compliance Management

A priority for HR is to ensure that an organization remains compliant. An advantage of using a cloud-based HR system is that automatic software updates enable HR departments to keep up with compliance. Cloud-based solutions, unlike applications hosted web-based HR systems, allow for updates to occur automatically and accurately on a regular basis.  

Reduced Costs

Proprietary HR management software can be expensive, especially after factoring in installation and training costs. Cloud-based systems, on the other hand, offer more value with reduced costs. Even after deployment, the software generates more return on investment by providing better data while allowing more time for strategic tasks.  

Simplified Scalability

Within a cloud-based system, HR managers can quickly and easily scale up or down as the needs of an organization shift. Managers can also expand or reduce their operations as needed, quickly implementing a modern solution while simultaneously maintaining financial flexibility.

Increased Mobility

Cloud-based systems can be accessed by managers and employees anytime and anywhere, making it easy for remote and hybrid employees to access their information, regardless of where they decide to work. Unlike preliminary systems, cloud-based systems can be accessed on a variety of devices, allowing flexibility as well.  

Predictive Analyses

The Artificial Intelligence (AI) that is present in HR systems can assist with employee management by helping to retain employees and solve problems. These systems can analyze data across an organization and use AI to predict which employees are most likely to leave due to job dissatisfaction. HR solutions like these can help identify and address employee grievances before they result in resignation.  

Precise Performance Assessments

Before cloud-based HR systems, employee assessments required a lot of manual work, and data collection was extremely time consuming. The benefit of having an HR cloud solution is that managers can automatically track their employee performance through built-in dashboards and reports that show HR staff how to improve training processes or work environments.  

Fast Deployment

Cloud-based HR systems are more user-friendly than preliminary or legacy HR systems that require expensive, and time-consuming training to implement. With cloud-based HR systems, the software provider helps in setting up and implementing the system right away, allowing HR staff to use the new software automatically.  

Higher Employee Engagement

Keeping employees engaged by using big data and mobile technology is key. These cloud HR solutions can keep employee engagement high by sending surveys to workers in a matter of minutes, making it easier for management to see how the organization can better serve its workforce.  

Reduce Paperwork

In an increasingly digital world, using paperwork is no longer an efficient way to keep track of personal or sensitive information. Now with cloud-based HR software, data can be safely stored in the cloud, where it can be easily stored and retrieved. 

How to Develop a Business Case for HR Systems

Building a strong business case for a major technology purchase is key for positioning HR as a strategic partner to an organization. Executive level leaders look for compelling evidence like ROI and software benefits. Here are some steps on how to present a compelling business case for adopting an HR system: 

  1. Evaluate Business NeedsLooking at overall business needs can be a good place to start when building a business case for implementing a new HR system. There could be areas of the business, other than the HR department, that can benefit from adopting an HR system.
  2. Determine Benefits – Focusing on palpable benefits of the new platform, rather than the features, can help to strengthen the business case for HR systems. Some benefits of HR systems include enhanced HR reporting, streamlined HR processes, improved employee experience and simplified system administration.
  3. Calculate ROI – One of the most impactful aspects of developing a business case for a new HR system is evaluating the projected costs, savings and ROI. Implementing a new system is a major commitment, as it involves implementation costs, ongoing licensing costs and employee training. Be prepared to defend how introducing a new system is beneficial to the bottom line.

Potential Use Cases for HR Systems

The current legal workflow landscape is evolving for both law firms and in-house legal teams, and we are seeing an increase amongst different organizations adopting legal workflow automation to optimize and improve efficiency. Here are some examples: 

  • Employment Letters – Generate bespoke employee letters and agreements that are error-free and compliant, making approvals easy and minimizing inefficient back-and-forth in the process.
  • Recruitment Process Management – Build fully configurable solutions in a matter of days that can be quickly adjusted to requirements changes in a matter of minutes, as well as allow HR professionals to quickly inject the company’s unique voice to increase adoption rates.
  • Performance Reviews – Create tailored, structured performance reviews across the organization by rolling out a standardized performance management process that allows for consistency and accessibility in the quality of feedback.
  • Employee Onboarding Management – Streamline and digitize the employee onboarding journey by providing an intuitive onboarding journey for new hires and minimizing the time required by the HR team to collect employee information, generate documents and re-key information into multiple systems.
  • Generated Job Description – Allows organizations to construct, manage and store job description information with the use of text analyzers and keyword optimization to help hiring managers during the recruiting process.
  • Self-Service HR Advice & FAQ – Provides a 24/7 self-service tool for standard advice & FAQ that uses complex rules and decision logic without needing to engage the HR team.
  • Reference Collector – Consolidate consistent information all in a specific location to gain maximum visibility of reference status and manage the reassignment of referees.
  • HR Document Templates – Create and modify reusable HR documents that can be customized with dates, name and signatures.

Checkbox as an HR System

The Checkbox platform empowers people & HR teams to build automation tools that can be deployed to employee organization-wide, using drag and drop capabilities to build their applications. Checkbox as an HR system leverages human resource automation to digitize, streamline, automate and measure work across hiring, communications, retention, development and performance management processes. Checkbox is truly an all-in-one HR tool that can be applied to all HR workflows throughout the employee lifecycle and spans across all core HR functions, making Checkbox an essential tool for HR staff.  

Additionally, there exist very few HR systems on the market that offer functionality for contract automation. It is a significant gap even in both younger and older incumbent systems across HRIS, HRMS and HCM. The Checkbox platform, however, allows HR managers to generate and negotiate contracts automatically. While there are many technologies in an organization’s HR tech stack, it is rare that they have the functionality for contract automation.  

While other HR technologies may help HR teams organize and manage their work, Checkbox uniquely shifts the type of work of people & HR departments to enable them to truly do more with less, whilst also creating visible and direct improvements to the delivery of employee services to their organization.  

Here are just a few benefits of using Checkbox to automate your HR workflows:

  • Give time back to people & HR teams – Refocus the HR team on high impact, people-centric tasks by creating automation and self-service journeys for the low complexity tasks.
  • Enhance employee experience – Remove bottlenecks and improve turnaround time for the business by improving accessibility to services through self-service whilst shortening the queue for high importance HR requests.
  • Higher compliance – Improve accuracy and adoption of proper practices and processes.
  • Standardization – Create operational excellence and consistency of service delivery.
  • Data capture – Gain access and report on data which typically is not captured due to manual and ‘offline’ methods of working, particularly in email and phone calls.

Ready to explore your HR system options? Schedule a demo today with one of our technology consultants to see if Checkbox is the right HR automation system for your organization.  

Frequently Asked Questions

The three types of HR systems most used by HR departments are HRIS (Human Resource Information System), HRMS (Human Resource Management System) and HCM (Human Capital Management).  

An HR system is a business application that manages the entirety of the employee lifecycle from recruitment and hiring, to employee offboarding. Managers use HR systems through core HR functions from administrative tasks like payroll and benefits to employee engagement and performance management. 

HR functions worldwide have transformed into multi-faceted, strategic powerhouses critical to organizational success. As HR departments evolve to take on greater strategic responsibility, both within and beyond their core functions, HR systems will help ease the administrative burden that HR teams must face. Easing this burden will allow HR teams to be a stronger, strategic partner to an organization.  

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