Employees' labor is a vital economic resource, which, like other resources, should be managed with maximum efficiency. This means that routine tasks, actions, and processes must be carried out as clearly and promptly as possible.
Simple calculation of quantitative indices is not enough today - keeping records of the personnel performance quality is necessary. HRM systems were developed for this purpose. Their functionality is extended. Their main objective is to identify, attract and retain valuable professionals. MaybeWorks team has assisted in HRM software development, and we want to share our expertise with you.
The concept of human resource management (HRM) software
HRM is a comprehensive automated human resource management system with advanced functionality. It processes a large volume of business processes, calculations, and analytical operations, which concern all aspects of the life of an employee in a company: from payroll to professional growth and career development. The term HRM has synonyms HCM (Human Capital Management) and WFM (WorkForce Management).
HRM systems are created to solve two main tasks:
- Streamline calculations and accounting of operations related to personnel management
- Reduce losses related to personnel movement
In the first case, the effect is obvious. Automating operations and using a single database ensures the correctness of calculations, maintenance of statistics and analytics, and efficiency of actions. The result of the second task is more challenging to assess, but it is undoubtedly significant. Human capital management systems allow HR to build a personnel strategy based on the accurate and comprehensive analysis of the performance of each employee to make effective decisions, plan shifts, train, form a system of motivation, etc. All this will allow not only to retain the best specialists but also to create conditions for their further growth and even the more effective performance of labor duties.
According to the American Management Association, in the U.S., the cost of replacing an employee who leaves the company can range from 30 to 150% of the annual salary. This depends on the level of qualifications and experience. Thus, employee turnover is a serious problem that drastically reduces a company's efficiency.
Types of HRM software
HRM systems are divided into three levels. They are determined by the degree of process automation:
- Systems of the first level. These HRM solutions are designed for the automatic calculation of wages. This is a standard product with limited functionality, further adjustment is impossible, and the circle of potential users is very narrow.
- Systems of the second level. These HRM solutions are more advanced and allow the automation of personnel accounting. They are provided with fairly good functionality for conducting a competent personnel policy. Software products of this level can be complemented.
- Systems of the third level. These are the most progressive HRM solutions. Besides calculating salary and personnel flow accounting, they allow the development of individual training programs for specialists, make employee portraits, and plan promotion with performance appraisal.
HRM solutions of the third level can be an independent product, but they are often part of a comprehensive enterprise resource planning (ERP).
Another classification of HRM systems is based on the composition of functions. From this position, HRM software products can be divided into 4 groups:
- Settlement. This HRM software provides salary calculation, travel costs, bonuses and deductions, execution of work orders, etc.
- Accounting. This HRM software includes drawing up staffing lists, personnel records, records of vacations, business trips, and sick leaves, and keeping personal records of employees.
- HRM systems with partial functionality. Software products of this group, in addition to accounting and settlement functions, include an HR outline. This includes motivation management, performance analysis of personnel, appraisal, and assessment of the professional suitability of workers, planning personnel changes, and ways to improve the HR management system of the organization.
- Full-featured HRM systems. These are HRM systems with the added function of generating reports for regulatory authorities or management of the holding and keeping statistics.
MaybeWorks development team has augmented the clients' teams for HRM software development of different levels.
Does your business need the HRM system?
Using the HR management software allows you to create a unified information space in the company and significantly improve the efficiency of the HR service. Statistics state that HR managers spend more than half of their time preparing, filling out, and recording documents. The HR management software product completely gets rid of these routine operations.
In practice, the greatest need in HRM system development is experiencing companies with more than 1000 people. This does not mean that smaller companies do not need automation, but the effect of its use will be noticeable later.
There is a generalized portrait of the HRM system user. It is a company that:
- Is engaged in manufacturing, trading, project, or educational activity
- Has a large number of employees
- Has a complicated system of salary formation
- Has geographically distributed offices and subdivisions
- Implements modern management styles
- Requires a wide range of highly qualified personnel
- Combines employees with professional knowledge of the high value
If at least two of these points are relevant to your company, it means that the need to automate HR processes is long overdue.
We also recommend you read our case study on ERP.
What to consider when developing an automated HR management system
The development of an automated HRM system at an enterprise should be preceded by a deep market study, analysis of the functional capabilities of different software products, and their correlation to the company's needs. The answers to the following questions may help in this:
- Is the HRM system really necessary? You should refrain from chasing automation. The development of HRM software must be justified economically. Otherwise, the expenses will turn out to be untargeted.
- Will HR automation solve existing problems? It is important to understand to what extent the HRM software will increase the efficiency of personnel management.
- What is the goal of HRM software development? The goals should sound specific. For example: "Increase the average duration of an employee's work in the company to 5 years". This allows you to specify a vision of the functionality of the HRM software.
- What should HRM software features be on the priority list? You should have a necessary minimum of requirements like complying with current labor and tax legislation and suitability for the company's size and organizational structure.
Using HRM as a part of ERP (Enterprise Resource Planning) allows you to integrate it with other modules. It is convenient from the point of view of using a single management base for all company divisions, reduces the speed of operations, and eliminates data discrepancy. The management should be ready for considerable expenses on integration and personnel training. However, if the ERP system is already implemented, HRM development as an additional module will be more reasonable than developing a separate HRM software.
MaybeWorks expertise in HRM software development
So, the HRM system allows for reducing the time of decision-making at all management levels and ensuring the effectiveness of these decisions. Personnel management costs decrease, and labor productivity increases. Developing appropriate human resource management software solutions is necessary for medium and large enterprises interested.
Of course, full automation of HRM systems in small businesses cannot be called a cost-effective venture, although this issue will be resolved in the not-so-distant future. But even in small companies, the transfer of only accounting and settlement functions under the management of specialized software significantly facilitates business management as a whole, freeing up additional resources.
Right now, MaybeWorks developers augment the client IT team developing HRM software. Features of this HRM system are:
- Informative data tables allow adding any information about candidates and vacancies
- Google integration provides simple Google calendar and Gmail integration
- Email templates allow creating own email templates and reusing them in every letter
- File storage provides large storage for any candidate-related attachments
Feel free to contact us to discuss assistance in optimizing and automating recruiting and HR processes.
