HRMS Software Features And System Requirements Guide in 2023

Are you looking for a new HRMS with the best HR software features? Well, it’s a great move as a human resource management system truly streamlines HR data and automates your HR processes. Also, 74% of businesses are increasing their spending on HR technology. So, you must jump on the bandwagon to remain competitive.

Not just that, adopting a human resource management system reduces HR costs, enhances overall productivity, saves your employees’ time, and lets you focus on crafting better HR strategies.

But the market is flooded with varying HR software features, making it difficult to pick the right HRMS. So, for your convenience, here are HR software features that must be present in your HRMS features list when looking for a new HR software. Let’s dive right in!

HRMS Software Features And Requirements Checklist

Streamlining employee data is an indispensable function of HR departments. For that, you need proper human resource management systems that align with your business needs well.

Know all about HRMS before proceeding.

Here’s a list of HR software requirements and features you must check off while finalizing an HR software:

1. Applicant Tracking and Recruiting

Applicant tracking system helps you quickly find and hire the most qualified candidates by automating operational tasks. Here are some common human resource management software features that must be present in the applicant tracking module:

• Creation of reports and custom groups to track candidates
• Structuring the recruitment process–sending offers to candidates, supporting digital signatures, accessing the signed offer (digital)
• Job library–the job description, salary range, level, and so on
• Configurable employee recruitment workflow
• Customizable offer templates
• Organize a communication flow with candidates

With this feature, you can reduce your hiring time effortlessly while diverting your resources to more strategic tasks. And your HR department won’t have to manually sift through unsuitable candidates anymore.

2. Employee Onboarding and Administration 

Employee onboarding and administration involve arming new hires with relevant information and techniques to enhance employee performance from day one. This module sharpens your onboarding process, giving new hires a positive impression.

Here are some tasks the onboarding module of your human resource management software must be capable of performing:

• Frictionless transition of new hires from recruiting to onboarding
• Orientation page customization with the company and key personnel information
• Filing and signing web-based forms, policies, and other important documents
• Creation of a to-do list for the onboarding team

With a great onboarding process, organizations tend to boost new hire retention by 82%. So, ensure your human resource information system has a comprehensive onboarding module.

3. Performance Management

Performance management is one of the key features of HR management.

Setting standards of performance expected from employees/teams and defining performance assessment paths is tiresome if done manually. That’s a major reason why one-third of US businesses are discarding traditional performance management and opting for performance management systems as part of the HRMS.

A robust HRMS (performance management software) furnishes real-time 360-degree feedback by constantly recording performance-related data. This enhances employee productivity as feedback is often visible on the dashboards for individual employees to access and improve accordingly. Not having to email evaluation reports to employees or conduct performance review meetings saves significant time.

Know more about How HR software improves performance management. 

4. Compliance Management

The laws and regulations are dynamic and evolve regularly. If done manually, being updated with all of them can be challenging, leading to heavy fines and a destroyed brand image

That’s where a modern cloud HRMS comes to your rescue. Its compliance management feature keeps you compliant by updating the statutory changes on the software, so you don’t have to keep checking the law changes.

Some laws and regulations HRMS must help you abide by:

• Filing employee eligibility forms
• Payroll and tax compliance
• Adhering to equal employment opportunity
• Business-specific compliance
• Following general data protection regulation

HRMS ensures compliance by keeping a centralized record of basic compliances and sending alerts on due dates or regulation changes.

5. Benefits Management

Benefits management organizes employee benefits information and facilitates benefits administration. Do you know 73% of employees stay longer in their current organization if given adequate benefits? That’s one major reason why monitoring employee benefits must be your priority.

Benefits management feature allows you to:

• Track changes in personal information
• Give benefits enrollment options to employees (self-service)
• Customize eligibility rules
• Manage employee compensations
• Integrate employee data with payroll

HRMS software streamlines the employee benefits data and benefits administration, saving HR managers hours of labor. Not just that, employees can check benefits available, time off, paid sick leaves, and more with an automated HRMS, boosting employee satisfaction.

6. Compensation Management

Compensation management manages employee salary, benefits, and incentives according to their skills, performance, and the value they add to the business. But laying out fair compensation plans and upgrading them with time can be tiresome for your HR department. That’s why a compensation management feature is a must-have in your HRMS software.

Your compensation management module is one of the necessary HR software functions. It must be equipped with:

• Automated compensation management rules
• Compensation dashboard
• Compensation plan overview
• Data security of confidential data and access controls
• Budget allocation
• Define eligibility rules to segregate employees under different compensation plans

Fairly compensating your employees increases retention rate and motivation to perform better. So having compensation management tools as part of HRMS software will help HR professionals do that with ease.

7. Time and Attendance Management 

Time and attendance management manages employees’ work time, tracks leave, and records overtime work. But if done manually, it leads to inaccurate records as employees might forget to make entries or make illegible entries.

The solution is to install an HRMS software with an automated time and attendance management system that tracks absences and records working hours on a digital timesheet.

Some basic HR management software features of this module:

• Employee time clock management
• Attendance tracking (with biometrics)
• Accrued paid and unpaid leaves
• Exception reporting option–missed shifts or overtime
• Time-off approvals
• Generate employee performance reports

With this module, HR professionals can be relieved that employees are not over or underpaid. Also, employees can check the leaves left, request time off, update the clock in/out, etc., which improves their job satisfaction.

8. Learning and Professional Development 

Learning and professional development revolves around instilling employees with new skills to be future-ready! It helps employees improve performance by brushing up on skills and staying updated with market trends.

A learning management system of HRMS software can properly schedule and centralize (existing or newly added) online courses and personnel development programs while incorporating a robust corporate learning culture.

3 HR management system features that can level up your learning and development game:

• Track and report employee certifications
• Set rules to auto-assign courses
• Supports online training and curriculum creation

50% of employees will need reskilling by 2025. HRMS can help you achieve that and enhance performance by developing your employees.

9. Employee Engagement 

Employee engagement defines employees’ degree of belongingness and loyalty to their organization. Taking measures to ensure that employees feel valued is a step every organization must take. But how?

HRMS software is your answer. Here is how HRMS contributes to employee engagement:

• Conducts employee satisfaction surveys, so they are vocal about their issues
• Arms employees with knowledge through Learning management system to make them feel cared for
• Creates surveys for unified communication through social tools, so employees feel they have a say in the organization
• Recognizing and rewarding employees’ success

With HR management software, clear communication about policy changes–benefits, compensation, leaves, and so on is smooth and easy. It makes employees aware of what they get in exchange for their effort. This boosts their motivation to work and keeps them engaged.

10. Employee Self-Service 

Employee self-service refers to an HRMS feature allowing employees to access and update their data without relying on the HR manager.

Ensure that your HRMS features of the employee self-service module include:

• Time-off request option
• Benefits selection and enrollment
• Employee record updation
• Configurable user-based access permissions

In today’s technology-driven world, almost all employees prefer immediate access to information. HRMS provides exactly that which boosts employee satisfaction while saving HR time in furnishing information and approving requests. It ensures data security too.

11. Payroll Management

Inefficient payroll processes can lead to major losses for the company. It might get overwhelming to pay salaries after manual calculation. But HRMS software has you covered with its top-notch payroll functionality. It swiftly calculates employee salary, allowances, and overtime rates with a pre-determined formula without having you move a finger.

Make sure your HR system features of this module:

• Supports multiple currencies
• Has inbuilt payroll codes
• Gives employee access to pay slips and tax forms
• Has data validation tools
• Integrates with benefits and time & attendance module of HRMS

With a payroll management module, streamline your financial data, reduce the required staff time, and centralize the data without maintaining 100s of databases or 10 spreadsheets.

12. Document Management

Document management refers to keeping employee-related documents in one place (cloud storage) for better organization and quick access. HR processes often require referring to employee documents–government ID for making changes in their off-cycle pay increase, for instance.

Your document management system, one of the features of a human resource information system, must furnish the following information about employees:

• Basic personal information
• Background details–job and salary history
• Bank and tax details
• Current insurance plans
• Time off requests and leaves (used and remaining)
• Detailed performance feedback

Also, ensure your document management software allows you to set access controls, share documents, and update them when needed. With document management, data management becomes efficient and employees can easily use informative documents such as company policies and employee handbooks.

13. Succession Management 

The succession management module of HRMS software features allows you to automate the process of identifying and preparing well-performing employees and promoting them to leadership positions when existing ones quit/retire.

Here’s what this module of HRMS system features must be capable of doing:

• Identifying critical roles requiring succession planning and management
• Selecting potential employees through a potential/performance matrix
• Defining progression paths according to knowledge gaps and role requirement
• Learning progress tracking and comparison with set standards (development plans)

This saves time by eliminating staffing and planning issues of bringing new employees. Also, employees feel empowered and stay longer in an organization with a transparent, data-driven, organized development process.

14. Reporting and Dashboard 

Data and reports are pivotal for a business’s frictionless operations. But manually managing data stacks is challenging and can lead to lost or duplicate data.

Opting for an HRMS system with reporting and dashboard features is a better way to organize your data. It enables you to make informed decisions by analyzing and spotting trends. Also, data retrieval will be just a few clicks away.

Reporting and dashboard, one of the mandatory HR system requirements, must enable you to:

• Create reports through templates catering to different business needs
• Present data in the form of charts and graphs on dashboards for a better overview
• Configure reports and dashboard
• Share scheduled reports with select employees regularly via email
• Set role-based access permissions

You get a fair idea of each department’s performance broadly, so you can take quick actions in case of inefficiencies before it’s too late. That’s what HRMS software features can bring in.

15. Workforce Management 

Workforce management is a series of processes to ensure staff members are at the right place at the right time to maximize productivity. It involves creating a well-defined path to achieve business goals.

This module of the HRMS system manages all the aspects of employee tasks without having to rely on separate databases or spreadsheets for each head.

Must-have features of HR of the workforce management module:

• Plan, track, and manage employees’ work
• Forecasting staffing needs
• Crafting and assigning employee schedules
• Tracking attendance
• Employee experience platforms–view paid time off, request leaves, access schedules, etc

The workforce management module in HRMS software features not only allows you to monitor the workflow but also frees HR from routine tasks, letting you focus on strategic tasks better.

16. Mobile Compatibility

Mobile compatibility is one of the sought-after human resource system requirements. It refers to the ability of HRMS to be accessed on smartphones. HR processes are endless, and accessing them on the go (without logging into corporate HQ) is quite necessary to save time.

Your human resource features of this module must have:

• Access and option to update HR data to your staff on mobile
• Employee access to their schedules, working hours, and reimbursement information
• Attendance and leave records
• Latest announcements records
• Smart dashboard
• Touch Id for lock and unlock for security
• Training progress reports

With easy access to HR information, a business’s overall productivity is meant to rise.

Wrapping Up

We’re sure this HR system requirements specification will benefit your HR processes tremendously. HRMS is meant to cater to your HR processes well. But not all software will fit your business. Before finalizing the best HRMS, know your business needs and goals. The next step is to go through our checklist to understand the features of HRMS software. Now pick the ones that matter the most based on your business needs and opt for a relevant HRMS.