How to Create a Human Resource Management System?

Human Resource Management System, or HRMS, is a set of software solutions used to optimize and automate the management of human resources and related processes throughout the entire life cycle of an employee. In this article, you will learn how to create a human resource management system and integrate it into your business.

Step 1: set project goals

When planning the development of a human resource management system, it is worth remembering that this is not a goal in itself, but a tool to achieve your business goals. Therefore, before starting to create an HRMS, you need to determine what goals you intend to achieve with its help. This will help direct your thoughts on the right track and align the project goals with the business goals of the company.

For example, if you have high employee turnover and your income is based on how quickly you can hire new employees and get them ready for the job, then your HRMS platform should be focused on helping you achieve those goals. More specifically, the goals of HRMS implementation will be:

• Reducing hiring time compared to current rates.
• Reducing adaptation time in comparison with current indicators.
• Maintaining and/or improving the quality of work of new employees.

These are specific goals that are relatively easy to measure and therefore assess the impact of the new HRMS implementation. So, if you want to speed up hiring times, then you just need to measure the time you spend finding a new employee - from planning this task to signing the hiring agreement, and then see how you can improve those metrics using HRMS.

Step 2: create a business process map

To understand exactly how you can improve the hiring process (or another point in your business), you can use a schematic map of business processes. It will help you to visualize all the stages of recruiting, solutions and tasks, the persons involved. This makes it easier to analyze the business process in order to identify bottlenecks that can be optimized using an HRMS solution.

To map the hiring business process, you need to interview all employees who are involved in this and describe the entire process: determining the need for hiring new employees, preparing a job description, finding suitable candidates, considering candidates and choosing the best among them, preparing for an interview, preparation of a recruitment proposal, interview and the final selection or selection of several people for the internship.

Step 3: Decide how you can improve business processes

Now that you have a complete understanding of how everything is working in your company at the moment, see if the process is well-ordered and if it follows one common pattern. If your business processes are chaotic and confusing, then integrating a human resource management system is likely to only multiply the mess rather than improve your HR experience. The saying goes very well here: "Garbage in, garbage out".

To avoid chaos in personnel management, bring all business processes to one standard: develop job descriptions and regulations, communication rules, etc. These do not have to be strict instructions, it is enough to draw up standard action templates (tips).

When you have regulated your business processes, see what can be optimized in them with the help of a human resource management system. The simplest example is the transfer of workflow from paper to digital format and its automation. HRMS can also automate the placement of hiring advertisements (on social networks and on other specialized platforms), collecting responses and screening candidates according to the most basic criteria (education, experience, expected salary, location, etc).

How exactly HRMS integration can improve your business processes, you can find out by consulting with the companies that develop HRMS solutions.

Step 4: develop a vision for your HRMS project

Once everything is in order with the previous step, you can start thinking directly about the vision for your human resource management system. If you are not a technician, it is recommended to seek professional help at this stage. How to find a technical partner, and what to look for when choosing one, is described in the article: «How to choose a developer company?».

Together with the developer company, you must develop a project specifications document that will indicate: goals, functions, design requirements and a development plan for your project to create an HRMS.

Functions of HRMS solutions

Typically, HRMS solutions have five modules: core, human resource management, talent management, recruitment and / or tracking systems, and learning management. When developing your human resource management system, you do not have to implement all of them. You can create only one or a few modules that you need, and add the rest as needed.

Main. A key part of any HRMS is its central employee information database, also known as core HR. This is where records about your staff are stored: personal information, job classification, benefits, employment history, compensation information, etc. This module also usually includes a self-service interface so that employees can view and update their information as needed.

Personnel management. This HRMS module provides a range of functions for day-to-day HR management and strategic planning, from managing staff scheduling to forecasting workforce needs. In addition, this module usually has the ability to track working hours and attendance of employees, through which you can automatically calculate hours of work, manage absences, plan vacations, etc.

If analytical tools are built into the personnel management module, then this will make it possible to track personnel performance and its change over time - a very useful function for any business.

Talent management. This is the functionality that is responsible for tracking employees with the necessary skills and talents, their development and retention in the company, which usually includes such specific capabilities of HRMS solutions:

• Assessment of employee productivity / efficiency.
• Setting goals for employees and tracking their achievement.
• Planning and career development of promising employees.
• Management of awards, premiums, bonuses and compensations.

There are also performance review solutions where you can create online forms with rating and review systems that managers will fill out once a week, month, quarter, six months and / or a year. In this case, employee reviews are often supplemented by the so-called "360 degrees" method, where through a survey of the business environment (bosses, colleagues, subordinates) of the employee, the degree of his suitability for the position is revealed.

Some advanced HRMS can also help even with career planning, finding and training successors. This is done by tracking competencies and skills. The system itself will offer the prospective employee suitable career paths and recommend appropriate training to obtain the skill level required for the position planned for him.

Recruitment (candidate tracking). HRMS can have recruitment functions or a range of tools to help you find, attract, interview, and ultimately hire candidates for open positions. Some systems also have additional features such as marketing-for-hire capabilities, job pages, automatic vendor search, and tools to contact and interview candidates.

Personnel training management. Many HRMS products have a Learning Management System (LMS) that is responsible for course creation and administration, knowledge assessment and training certification, and assistance with sending to study or delivery of online training materials and courses. LMS also stores information about what kind of training employees have passed, how their knowledge and skills have grown, employees' responses to the company's training offers.

Reports and analytics. One of the main advantages of HRMS is the ability to collect and store large volumes of data about the company's personnel, both as a whole and for each employee separately, which makes it possible to analyze in detail such indicators as pay levels, staff turnover, recruiting rate, number of sick leave. , the use of various technologies, etc.

Company leaders can use this data to make decisions that affect employee retention or business growth. In addition, sometimes in this way you can notice non-obvious things, for example, that after the installation of some equipment, the number of accidents at work increased, which may indicate the need for additional training of personnel.

Technology stack for HRMS

Development plan for your project

You need to plan the development and development of HRMS for your business in such a way that you have the opportunity to test the system or its parts without waiting for 100% software availability. Otherwise, you risk wasting time and money before you can see problems that may be related to the confusion of business processes, the transfer of data from your current database to a new HRMS, or a common mistake in the code.

The optimal solution here would be to divide the system into several segments, which the development team can create in a short period of time and immediately start testing them on real data and business processes. This way, you can see early enough if you are heading in the right direction to adjust the course of the system and stay on budget.

You can plan this development of your human resource management system using a method called SMART, which helps to define project goals and track their achievement. Use SMART to evaluate your HR processes and see if you can improve them.

Step 5: Get Started with HRMS Development

You can integrate HRMS into your business in two ways: use a ready-made solution (for example, a SaaS service) or develop the desired product from scratch. HR ready-made products are more suitable for companies with standardized and well-established business processes like McDonalds, Walmart or Starbucks. If the company has a unique workflow, or it falls under the rules that were not taken into account by the standard HRMS, then the software for its personnel management system needs to be developed through custom development.

If you choose custom development, then the process of creating your human resource management system will look like this:

1. Signing a contract. At this stage, you and the developer company determine the concept of the project, its functionality and design requirements, after which you draw up a technical task, discuss all the details of cooperation (development time, payment, KPI) and conclude an agreement.
2. Prototyping HRMS. Further, UX designers, based on the technical assignment, analysis of the target audience and user flows, create an application framework and send it for approval to the customer (you).
3. Creation of interface design. After agreeing on the framework, the designers develop application mockups - a static representation of the interface design in the form in which the end users of the HRMS will see it. Quality design includes: simple structure and navigation, intuitive operation and compliance with current design trends.
4. Direct encoding. At this stage, your human resource management system is embodied in code. Front-end, back-end and mobile developers are responsible for writing the product code.
5. Product testing. After writing the code, QA specialists get down to business and test the created HRMS in all possible use cases in order to identify and remove errors with bugs.
6. Release and support. At the last stage of HRMS creation, it is filled with real data and gradually integrated into real business. Also, the work of technical support is being established, which will collect feedback from users and solve problems that have arisen.

It is important to note that some time before the full readiness of the HRMS (usually at the testing stage), the company's personnel are trained to work with the new system. To do this, the product is launched in demo mode, when it can work with real data, but without affecting real business processes (like a demo account on exchanges).

Cost of creating HRMS