How to choose the right HRMS for your company: 7 rules

If you are seeking to make an investment into the latest HR technology in hopes of achieving higher productivity, right hires, and minimized expenses, then choose a cloud-based HR management system. This is an all-in-one solution for streamlining general HR processes within your company, including attendance, payroll and absence management, performance appraisal, and talent management, to name a few.

Companies that have already been using core enterprise human resources management systems (HRMS) are making the massive switch to SaaS solutions, as the latter choice offers better flexibility and a wider range of options. But not every HRMS solution will be helpful. With the variety of HRMS vendors available out there, the problem of variety arises. How do you assure that you’re getting the best value for your money? In order to ensure the full automation of the HR processes and avoid overpaying for functions and features that won’t be used, it’s sensible to start with determining your human resource goals and strategy and taking the time to research existing HRM systems.

To choose the HRMS software that can bring your human resources department maximized benefits, you can take the following steps prior to making a purchase decision:

1. Reconsider or Update Your HR Strategy

Planning the purchase of an HR management system is an excellent reason to review and make adjustments in your overall HR strategy for the next few years. Why? Because HRM systems provide a means for you to automate the processes which earlier were done in an old-fashioned way, which in turn will save the time of HR managers and help make a breakthrough in the areas where the staff may have been underperforming.

So, start by defining how you’d like to organize the work of the HR department and which HR goals to reach - and only then get down to considering possible software solutions. The right HRMS is not the one that has the most positive feedback from other companies, but the one which best fits your strategy.

2. Define Your HR Software Needs

After you’ve completed step 1, you have a long-term action plan for your company’s HR. It’s now time to determine the tool that will help you accomplish your goals. So, define the HR tasks that your software needs to fulfill, and be as detailed as possible. The majority of HRM applications offer the following functions:

• Employee database (you can manage and store employee data such as attendance, performance, leave, compensation, absence, scheduling, and much more)
• Recruitment, applicant tracking, and onboarding
• Learning management (organizes training data, such as information about courses, locations, trainers, and prerequisites)
• HR analytics
• Report writing
• Benefits administration
• ESS

However, this list is too generic and might not reflect your organization’s bespoke needs. To clarify your requirements, create a list of the functions you actually need and then ask 2-3 questions for each point. For instance, if you need the Pay History option, you might clarify it as follows:

What period of time should be tracked - or should the history be unlimited?
Will there be an analytics or reporting option?

As soon as your requirements are clear, it’s time to create a spreadsheet that will be your tool for vendor comparisons.

3. Set the Budget

Before you can actually start searching for vendors, it’s essential to determine how much money you are ready to spend and seek management’s approval. Usually, the HRIS charge includes a one-time payment for software, a monthly or quarterly fee, and costs for implementation, support, etc.

4. Choose 4-5 Vendors for Review

As the main criteria for picking the HRIS is set, it’s time to browse different vendors and fill out the spreadsheet to analyze how they meet your requirements. There are dozens of vendors offering their solutions, so the task is not so easy. Actually, it will be helpful to pick up to 10 vendors to have reserve options in case the primary vendors will be screened out after  further dialogue or demo.

5. Research the Company or Talk to Support

To make the process of choosing less time-consuming, it’s better to do further research about the company policies and talk to a support team before setting up a demo. Some vendors provide updates on a quarterly basis – will this be convenient for you? It’s also helpful to clarify their information security strategies and find out whether they back up the data.
When finding out more about the company, pay attention to how many years they have been in business. More years mean more successful products, more satisfied clients, and fewer bugs and technical issues  that might occur from a less expensive company.

6. Conduct the Demo

Now it’s time to test the software, either online or the installed version. Invite the people who will be using the HRMS on a daily basis, so they can see from the inside how the software works and make their remarks. During the testing process, make notes in your spreadsheet about the various functions and how they satisfy you; if any questions arise, note them as well to ask a support team later. One of the key features to be evaluated at this stage is usability; don’t choose software with a complex interface that may slow down the speed of work and possibly cause errors in the future.

7. Make a Purchase Decision

If you’ve strictly followed the above points, by this step, you’ll have a handful of solutions that best fit your technical needs and expectations. The final step is to get approval from management and start using the HR management solution organization-wide.

A human resources management system can be just what your organization needs to optimize current processes, provide you with analytical data to improve productivity and streamline communication between management and staff. However, to achieve the goals you set, you should start with determining the critical HR needs of your company and the tools which will serve your goals. If you’ve taken the time to first identify your needs, then the result of using an HRMS can even exceed your expectations.