Guide: Find the HR System Perfect for Your Business Needs
blog/guide/find-the-hr-system-perfect-for-your-business
2024-05-31
Why is Human Resources (HR) Important for Organizations?
Whether you’re a small business or a large enterprise, Human Resource functions have become increasingly more important to an organization's success, especially over the last several years. More and more organizations consider the HR function to be a strategic function.
Why is HR so important? HR is so vital to an organization's success because it plays an integral part in how and who your organization hires, how you develop your workforce, and how you keep your employees happy (among many other things), which plays a direct part in your overall productivity, retention rates, and profitability.
2 Examples of HR’s Crucial Role within an Organization
After the Covid-19 pandemic, you may remember a few popular phrases that people were using such as “the great resignation” or “remote workers.”
These terms signified major shifts in the employment landscape, such as the use of “the great resignation", which described a wave of employees voluntarily leaving their jobs in 2021.
This trend was fueled by factors such as burnout, the quest for better work-life balance, and the search for more fulfilling work.
To address this, HR departments took several key actions, such as conducting exit interviews and surveys, implementing programs to boost morale, and reviewing (and improving) compensation and benefits packages.
Similarly, the term 'remote workers' refers to the significant increase in employees working from home or other locations outside the traditional office. The pandemic necessitated a rapid shift to remote work, which has since become a permanent fixture for many organizations.
HR played a crucial role in supporting remote work by coordinating with IT departments to ensure employees had the necessary tools and technology to work effectively from home, including secure internet connections, laptops, and collaboration software.
Additionally, many HR departments developed virtual onboarding processes and online training programs to help new hires acclimate and keep existing employees' skills up to date.
And these are just a few examples of how HR functioned within organizations that successfully minimized the damage from the pandemic and helped the organization combat challenges.
To effectively adapt by making informed decisions, you need data.
Therefore, you need a system that can help you collect, manage, and analyze this data efficiently, tailored to the specific needs of your organization.
What Type of HR System Best Fits Your Company Size?
Enterprises (1000+ Employees)
HCM (Human Capital Management):
Best for: Strategic HR planning and analytics.
Features:
Comprehensive HR functionalities including employee data management, payroll, attendance tracking, and benefits administration.
Advanced tools for talent management, employee engagement, performance tracking, and training and development.
Strategic HR processes like workforce planning, advanced analytics, succession planning, and regulatory compliance.
Ideal for: Larger organizations or those with complex HR needs, looking to align HR strategies with overall business goals and drive organizational growth through people management.
Medium-Sized Businesses (100-999 Employees)
HRMS (Human Resource Management System):
Best for: Comprehensive HR management.
Features:
Includes all basic HRIS functionalities such as employee data management, payroll, attendance tracking, and benefits administration.
Additional tools for talent management, employee engagement, performance tracking, and training and development.
Ideal for: Growing businesses that need a more holistic approach to managing their workforce and enhancing employee performance.
Small Businesses (1-99 Employees)
HRIS (Human Resource Information System):
Best for: Basic HR needs.
Features:
Focuses on core HR functions like employee data management, payroll, attendance tracking, and benefits administration.
Ideal for: Small businesses looking to streamline HR operations without the need for extensive features.
Key Takeaways
Each of these systems builds upon the core functionalities of the HRIS, adding layers of capabilities to suit the needs of different-sized organizations.
HRIS systems provide essential HR functions, making them perfect for small businesses.
As businesses grow and require more comprehensive management tools, HRMS systems integrate additional features for talent and performance management.
For large enterprises, HCM systems offer the most advanced HR capabilities, including strategic planning and analytics, ensuring alignment with broader business objectives.
Choosing the right system depends on your organization’s size, complexity, and strategic HR goals, as is the case with any software selection.
It’s also important to remember that not all systems are appropriately labeled by vendors. Some software may offer some functionalities of a more advanced system but lack essential features for your core business processes.
If you need help finding the perfect system for your business, reach out to us here.
