Defining Human Resource Management Systems (HRMS)

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A human resource management system (HRMS) streamlines HR tasks, makes employee data accessible to those who need it and delivers analytics that help your business make better personnel decisions. In this article, we help you choose an HRMS platform that has all the right features to support your business. Here is how to find your best fit.

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What is a Human Resources Management System? 

A human resource management system (HRMS) is a centralised platform for storing employee data, automating routine HR tasks and analysing data to inform business decisions. 

Useful throughout the employee life cycle, an HRMS can be used from recruitment to performance all the way through to offboarding. 

An HRMS typically provides more robust features than a human resource information system (HRIS). 

Who Typically Uses an HRMS? 

An HRMS is applicable across your organisation, not just in HR. In fact, every person in the business will touch the system at one time or another. HRMS users can be broken down into three groups: employees, line managers and HR managers.


Employees typically use an HRMS to manage their employee data and access self-service features. Through the system, they can directly update contact details, emergency contacts and banking information. Having this information readily available makes it easier for employees to check and adjust their data without navigating cumbersome bureaucratic systems. 

Employees can also use an HRMS to check available vacation or sick leave and submit requests for time off. This streamlines the leave management process and makes it easy for employees to check the status of requests.

Line Managers

An effective HRMS will help line managers stay on top of employee needs and encourage effective performance management. Line managers can often approve leave requests right in the HRMS. Time can also be tracked,  allowing line managers to set and confirm working hours

Performance management is supported by HRMS tools like evaluation reminders, progress reports and meeting history. These tools help line managers set goals, provide feedback and conduct effective performance reviews for their team members.

HR Managers

An HRMS supports HR managers by automating routine tasks, maintaining records and delivering HR reports and analytics. For example, HR managers use HRMS to manage:

  • Talent acquisition. An HRMS makes it easier to publish job postings and communicate with candidates.  

  • Document management. Gather employee documents into a single accurate database. HR managers use this to collect and store government forms, work permits, pay details and more.

  • Legal compliance. HRMS platforms regularly update to keep records and pay calculations in line with changing labour laws.

  • Analysis. Reporting on topics like headcount, open positions and absence rates helps HR provide nuanced feedback and guidance to operational leaders.

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What is the difference between HRIS and HRMS?

HRIS and HRMS are often used interchangeably. The truth is a lot more complicated, but in general HRIS is a more basic system than HRMS.

Comparing HRIS to HRMS is a lot like comparing a filing cabinet to a digital workspace. Both will systematically file your important data, but HRMS goes a step further by giving you greater tools to analyse that data and draw insights. 

If your business is still relying on spreadsheets or paper files, an HRIS can be a great step forward. Look to an HRMS when you’re ready to invest in more substantial tools that will help lead your personnel decisions with data-driven reporting and analytics. 

What Does a Human Resources Management System Do? 


What it does

Talent Acquisition

Create and distribute job postings across multiple job search platforms. Track candidate status within the hiring pipeline from sourcing to extending an offer.


Gather new hire documentation. Guide new hires through their first days and weeks.

Digital employee files

Store and organise employee data and forms in one central platform. Assign access rights to ensure only the right people can access employee data.

Legal compliance 

Collect and report required employee data to government entities. Maintain employee data in compliance with data privacy laws.

Payroll administration

Automate payroll calculation and pay stub creation.

Benefits administration

Give employees access to select their benefits. Automate benefit deductions calculations. Track benefit usage for individual employees and across the organisation.

Learning and development administration

Track training attendance and completion rates. Publish optional training opportunities to encourage enrolment. Add calendar invites or reminders for trainees.  

Leave and attendance tracking

Provide employees with self-service access to request leave or view their leave balances. Calculate available leave balances by employee and coordinate return to work plans following long-term leaves. 

Time tracking

Track employee time for payroll calculations. Track overall hours put into defined work projects.

Performance management

Templates and reminders help ensure routine performance reviews are conducted on time. Track performance goals and progress.  

Data integration

Integrate with existing software to automatically pull in data for things like expenses, benefits costs and more.


Evaluate organisation progress toward goals and evaluate personnel spending. Automate routine reports to track progress over time. 

How Does an HRMS Work? 

Most HRMS platforms operate on cloud-based software. It is common to have customisation options to select the features and integrations which best meet your business needs. 

The HRMS streamlines HR tasks by automating information gathering, offering template forms and generating reports. It also gives employees self-service access to submit their own information, make changes to their information or make requests for time off or other adjustments. 

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What are the Benefits of an HRMS?


How it helps

Data accuracy

HRMS platforms reflect updated data in all linked locations, eliminating the need to manually remove outdated information. This makes it easier to provide accurate compliance reports and update company policy documents.


From staying in touch with job applicants, to guided onboarding and transparent performance evaluations, HRMS platforms make it easier to communicate across the organisation effectively.

Cost savings

Eliminates the need for manual data entry, and reduces the overhead needed to create and maintain employee data files or run personnel reports.

What Features Should You Seek Out in an HRMS?

HRMS platforms cover a number of functions, but keep an eye out for platforms that will support you in four key areas: talent management, HR management, reporting and analytics and scalability. 

Talent Management

As your business grows, it is vital that you support talent through every growth stage. This begins with talent acquisition. Look for options to streamline your job posting and advertising efforts, then track candidates so no one falls through the cracks. 

After hire, look for features that keep performance reviews on topic and on time. Continue supporting employee growth with targeted training opportunities.

HR Management

Save time and headaches with HRMS features that streamline and automate HR tasks. This starts with managing new hires. Look for features that smooth the onboarding process and automate gathering new hire information.

Keep track of employee time and manage absences with features that give employees self-service access to manage their details. Automated holiday approval processes can save time, while automatic leave accrual calculations keep everyone aware of available balances.

Make sure your HR data is secure and compliant on the HRMS platform. Keep all of your employee data in one place and look for options to save time with standardised templates.    

Reporting and Analytics

The real strength of HRMS platforms lie in their reporting and analytics features. Whether you want to stay on top of absence trends, identify which job search platforms are sending the most applicants, or check out how employee salaries have changed over time, HRMS reporting and analytics tools can deliver the insights you need.

Keep your reports secure with options that limit which reports each employee can access. Look for reports that update regularly to ensure you’re receiving the most accurate insights.

HRMS Scalability

HRMS can benefit your business from the very first hire. However, you likely don’t need as many detailed reports and complex features when you are just starting out. A key feature that benefits companies of all sizes is the option to scale up as your business grows. 

Personio scales pricing to start with essential functionality for small businesses and grow to support even large enterprises. This makes it easy to start benefiting from HRMS features now, and build up later as your business grows. 

Should HRMS be Part of Your People Strategy? 

Engaging HRMS helps businesses manage the HR function more efficiently. This goes beyond the HR department to benefit line managers and standard employees. With Personio’s all-in-one HR software solution, you gain access to strategic HR insights, keep your employee data secure and engage a platform loved by independent experts

Ready to learn more? Start a free 14-day trial of Personio now, or book in time with one of our HR experts today.  

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