What Should You Look for When Choosing an HRMS Software?

The Human Resources department is an indispensable part of your company. If your HR employees don’t have the tools they need to be effective, everything grinds to a halt. The right HRMS – human resource management software – can make the difference between employees who are empowered to work smoothly and efficiently and a department full of people who are frustrated and stressed. Because there are as many human resources departments as there are businesses, the right HRMS software may look different for every industry. Here are a few things to consider when your business is looking for HR software, regardless of the field your company is in.

Does it handle my ACA Compliance?

Affordable Care Act (ACA) compliance can be confusing for employers. Having an HRMS in place that will ensure your business is running by the book will ease stress for managers and prevent costly IRS penalties for the company. Without an ACA compliance tool on your HR software, you must manually create a 1094/1095 for each person you employ. Not only is this more work, if it isn’t filled out correctly, your business could face serious penalties. Having a tool in place that ensures compliance for health care mandates is a must.

Would my business benefit from a cloud-based or on premise solution?

In the past, new HRMS software meant hardware upgrades were required. However, an entirely new system could be cost-prohibitive for small to medium-sized businesses. When your HRMS is cloud-based, there’s no major hardware upgrades because the software is managed in the cloud. Cloud-based solutions mean upfront savings because there are no installation costs. It also makes it easy to upgrade to the technology you need to make your business run efficiently. Because cloud-based systems are scalable, your HRMS will always be working with the most up-to-date technology.

However, some businesses may benefit greatly by choosing an on-premise HRMS software solution. While it may require a larger upfront investment, on-premise solutions actually have a much lower total cost of ownership over a period of three years or more compared to cloud-based software. On-premise HRMS is much more flexible than cloud services; it can be easily personalized to meet the unique needs of your business. In addition to this, unlike cloud-based HRMS, your initial investment in the on-premise solution can later be capitalized and sold.

Read also: 5 Ways HR Software Makes Onboarding a Breeze

Is it secure?

Equifax’s recent breach, which exposed the personal data of at least 143 million people, should be a warning to us all – no matter how safe your IT security seems, nothing is foolproof. What you can do is make your HRMS as safe as possible, so consider what kinds of protections are included when choosing a system for your business. Security can be tricky – the same software that allows all employees access should still protect each person’s personal data. Whatever HRMS system you choose should have layers of protection, including role-based security and encryption.

Is it intuitive?

You don’t want your employees to stress about learning a new HRMS system – especially those who feel uncomfortable with digital interfaces. Your HRMS software should anticipate user needs. It should be easy to understand and accessible, and necessary user actions should feel intuitive. It’s one of the toughest parts of creating a system, and it’s especially crucial for HRMS systems because everyone – not just millennials who are comfortable with digital technology – will be using it.

It goes without saying that whatever system you choose should be reliable and consistent, so determining your needs based on this information may be tougher than it seems. If you have questions, talk to us. For more details about specific systems, take a look at this comparison guide.