hrms function

What Does an HRMS Do?

Human Resource Management Systems (HRMS) are tech tools helping companies manage their workforce. Wondering how they came about?

Back in the 1970s, when companies wanted to handle employee management more efficiently, the first thing they computerized was payroll. Big computers, called mainframes, were used to calculate what workers earned, subtract deductions, print checks, and track what the company owed in payroll. 

The late 1990s saw the internet rise, bringing automation to more HR tasks. By the 2010s, cloud tech became common, allowing companies of all sizes to use HR applications without the need of expensive hardware or IT staff.

What is an HRMS in Malaysia?

An HRMS, or human resources management system, is software applications designed to oversee HR processes throughout the employee lifecycle. It is a tool that enables companies in Malaysia to comprehend their workforce better while ensuring compliance with evolving tax laws and labor regulations.

Primarily utilized by HR leaders and staff for day-to-day workforce operations and compliance, the benefits extend beyond HR departments. 

Managers and employees leverage self-service features, particularly appealing to younger hires, while executives gain insights into workforce trends and their business implications.

Furthermore, given that HR-related expenses are among a company’s largest costs, HRMS integration with accounting systems proves invaluable for finance teams, offering deeper financial insights from HR data.

Benefits of Using an HRMS in Malaysia

Centralized Employee Records

These systems provide a single repository to store, update, and maintain all employee records. By consolidating this information, it enables better reporting, simplifies compliance, and facilitates audit preparations. 

In a regulatory environment like Malaysia’s, having centralized records aids in meeting legal requirements and eases reporting burdens.

Reporting and Analytics

HRMS tools enable the generation of operational reports to track HR information, ensuring compliance reporting, establishing key performance indicators (KPIs) for HR process evaluation, and integrating HR metrics into financial dashboards for comprehensive company-wide analysis. 

This capability is valuable for Malaysian businesses to gauge HR performance against business objectives and comply with reporting requirements.

Rewards Calculation

HRMS systems calculate various forms of compensation, from salaries and hourly wages to bonuses, commissions, and deductions. This feature ensures accurate payments to employees while complying with Malaysia’s regulatory requirements on wages and benefits. 

Additionally, it may include aspects like retirement fund contributions or reimbursements, aligning with local employment practices.

Employee Benefits Administration

HRMS platforms assist HR professionals in crafting benefit plans, setting eligibility criteria, and managing payments to benefit providers. They often include self-service options for open enrollment and integration of benefit costs with accounting systems. 

In Malaysia, where benefits are an integral part of employment, this feature ensures accurate and compliant administration of employee benefits.

Talent Acquisition

These tools empower recruiters to create career pages, job requisitions, manage positions, integrate with job boards, track applicants, conduct background checks, and handle job application processes. 

In Malaysia’s competitive job market, these features facilitate efficient hiring practices and ensure compliance with recruitment regulations.

Talent Management

HRMS platforms enable HR professionals to evaluate and develop employees through performance reviews, goal management, and skills assessments. This functionality aids in talent retention and skill development, crucial in a market where retaining top talent is a priority.

Time and Attendance

HRMS systems streamline time-off requests, manage balances, schedule employees, and oversee absence management. Integration with payroll systems ensures accurate and timely payment processing, adhering to labor laws and regulations in Malaysia.

Learning Management

HRMS platforms offer tools to facilitate employee skill development through course administration, curriculum development, testing, and certifications. They allow companies in Malaysia to manage and track required compliance training, essential for meeting industry-specific regulations prevalent in the country.

Workforce Planning

These tools help companies plan and budget for workforce costs, identify skill gaps, create succession plans, and prioritize recruitment efforts. In Malaysia’s dynamic market, this feature aids in strategic HR planning and aligning workforce capabilities with business objectives.

How to Choose the Right HRMS for Your Business

Choosing the right HRMS (Human Resource Management System) for your business demands a strategic approach. Start by outlining your organization’s specific needs and goals. Next, assess factors like scalability, user-friendliness, and integration capabilities. 

Consider the size of your workforce, growth projections, and the functionalities required to streamline HR operations effectively.

Moreover, it is important to evaluate available HRMS options against your criteria. Look for features such as payroll management, employee self-service portals, benefits administration, and analytics tools. Prioritize solutions that align with your industry standards and compliance requirements.

Furthermore, engage stakeholders from various departments to gather different perspectives on system usability and functionality. Request demos or trial periods from potential vendors to ensure compatibility with your business processes. 

Lastly, assess the vendor’s reputation, support services, and upgrade frequency to ensure a long-term partnership.

HRMS Security

Protecting personal employee data is a must for privacy, compliance, and a positive workplace. To achieve this, strong security measures, such as the following, within the HRMS are highly important.

Two-Factor Authentication

Implementing additional security layers, leveraging mobile technology for enhanced verification.

Data Encryption

Safeguarding all personnel data during storage and transmission within the HRMS.

Password Policies

Enforcing password complexity, length, and reset intervals (e.g., every 5 weeks) to prevent unauthorized access. 

Role-Based Access

Tailored access rights for different workforce roles, enabling managers and individuals to manage relevant data.

System Segmentation

Restricting data access to authorized personnel or roles, ensuring specific HR segments are accessible to designated teams.

Final Takeaways

HRMS revolutionizes HR operations for Malaysian businesses, optimizing workforce management, enhancing employee engagement, and providing invaluable insights while ensuring data security and compliance. 

All in all, adopting this HR software in Malaysia is key to streamlining operations and boosting a more efficient, compliant, and engaged workforce.

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