The Role of HRMS in Better Business Decision-Making

HR departments in several businesses spend countless hours on tasks that can best be automated. There are several issues which include spreadsheets, email chains, and manual payroll calculations. This fragmented approach in HR management tends to be both ineffective and expensive.

That is where a capable HRMS software comes really handy. However, you can not just go and get an HRMS software out of the blue. There are a few HRMS software features that you should specifically look for.

Why HRMS Features Matter More Than Ever?

Well, the HR management software features you choose should be capable of simplifying your tasks than complicating them. The real problem lies in the manual HR processes which can have a cascading impact. The leave applications will lay in email trails, attendance records stay scattered across the spreadsheets and compliance documents scattered around in different folders.

This disconnect between the different components can make errors accumulate. The performance and speed of the operations may also suffer. You may also have compliance risks. In essence, it can even deteriorate your employee experience.

That is where HRMS software becomes quite indispensable. However, not every HRMS tool is created equal. There are vendors that promise comprehensive solutions. But, choosing a wrong platform can end up your organisation locked with operational constraints for several years. Migration costs, data transition complexity, and disruption to ongoing HR operations make switching platforms difficult and expensive.

We provide a useful and functional checklist for you to analyse the features and choose the tool that best meets your specific needs perfectly.

Why Businesses Must Evaluate human resource management software features Carefully?

So, why should you look into the features offered by the HR management software features you choose. Remember that the features you choose would have an impact on the entire organisation.

The choice of features would impact the following areas –

HR Productivity and Operational Efficiency

A proper automation feature can help save at least 30 to 40% of your administrative work. With no proper automation, you may end up trapped in manual data entries and may not be able to focus on strategic initiatives.

Your HR team may end up becoming just the operational centre instead of being strategic partners.

Employee experience and retention

Employee experience has today become the most essential element for the corporates. If you can provide an intuitive digital experience to your employees, you can be assured of improving the employee morale.

Employees can be given a strong self service portal so that they need not depend on HR for routine requests. The organizations with comprehensive self-service capabilities report significantly higher employee satisfaction scores and better retention outcomes.

Compliance and risk management

An HRMS without compliance features forces your organization to manually track requirements, compile documents, and hope nothing is missed. However, this approach can be quite risky. It can invite penalties if you fail to comply – even when it may be due to an error.

An HRMS with built-in compliance features automatically applies regulatory requirements, generates required documents, maintains audit trails, and alerts teams to upcoming deadlines.

Business growth and scalability

A poorly chosen HRMS software can end up acting as a constraint for your scalability. If your HRMS software cannot handle the increased need for scaled up operations, you may face severe issues with respect to your business growth.

The right HRMS features—particularly scalability, integration, and multi-location support—ensure your system grows with your business instead of constraining it.

Selecting the right features for your HRMS software can help you in making strategic decisions. Missing core features leads to long-term operational issues that compound over time. This is why careful, thoughtful evaluation of HRMS features before selection is one of the highest-ROI decisions an organization can make.

10 Must-Have Features Every HRMS Software Should Have

Below is the HR software requirements that you should choose in your HRMS software. Every organisation should evaluate the different features offered by a HRMS software and make sure that you are getting the best features possible.

Employee Data & Records Management

The HRMS software is expected to include an effective and efficient employee data and records management.

The data accessible through your HRMS software include

Personal details (name, contact information, address, emergency contacts)
Employment history (join date, previous roles, transfers)
Qualifications and certifications
Salary and compensation structure
Benefits enrollment
Digital document storage (ID proofs, offer letters, contracts, signed policies)
Custom fields based on your organization's needs

A centralised record management provides you the following benefits –

Single source of truth: One authoritative record for each employee
Fast retrieval: Information accessible in seconds instead of hour
Compliance-ready: Complete records organized for audit trails
Security: Controlled access with encryption and backup

Who will benefit?

HR teams: Instant access to complete employee information, faster audits, reduced document chasing
Managers: Visibility into team structure, employee roles, tenure, and development history
Employees: Confidence that their records are accurate, secure, and properly maintained
Compliance/Legal teams: Quick access to documentation during audits or investigations

Employee Self-Service (ESS) Portal

The portal should be something that helps your employees to log in and manage their everyday HR tasks effectively. They can handle the everyday tasks without ay sort of hassles.

These features include

View and update personal information (address, phone number, emergency contacts)
Access payslips and tax documents (Form 16, salary certificates)
Check leave balance and history
Request leave, attendance corrections, or other HR approvals
Download letters (experience letter, salary letter, transfer letter)
Access company policies and handbooks
Enroll in benefits or update beneficiary information
Track training and development opportunities

An Employee Self-Service Portal can be helpful in many ways -

Empowerment: Employees access their own information instantly, 24/7, without waiting for HR
HR productivity: Eliminates thousands of routine requests, freeing HR for strategic work
Data accuracy: Information is updated by employees directly at the source
Employee satisfaction: Instant gratification and autonomy improve engagement
Scalability: ESS allows HR teams to serve far more employees without proportional headcount growth
Track training and development opportunities

Who will benefit?

Employees: Immediate access to information and the ability to submit requests anytime
HR: Massive reduction in routine requests and administrative overhead
Managers: Faster visibility on team requests, approvals, and information
Organizations: Lower HR costs per employee as the system scales

Attendance and Leave Management

This is another essential HRMS software feature that you should never miss out on. It involves tracking employee attendance and managing leave.

The feature will include the following elements –

Attendance tracking: Clock-in/clock-out (biometric, web-based, or mobile app)
Shift management: Define shifts, rotational schedules, and flexible work arrangement
Leave types: Configure multiple leave categories (casual, sick, earned, maternity/paternity, bereavement, etc.) with different rules
Leave requests and approvals: Employees request leave; managers approve in the system
Leave balance calculation: Automatic calculation of accrual, usage, and remaining balance
Attendance reports: Manager dashboards showing team attendance patterns
Integration with payroll: Accurate data fed to payroll for paid/unpaid day calculations

These features come with the following benefits –

Ensures accuracy: Digital records eliminate transcription error
Applies policies consistently: Leave approval rules are configured in the system and applied uniformly
Reduces disputes: Transparent, real-time data minimizes disagreements over attendance or leave balance
Supports compliance: Digital records with timestamps meet regulatory audit requirements
Feeds payroll: Accurate attendance data ensures correct salary calculations

Who will benefit?

HR: No manual consolidation of attendance data, faster leave approval processing
Employees: Real-time visibility into their attendance and leave status, faster leave approvals
Managers: Dashboard view of team attendance, easy leave approvals without HR intermediation
Finance/Payroll: Accurate, auditable source data for salary calculations

Payroll Management & Statutory Compliance

The feature comes with the following features –

Salary calculation: Gross salary, allowances, deductions, and net pay
Statutory deductions: Provident Fund (PF), Employee State Insurance (ESI), professional tax, income tax, gratuity, etc., as applicable by location
Variable components: Bonuses, incentives, overtime, commission, arrears
Compliance filing: Generation of statutory documents (Form 16, payslips, tax deposits, statutory reports)
Multi-location support: Compliance with different tax codes and labor laws by location
Integration with accounting: Payroll data exported to finance systems for general ledger reconciliation

The features will offer you a host of benefits-

Eliminates calculation errors: Configured algorithms handle complex calculations consistently
Ensures statutory compliance: Built-in rules for tax codes, deduction limits, and filing requirements
Maintains audit trails: Every calculation, deduction, and change is documented
Generates compliance documents: Payslips, Form 16s, and statutory reports are generated automatically
Scales across locations: Different tax and compliance rules are managed centrally

Who will benefit?

HR & Payroll teams: Less manual calculation, fewer correction cycles, faster payroll processing
Employees: Accurate, on-time salaries with transparent breakdown of deductions
Finance teams: Clean, auditable payroll data for financial reporting
Compliance/Regulatory bodies: Timely, accurate filings and documentation

Recruitment and Onboarding Management

The feature sets as per the module include

Job posting: Create and publish job openings across multiple channels
Application management: Track all applications and resumes in one place
Candidate screening: Shortlist candidates, schedule interviews, share feedback
Interview management: Conduct interviews, score candidates, generate interview notes
Offer management: Create offer letters, track acceptance/rejection, manage counter-offers
Document collection: Collect required documents (ID proof, educational certificates, etc.)
Background checks: Integration with background verification providers
Onboarding workflow: Structured tasks and checklists for new hires (IT setup, training, orientation, paperwork)
Onboarding communication: Automated emails to new hires before joining, on Day 1, and throughout their first weeks

It provides the following benefits –

Streamlines hiring: Structured pipeline, clear progress tracking, faster decision-making
Improves candidate experience: Professional communication, clear status updates, smooth offer process
Reduces time-to-hire: Organized process eliminates delays
Enhances onboarding: Structured tasks ensure nothing is forgotten. New hires feel welcomed and prepared
Protects hiring investment: Good onboarding directly improves retention, protecting the investment in recruiting and hiring

Who will benefit?

HR & Talent Acquisition: Structured pipeline, easy collaboration with hiring managers, faster hiring
Hiring managers: Clear visibility into candidate status, easy scheduling of interviews, reduced email clutter
New employees: Professional, organized joining experience that builds confidence and engagement from Day 1
Organization: Faster hiring, better new-hire retention, reduced recruitment costs

Performance Management System (PMS)

It offers you a structured system for setting goals, providing feedback, and evaluating performance of the employees.

It includes the following elements –

Goal setting: Employees and managers set individual goals aligned with organizational objectives
Competency framework: Define competencies and behavioral expectations for different roles
Check-ins and feedback: Regular one-on-one conversations documented in the system
Performance appraisals: Periodic formal appraisals with ratings and calibration
360-degree feedback: Input from managers, peers, and direct reports for comprehensive perspective
Development planning: Identify skill gaps and create personalized development plans
Performance history: Complete record of goals, feedback, and ratings over time
Integration with compensation: Link appraisal outcomes to promotions, increments, and bonus decisions

The benefits offered by the module include

Aligns employees with organizational goals: Clear goals ensure efforts are coordinated
Encourages regular feedback: Structured check-ins improve performance and engagement
Creates transparency: Employees understand expectations and how they're being evaluated
Supports objective decision-making: Performance data informs decisions on promotions, increases, and role changes
Identifies high performers: Clear data helps organizations identify and retain top talent
Supports development: Performance conversations uncover skill gaps and trigger development opportunities

Who will benefit?

HR: Standardized appraisal process, documented performance history, data for succession planning
Managers: Clear tools for setting expectations, providing feedback, and making compensation decisions
Employees: Understanding of expectations, regular feedback on performance, visibility into growth opportunities
Organization: Better alignment between individual efforts and business goals, improved performance, better retention of top performers.

Learning & Development (L&D) Management

These HRMS features include the following elements –

Training calendar: Schedule training programs across the organization
Training nominations: Managers nominate employees for training; employees self-nominate
E-learning platform: Deliver online courses with progress tracking
Learning paths: Structured sequences of courses for specific roles or skills
Compliance training: Mandatory training (POSH, safety, security, anti-corruption) with completion tracking
Certifications: Track professional certifications and expiration dates
Training effectiveness: Feedback surveys and impact assessments after training
Skills assessment: Identify skill gaps and match training to gaps
Learning records: Complete training history for each employee

The benefits offered by the module include

Supports continuous learning: Employees access training resources to stay current and develop new skills
Improves retention: Employees see a career path and investment in their development, increasing loyalty
Builds internal talent: Development programs create a pipeline of internal candidates for advanced roles
Ensures compliance: Mandatory training is tracked, ensuring regulatory compliance
Measures impact: Organizations track whether training actually changes behavior and performance

Who will benefit?

Employees: Clear access to learning opportunities, visible career development paths, skills to advance
HR & L&D teams: Systematic tracking of training, ability to measure ROI, data to inform future L&D strategy
Managers: Visibility into team skills, ability to plan development, tools to recognize and develop talent
Organization: More skilled workforce, better retention of high performers, reduced dependency on external hiring for specialized roles

Workflow Automation & Approval Management

The feature set offers you the following services –

Leave requests: Employees submit leave requests; managers receive notifications and approve
Attendance corrections: Employees request corrections to attendance records; managers approve
Expense/reimbursement: Employees submit expense claims; managers and finance review and approve
Policy approvals: Documents requiring signature (confidentiality agreements, offer letters, etc.) route for approval
Custom workflows: Organizations define their own approval workflows for department-specific needs
SLAs and escalations: Define how quickly approvals should happen and automatically escalate if missed
Audit trail: Complete history of who approved what and when

The benefits offered by the module are

Speeds decision-making: Requests are routed instantly to appropriate approvers with clear notifications
Creates visibility: Approvers see all pending approvals in one dashboard
Maintains accountability: Complete audit trail documents all approvals and decisions
Enforces consistency: Policy-based workflows ensure similar requests are handled similarly
Reduces bottlenecks: Automatic escalation ensures approvals don't stall

Who will benefit?

Employees: Faster approvals, clear status tracking, reduced delays in getting requests processed
Approvers/Managers: Central dashboard to review requests, easy tracking, less scattered communication
HR: Reduced follow-up needed, clear visibility into approval status, complete documentation for auditss

HR Analytics & Reporting

Here are the features that you stand to gain with the HR analytics module in your HRMS tool –

Headcount analytics: Headcount trends, growth rate, turnover rate by department/location
Turnover analysis: Which roles/departments have high turnover? Why are people leaving?
Attendance analytics: Absenteeism trends, patterns, departments with high absence
Recruitment metrics: Time-to-hire, cost-per-hire, quality of hire, source effectiveness
Diversity metrics: Gender, age, role distribution to track diversity and inclusion progress
Compensation analysis: Salary distribution, pay equity across gender/location, compensation trends
Training effectiveness: Training completion rates, impact on performance, ROI of training programs
Performance insights: Performance rating distribution, high performer identification, succession pipeline
Custom reports: Organizations define their own key metrics based on strategic priorities

Here are a few benefits that you stand to gain with the module –

Transforms data into insights: Dashboard visualizations make complex data understandable
Enables proactive HR: Instead of reacting to problems, HR can anticipate and prevent them
Supports strategic conversations: HR leaders can discuss workforce strategy with CFO and CEO in terms of business impact
Measures program effectiveness: Organizations know which initiatives work and where to invest L&D and engagement budgets

Who will benefit?

HR & People leaders: Comprehensive view of workforce health, data to justify strategy, ability to predict and prevent problems
Business leaders & CFO: Clear metrics showing how people strategy supports business objectives
Managers: Insight into their team's performance, development needs, and engagement compared to organizational benchmarks
Organization: Better workforce decisions, optimized HR investments, strategic alignment between business and people strategy

Integration, Security, and Scalability

You can get access to the following features as part of the module –

Accounting/ERP software (for financial data reconciliation)
Payroll providers (for specialized payroll processing)
Time-tracking systems (for attendance data)
Collaboration tools (Slack, Teams, email)
E-signature platforms (for document approvals)
Background check providers (for recruitment)
Custom APIs for data exchange with legacy systems

You can have access to following benefits through the module –

Reduces manual work: Data flows automatically between systems without human intervention
Protects the organization: Employee data is secure, compliance obligations are met
Future-proofs your investment: The system supports growth, acquisitions, and geographic expansion without costly migration

Who will benefit?

IT & Security teams: Easier governance, fewer vulnerabilities, clear audit trails
Finance teams: Automatic payroll-to-general-ledger reconciliation, reduced manual data entry
HR teams: Confidence that data is secure and the system will support future growth
Entire organization: A system that's secure, reliable, and ready to support the business wherever it goes

How the Right HRMS Features Support Long-Term Business Growth?

Selecting the right HRMS software can help you and your business build a sustainable business. It helps in enhancing productivity and strategic contribution of your employees. This transformation elevates HR from a support function to a strategic partner. Organizations with strategic HR functions outperform competitors in growth, profitability, and innovation. It can also go a long way in improving employee retention and enhance the retention rates by up to 25 to 40%. It can also help improve the customer relationships. Another advantage that you stand to gain would include ensuring compliance and reduction of risk. In essence, the capable HRMS software solutions can help you build a data driven strategic HR planning.

Conclusion

Selecting an HRMS platform is one of the most consequential decisions an HR leader makes. When you evaluate HRMS software features through the lens of this 10-point checklist, you will end up with the best choice for your specific business.

Choose wisely. Invest in features that matter. Watch the returns compound over years of operation. IHits Technology is your one stop solution to help meet your specific business requirements.