Guide to Employee Management Software

What is an employee management system, and how can it support your HR department? From an employee's first day on the job - and even before - an employee management system can help support positive workplace experiences, strategic talent management, and efficient HR functions.

What Is Employee Management Software?

Employee management software generally combines HR data, resources, and tasks in one technology platform. HR managers can use employee management tools to simplify tasks like collecting and storing employee information, managing payroll, conducting performance reviews, onboarding new employees, and managing employee policies, communications, and data. Just as importantly, these tools can empower HR managers to automate and streamline routine HR tasks so they can focus on more strategic initiatives that help companies attract, engage, and retain competitive talent.

The right software for employee management can effectively shift the HR department from a cost center to a value-based solution. Compared with traditional methods of managing HR, a robust platform can save time, money, and resources by automating manual processes, reducing human error, and reducing administrative burden for your HR staff.

Key Employee Management Software Features

The key to realizing these benefits is choosing a system that makes it easier and more efficient to do what you already do. As you evaluate software options, consider the routine tasks you perform every day. For example, these may include onboarding, payroll management, performance reviews, feedback systems, leave management, timekeeping, and more.

Let's examine how some of the most common employee software management features can support your HR department.

Onboarding and Payroll Management

Onboarding is a critical experience for a new hire. A well-planned onboarding process should integrate new employees effectively with your company culture and help them feel like valuable members of their new team. Onboarding management tools walk new hires through the employee onboarding process step by step, from signing the correct forms and setting up their benefits to completing training requirements. The HR team can create task lists and set alerts to remind employees about upcoming tasks and alert managers when a task is completed. When handled strategically, your onboarding process can contribute to employee engagement and higher retention rates over time.

A payroll management system helps ensure that employees get their paychecks on time and supports various payroll and tax responsibilities. As part of an employee management software platform, the system helps HR professionals run payroll quickly and easily, manage tax withholdings, calculate wages, and facilitate tax services and compliance.

Timekeeping and Leave Management

Timekeeping tools keep track of employee hours, can make it easy for employees to clock in and out from the office or remotely, and simplify leave management. Most employee management solutions have built-in scheduling functionality, and many systems use location services to ensure that team members clock in and out at the right location.

Performance Review and Feedback Systems

Timely, constructive performance reviews can make the difference between engaged and disengaged team members. Research from Pew Research Center shows that employees want to hear from their managers and those who receive frequent feedback are more satisfied at work.¹

Today's employee management tools support the latest research on employee feedback with features like real-time feedback systems, 360-degree reviews, and built-in reminders. These tools help managers build better relationships with their teams by creating opportunities for conversations that help employees grow in their roles.

Employee Recognition Functions

Employee recognition programs work hand-in-hand with performance reviews by celebrating wins and rewarding achievements. Using software to manage employee recognition helps make the process consistent and sustainable, with built-in features designed to boost morale and motivation. Depending on your chosen platform, you may be able to leverage leaderboards and badges, employee forums, peer recognition tools, wellness incentives, and employee appreciation rewards.

Policy Communication and Compliance

One of the primary functions of HR is to ensure compliance with local, state, and federal employment laws and regulations. Employee management software can help simplify HR compliance by storing documents, maintaining employee records, tracking wages and hours worked, and streamlining reports. HR managers may also be able to use the system to communicate company policies efficiently, notify employees of changes or updates, and integrate policy and compliance training with the onboarding process.

Benefits of Using Software for Employee Management

Shifting from manual processes or outdated tools to today's powerful human resource software is a pivotal decision for HR professionals. Using software for employee management can improve efficiency, accuracy, and productivity across the entire HR department. The benefits can have far-reaching impacts on team members across the organization as well. From onboarding to exit interviews, employee management software helps HR managers improve workforce management and get more done in less time.

Streamline HR Processes

HR involves many meticulous tasks that must be completed accurately and on time. Employee management tools can streamline this process by automating routine tasks and reducing the time HR professionals spend on administrative work. By giving those hours back to HR staff members and freeing them to focus their attention on strategic initiatives, employee management software can add value and help you reach your talent goals.

Enhance Accuracy and Reduce Human Error

Manual data entry processes are prone to human error. A dropped digit, a skipped line, or a mistyped name can result in payroll discrepancies, compliance mistakes, and inaccurate employee records.

Using software for employee management and compliance tasks helps ensure accuracy and minimizes errors by automating key processes. With data capture capabilities, benefits administration tools, and real-time reports and data visualizations, employee management software makes HR management easier and faster for employees and HR professionals.

Improve Compliance With Company Policies

Your company policies are designed to ensure consistency and may improve policy compliance by facilitating policy distribution, communications, and resource availability to all team members.

A robust software solution is also critical when audit time rolls around. With all your essential data in the system, you can easily create an audit trail and generate compliance-related reports.

Boost Employee Engagement and Retention

Employee engagement and retention are the holy grail for HR departments. Engagement strategy is a critical focal point for every organization in a job environment where quit rates are rising and, according to Work Institute, 35% of turnover occurs within the first 5 years. Engaged employees are more productive, more likely to remain with the company, and more likely to embody your core values.

When choosing software for employee management, look for tools like feedback systems, recognition programs, learning and development platforms, and engagement monitoring functions. These features can help you keep your finger on the pulse of employee engagement. At the same time, you can use them to fine-tune strategies and policies that contribute to higher retention rates.

Types of Employee Management Software

Employee management software is a broad term that includes several different types of systems. Most solutions fall under one of three categories: HRIS, HCM, and HRMS. You may see these terms used interchangeably, but there are critical differences in what each type of employee management software solution is designed to do.

Here's what you should know.

Human Resources Information System (HRIS)

The primary function of a human resources information system (HRIS) is to store and manage employee information. You can use the system to automate tasks, centralize employee records, analyze data metrics, provide a self-service option for employees to view their information online, and facilitate other critical HR tasks. An HRIS is a foundational tool for saving time and money in the HR department.

Human Capital Management System (HCM)

Human capital management software (HCM) generally provides deeper functionalities than an HRIS. It serves as a comprehensive employee management tool that can oversee workforce needs and information from first interaction to retirement or transition. HCM software includes talent acquisition tools, onboarding resources, learning and development opportunities, performance management tools, and more.

Human Resources Management System (HRMS)

A human resources management system (HRMS) combines the elements of an HRIS and HCM system, delivering a comprehensive suite of software for employee management. Specific functions can be customized to automate HR processes, and reporting and analytics tools provide critical insights to support data-based decisions. On the employee side, team members can manage their personal information directly, and access can be tailored to an employee's needs based on predefined roles.

Workforce Management Software (WFM)

Workforce management software enables you to accurately track time, attendance, overtime, and scheduling in one place. These key data points can help you follow labor regulations and can accurately forecast workforce needs to avoid staffing shortages or unnecessary overtime. Use this solution to manage employee productivity, improve satisfaction, and reduce turnover.

Role of Software in an Employee Management System

HR professionals often straddle the line between back-office administration and frontline people strategy. The right software and systems can exponentially increase your ability to be successful in both areas. However, before researching your options, you must understand precisely what different platforms do. Employee management software tools support individual HR functions within a broader employee management system. When you know the differences and benefits of employee management systems and software, you can implement them strategically to move closer to your organizational and HR goals.

An employee management system aims to spearhead talent management for your organization. It helps you recruit and hire the right people, improve engagement and retention, implement employee initiatives, and manage HR functions like payroll, time and attendance, onboarding, and benefits administration.

Employee management software serves as a hub for HR functions and data. Software tools deliver valuable insights for HR staff, helping to identify inefficiencies and process gaps, streamline HR operations, automate tasks, and support effective collaboration and communication.

How To Select the Right Employee Management Solution

Before choosing an employee management solution, take a step back and evaluate your organizational needs. Look at how your HR system currently functions to identify process gaps, inflection points, and opportunities to improve efficiency. Talk to employees about their day-to-day workflows to determine where the needs are and what requirements a new system should have.

Once you have this information, you can begin to evaluate your options. As you do your research, consider the following:

• How well does this solution integrate with our current processes and systems?
• Which functions are critical, and which ones are value-add options?
• How does this solution compare to other options?
• What are the costs and benefits of this solution?
• How will this solution help us reach our overall organizational goals?
• Does the vendor provide implementation support and training?

Asking these questions will help you weed out employee management systems that can't meet your requirements. Once you finish the process, you will have a short list of options leading you to the best solution for your needs.

Empower Your Team With Employee Management Software

An employee management system is a powerful tool that can transform your HR department by improving efficiency, boosting productivity, and creating a strategic advantage. With careful research, you can find the right solution to meet your HR needs, support your workforce, and move you closer to your goals.

Paychex may have the right workforce management system for your business. Track time and attendance, increase productivity, and build standard and custom reports that work for your business size and goals. Looking for even more robust HR solutions? See how Paychex Flex^® offers an all-in-one HCM, PEO, and HR software to transform your growing business.

¹ “How Americans View Their Jobs.” Pew Research Center, Washington, D.C. (March 30, 2023) https://www.pewresearch.org/social-trends/2023/03/30/how-americans-view-their-jobs/