How to Select the Best HRMS: Process, Expert Advice, and Tools
Is your human resources team often bogged down with administrative tasks?
Monitoring hours, managing payroll, issuing and collecting new hire paperwork, tracking employee attendance, and more take up the bulk of their work hours, leaving little time to develop new strategies that drive better business outcomes.
That’s why many human resources teams look to a human resources management system (HRMS) to automate tedious administrative tasks.
What is an HRMS?
According to HR Payroll Systems, an HRMS “is a combination of systems and processes that connect human resources management and information technology through HR software.”
They go on to explain that “the automation of repetitive and time-consuming tasks associated with human resources management frees up some of the company’s most valuable employees and allows the focus to shift to culture, retention, and other highly impactful areas.”
Of course, not all HRMSs are created equally, and your organization’s specific needs should drive the option you choose.
Below, we offer tips, advice, and tools that will help you evaluate and select the perfect HRMS for your organization.
How to evaluate and select an HRMS
To select an HRMS, you should follow a standardized, strategic sourcing process. The seven steps listed below cover the essentials.
- Determine internal stakeholders
Before making any decisions, it’s important to identify your procurement team. You’ll likely want to include potential system users, human resources leadership, IT, finance, and possibly even your CEO.
- Define requirements
Now that you have your team assembled, you can begin defining your requirements. This should include the challenges you want your HRMS to help you overcome, as well as security requirements, financial considerations, and any other factors that are important to your organization.
It’s also a good idea to determine your evaluation method. Planning how you will score and compare vendors now will prevent misunderstandings as you move through the HRMS selection process.
- Consider hiring a consultant or brokerage firm
At this point, you’re ready to start soliciting proposals from potential vendors. But before you take the next step, you should consider hiring a consultant or brokerage firm to help you manage the rest of the procurement process.
HRMS is powerful technology, which means it’s difficult and time-consuming to properly evaluate your options. Consultants and brokerage firms have experience navigating this complex ecosystem, and they can help you more easily find the solution that best addresses your needs.
- Issue an RFP
Next, you’ll issue an RFP. This document will help you solicit proposals that identify each vendor’s strengths and weaknesses. (Here are tips to help you write an effective RFP.)
While many organizations rely on traditional RFP management processes that include manual tools like Excel and Outlook, you should consider using RFP software to streamline the process.
The right solution can make it easier to collaborate with your team when creating the RFP, monitor vendor progress when collecting responses, and properly evaluate each HRMS.
- Evaluate and shortlist vendors
Once vendors respond to your RFP, it’s time to evaluate the proposals using the scoring method you determined in Step 2.
Remember to compare vendors side by side, section by section, and question by question in addition to comparing the overall scores. It’s important to see how each HRMS stacks up as a whole, as well as where each vendor’s individual strengths and weaknesses are.
With this information, you can create a shortlist — a list of about three vendors you wish to continue evaluating.
- Demo and negotiate
Now that you have a shortlist, it’s time to get into the nitty-gritty details.
Ask each vendor to demo their HRMS, so you can see how it actually works. You want to ensure it does what vendors say it does and get a feel for its usability. (Will it require hours of expensive training, or is it intuitive enough that new users can pick it up quickly?)
During this stage, you’ll also start negotiating with your vendors. Is there an HRMS you like best but are thinking about passing on because of the price? Let the vendor know. Chances are, they’ll be willing to work with you on payment terms considering how much time they’ve invested in the sales process.
- Select and announce
Finally, it’s time to select your vendor. Let them know that you’re moving forward, get your contract signed, and start implementing your organization’s new HRMS.
Don’t forget to let the other vendors on your shortlist know they didn’t make the cut. It’s always nice to offer feedback to these vendors and even potentially participate in a win-loss interview.
After all, they did invest a lot of time in your organization only to lose the deal. And hey, you never know what the future might bring. Your feedback now could lead to them making tweaks that open the door for a successful vendor-client relationship in the future.
What experts say about HRMS selection
All right, so now you know the process you should employ to find the right HRMS. To help you successfully implement that process, we’ve compiled HRMS selection advice from some of the most well-respected experts in human resources.
Consider the needs of the entire organization, not just human resources
“HR professionals should look beyond the needs of the HR department and consider the strategic plans of the organization. An organization on the precipice of an aggressive growth period will have different needs than one that is ‘right sizing’ or condensing operations. Taking these strategic plans into consideration will help ensure that the system selected will be the right choice for the organization beyond the short term.”
Talk to your peers
“Find out what tools your colleagues are using, what they recommend, and what problems they have had with technology and the vendors that provide it. Use that feedback to make a more informed decision for your organization.”
Keep data security top of mind
“Look for features that will reinforce your security (and therefore the security of your data) such as role-based access control, secure mobile login, and regular back up of data. What’s more, look for vendor apps that allow you to lock, delete or otherwise control any company information that might end up on an employee’s personal device — very useful when they leave their smartphone on the train!”
Use this as an opportunity to transform your current processes
“Few moments are as opportune to revisit business processes as your implementation of a human resource management system (HRMS). Unfortunately, many companies miss the chance to tap into the exponential power this chance can bring. In fact, one of the greatest mistakes that organizations make is to just automate a bad or inefficient process without any regard to the long-term effect.”
Want advice on the procurement process in general? Check out these suggestions from 11 procurement experts.
HRMS selection tools
Now that you know exactly how to select the right HRMS, it’s time to get to work. The tools listed below will help you more quickly and easily navigate the HRMS procurement process.
HRIS/HRMS comparison tool
CompareHRIS.com put together this survey tool to help you identify which HRMS or HRIS (human resources information system, a type of HRMS) is right for you, based on your answers to key questions.
HRMS product comparison
HRMS World created this comparison tool that allows you to select multiple HRMS tools and download a side-by-side comparison.
Software review sites
As with any technology purchase, you should read user reviews before making your HRMS selection. Here are a couple of the best review sites:
Creating an RFP for HRMS vendors from scratch is a lot of work. You can use these templates to get a head-start. (Just remember to tailor the final document to meet your unique needs.)
How RFP360 can help
RFP360 — the only full-circle RFP management solution on the market today — empowers strategic RFP management that can help you identify the perfect HRMS for your organization.
“If you already know who you’re going to select, RFP360 probably isn’t the tool for you. But if you actually want to make an informed and objective decision, you need something to help you analyze vendors from a quantitative perspective,” said Kelly Ellis, director of administration and operational excellence at Piper Jordan. “RFP360 is the right choice.”
Learn more about how RFP360 can help your organization select the right HRMS.