Human Resource Management Software Development: Advantages, Features, Important Steps

Updated 25 May 2023

13 Min




Employee’s performance level is very important since HR managers need to know whether the staff feels comfortable, how they are efficient in doing their job and so on. In addition, HR managers have a lot of paperwork and it is very difficult to perform different tasks, keeping in mind too much information. That is why human resource management system (HRMS) is software that HR team needs and it can substantially improve their working process

This article will cover HRMS definition and objectives, its advantages, must-have features along with steps to build your custom HRMS solution, and how to find reliable web development services.

What Is HRMS?

HRMS or human resource management system makes it possible to automate human resource management process on both mid-sized companies and enterprises. A system consists of a set of modules that provides an HR department with the necessary tools to achieve strategic objectives of a company considering specific conditions. And, of course, HR software for small business will be different from HRM system for a mid-sized or large business. Anyway, such solutions simplify HR’s everyday tasks, including:

  • Recruitment and onboarding
  • Policy Setting and adherence
  • Employee engagement and training
  • Performance appraisal and succession planning
  • Leave and attendance policy
  • Exit process management
  • Talent retention, etc.

When your business needs HR software: the right strategy to build one. Read HR technology strategy: 4 effective ways to draft one for your company

HR management software is designed to manage staff, but such systems have much wider functionality than automated personnel recruitment systems. HRMS allows HR managers to work not only with quantitative indicators but also with qualitative indicators of personnel. The main goal of employee management software is to help managers retain valuable specialists at a company.

HRM system presents an automated complex system of staff management. In comparison with conventional systems of personnel accounting automation and payroll management, HRMS offer much more features. Apart from accounting (personnel accounting, staffing table, document flow, leave management and time tracking, pension, and military accounting, etc.) and settlement (salary, tax payments, allowances and deductions, and so on) modules that process figures and other financial data, such systems also include modules to evaluate the performance level of employees.

When you need to use HRM systems

HR management system is one of the most crucial corporate software that is used in various companies of different scale. The necessity of HRMS integration is determined by its capabilities of solving the following issues:

  • Cost management. Labor costs are almost the largest cost item. And HRM systems are used for planning and optimization of costs.
  • Efficient management of business processes. HRMS solutions make it possible to handle many HR business processes like personnel solutions, keeping records about employees, payrolling, development of motivation schemes, etc. Also, HR managers give employees direct access to the required information, and it increases efficiency.
  • Legal compliance. It means compliance of legal items that regulate relationships employee and employer. HRMS allows users to settle complicated issues, implement flexible payrolling schemes and personnel document flow.
  • Human capital improvement. Companies need to focus on employees career and skill growth, developing incentive programs and motivational schemes.

In fact, a custom human resource management software is a must-have software in your business for employees management, their development in accordance with strategies and values of your company, and their engagement in corporate culture.

Advantages of Human Resource Management System

In fact, we have already reviewed the main strong sides of custom HRM systems and why you need one. But let’s list all the benefits of HR software in detail.

features of human resource information system

Advantages of HRM system

Information centralization HR software solutions allow employees to have their profiles where they have assigned tasks and the profile contains all important information about an employee. Employees can update all the information by themselves, and it saves the time of HR managers.

High-quality recruiting HRMS help managers draw up vacancy announcements and post them on job platforms. Also, managers can select specific candidates who meet the requirements of a certain vacancy. And managers may also keep data about skilled candidates even if you don’t have a job position for them right now to contact them later.

A single multipurpose solution One HRM system has everything needed for convenient work with human resources. HR managers don’t need to have a bunch of spreadsheets and other docs with different information. HRMS helps monitor progress, assign tasks, make accounting procedures, and so on, and everything can be performed in one web-based HR software or mobile system.

Efficient collaboration HRM systems offer users communication panel where they can leave their comments, share ideas, check recent updates, and so on. Also, HRM systems work as a database of useful material and all team members (or limited number) can get access to it from any point of the world. Also, users may exchange files in HRMS.

Progress monitoring HR managers know like nobody else that employee should be motivated enough to work efficiently. Otherwise, an employee won’t see a real goal to achieve and why they should work at your company further. That is why human resource management solutions help monitor the progress of each employee, develop special programs to evaluate the quality of work, and reward hard-working employees. If the performance level of specific employee is decreasing, HRM system may help HR managers understand how to fix the situation and why it happened.

Payroll handling Expenses management is one of the top advantages of HRM system, HR managers along with accounting managers may estimate payrolls, taxes, sick leaves and vacations. Thus, all financial information will be available only for internal use and no third-party providers will participate.

The list of HRMS benefits can be extended, but the real advantage lies only in a custom solution. It means if you create your own HRMS for your company and your needs, a custom solution will help you succeed to the fullest in the collaboration with your employees.

Out-Of-The-Box or a Custom Solution: What to Choose?

When deciding to implement HRMS in your processes, you will have to make a choice: buy a ready-made solution or develop a custom one. Both options have their features, which are worth considering.

Out-of-the-box software


  • Lower cost. Your initial investment in purchasing an off-the-shelf solution will be lower than if you develop your own.
  • Faster implementation. The ready-made product can be implemented in your work processes faster; you do not have to wait until the software is created.
  • Training. Many companies selling HRMS provide training services for your employees.


  • Dependence on the vendor. The data transfer may be difficult if unforeseen circumstances, such as the vendor firm stopping working or you want to change the product.
  • Flexibility and customization issues. Unlike custom systems that are fine-tuned to your company's needs and specifics, an off-the-shelf solution provides a narrower customization field.**

Custom HRMS


  • Long-term cost benefit. In the long run, a custom solution may become a cheaper option. You pay for the development, and then you don't need to pay for licensing, which is required when you choose out-of-the-box software.
  • Fulfilled expectations. Your custom HR software will perform everything you need, and if some updates are required - you can always contact your development company which created the initial product.
  • Increased productivity. You will get more efficient productivity since the HRM system created for your business will perform tasks necessary only for your business.
  • Enhanced teamwork. With custom features, you can make your business more competitive since you get your employees what they want, and they will be motivated enough. You will have more advantages over competitors who use out-of-the-box software with limited functionality.


  • Development time. With a custom solution, you will need to wait a while before it is ready, and you can implement it in your business processes.
  • Vendor searching. You may find it difficult to find a professional to create a good HRMS for you. In that case, you might want to consider outsourced software providers who have a lot of talent on their team.

Thus, a custom solution may be one step ahead for many businesses. However, if you want to create your system to sell it as SaaS, you should consider the points that make it valuable for your customers. So let’s talk about must-have human resource management software features.

HRMS Software Essential Features

A custom HRM system should have the following MVP features:

benefits of human resource management system

Basic features for HRMS

Recruitment and hiring By automating hiring processes, they become much less time-consuming. In addition, the system can automatically select or screen applicants based on predefined criteria, which will significantly increase the efficiency of HR.

Employee Portal HRMS allows it to organize data such as positions, employee records, starting working dates, salaries, insurance plans with banking and tax details, paid time off options, etc. This helps to communicate and manage all data more effectively.

Payroll Payrolling plays a vital role in the working process, and it is very convenient when this time-consuming and complex work can be done in one software. For example, the HRM system can calculate staffing tables, tax payments, salaries, paid time off, and sick leaves. So this feature is the one that your software should have.

Note: By the way, Cleveroad specialists have added this feature to a Starter pack our Android developers use. Starter pack is a kit of frequently used features that can be integrated faster. That is why the development time of your HRM system may be reduced substantially. For example, now we spend 80 hours on the integration of this feature into Android app instead of 120 hours as before.

Time tracking When specific tasks are assigned, it is crucial to monitor how much time it takes for an employee to complete the job. Also, time tracking is essential to the performance review to understand how good specialists are at implementing set goals. In addition, a time tracking feature is required to monitor sick leaves and leaves, paid time off, etc.

Education management This feature is crucial since the HR department should be interested in the self-development of employees. Moreover, to retain skilled specialists, it is necessary to allow them to learn something new permanently. Thus, HR managers need to know what meetups and conferences will be held soon to let employees participate and learn new skills.

Scheduling It is necessary since HR managers can schedule attendance or shifts, and time will be considered more wisely. For example, scheduling performance reviews in the integrated human resource management system will help employees and HR managers organize their work better.

Data management and analysis One of the critical tasks of an HR person is to make decisions based on data analysis. With HRMS, these processes can be fully automated. So, the system will collect and analyze such data as:

  • Monitoring the mood of employees
  • MIS reports
  • Electronic documents
  • Employee progress
  • Performance data, etc.

Push notifications Everything is evident here. Notifications about changes, meetings, and reminders will pop up on a mobile device or PC screen.

These HRMS features are basic. So if your business requires additional human resource monitoring features, consider them during HRMS implementation. And also, you should think out the development process of your HRMS to ensure you will indeed get what you need. The next section is about it.

Steps to Consider When You Create HRMS

Keep in mind that these steps will help you arrange the development of your HRM system strictly according to your requirements.

designing hr systems

Steps to take into account when building HRMS

Determine a rough project idea

You should decide on what challenges your HRMS will solve and how it can improve the working process of the HR department and the whole company. You can hold a meeting with your HR department to understand their needs. Together with your team, you can brainstorm and discuss the project plan, and find out ideas from HR managers to build a high-quality product.

Estimate your budget and build a requirements analysis

In order not to fail, you should know clearly how much money you will need to build a custom HRM system. Even at the stage of the first contact with the software provider, you are given an approximate estimate of the cost of creating an HRMS. For example, at Cleveroad, we quickly provide customers with a rough estimate within a couple of days. Or you can use our mobile app cost calculator. Later, the software vendor can help you create an optimal list of features that will fit within your budget. And you can add more advanced ones later in the finished product.

Hire the right dedicated team

Once you have decided that you need an HRM system, it is worth moving on to find a technical partner who will help you dive deeper into the topic, define precise requirements for the project and create a custom solution for you that meets all your demands. You can read Clutch reviews about various companies, and check their portfolio to evaluate their experience, software developers' skills, and so on. The most preferable way is to outsource your development since outsourcing development companies offer more profitable options and have a lot of advantages with their dedicated teams. You can learn how to hire dedicated development team in our detailed guide.

Think out objectives and scope

Together with your team, you can write down what the scope of the project should be, what goals you want to achieve, what features a product should include, and so on. A professional software vendor can provide you with a comprehensive business analysis and advise you on essential features. Then, all these documents will be shared with designers and developers to give them a clear understanding of HRMS functional requirements.

Consider both mobile and web apps

Don’t forget that a custom HRMS should be built both in mobile and web versions. Why? The matter is that it allows HR specialists to get access to the software from anywhere, having only one mobile device. But at the office, using a web-based app is much more convenient. However, for a start, you can order the development of the HRMS web application only and then build a mobile app a bit later.

Security is important

Keep in mind that your HRM system should have high-level security. HRMS stores personal employees’ data, confidential company data, and other classified information, not for third parties. So security protocols and encryption methods should be applied during the development process. Also, access to software may be permitted only with a password, and even two-factor authentication, if necessary. It will help protect your HRM system from hacking.

Keeping up with these steps, you will surely succeed and use your custom HRMS for the benefit of the company.

Developing HRMS With Cleveroad

Cleveroad is in the IT market for 10+ years with successful business automation projects, including HR systems. We’ve built many mobile apps and websites for various niches and industries.

Cooperating with Cleveroad you will get:

  • Agile-oriented development team fluent in cutting-edge technologies
  • 120+ middle-to-senior and senior experts in business automation
  • AWS certified senior Solution Architects
  • Certified Business Analysts and Project Managers (CSPO, PSPO, PSM, IIBA, PMI)
  • A big variety of technologies to choose

Business Automation is one of our key industries that we are currently developing actively, and we practice a really customer-oriented approach with intent to provide maximum value to our customer’s business. We are open to negotiation of the best possible cooperation conditions. Also, we are conducting free focus groups inside the company for projects’ results analysis after reaching certain projects’ milestones. We involve our C-level into this activity, and provide co intereulting and consulting and recommendations to our customers as a result of these focus groups.

If you are interested, you may check out details about our successful projects in business automation, quite similar, and even more complex than HR systems, for example, Quality Management System (QMS). Furthermore, you can check out the concept of the HRM system our UI/UX designers have created. You can also visit our Dribbble profile and look at other concepts Cleveroad's team of designers has created. You can also visit our Dribbble profile and look at other images and concepts Cleveroad team of designers has drawn.

HRMS Cleveroad

HRM system concept by Cleveroad

Software development rates in Europe: check a full guide. Read our article about outsourcing to Eastern Europe

Summing up, let’s discuss once more why and when you need an HRM system. If you want to retain your specialists, improve working processes in your company, and optimize the workflow of HR managers, you need HRMS for sure. In fact, any business needs it. How your system will look and what features it will have - depends only on your specific requirements. Contact us to discover more information about our experience with HR systems - we have something to tell you in a more private conversation.

Optimize your workflow with HRMS

Cleveroad team can create a perfect solution that suits your business processes

Frequently Asked Questions
What is HRMS software?

HRMS or human resource management system makes it possible to automate human resource management process on both mid-sized companies and enterprises. A system consists of a set of modules that provides an HR department with the necessary tools to achieve strategic objectives of a company considering specific conditions.

What is HRM and its features?

HRM system presents an automated complex system of staff management. In comparison with conventional systems of personnel accounting automation and payroll management.

There are several vital features that must be in every HRM system:

  • Progress tracking
  • Time tracking
  • Recruiting tracking
  • Education management
  • Payroll
What are the benefits of HRM?
  • Information centralization
  • High-quality recruiting
  • A single multipurpose solution
  • Efficient collaboration
  • Progress monitoring
  • Payroll handling
How do you build a HR system?

These steps will help you arrange the development of your HRM system strictly according to your requirements.

  • Determine why you need one.
  • Build a project team and brainstorm.
  • Think out objectives and scope.
  • Consider both mobile and web app.
  • Envision your final result.
  • Draft your working processes.
  • Hire the right dedicated team.
  • Security is important.
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About author

Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics

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05.11.2020 at 09:34

Thanks for sharing the details of HRMS software.

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