Importance of HRMS in Startup Companies

A Human Resource Management System (HRMS) is a type of HR software that allows management to perform several HR functions with the use of Information Technology (IT). HRMS software aims at improving the efficiency and productivity of the business by automating repetitive and manual tasks enabling the HR team to focus on strategic and critical business tasks.

HRMS software covers all the elements of the Human Resource Information System (HRIS) including the capabilities of the Human Capital management system. The popular and main characteristics of HRMS are Time and Labor Management (TLM) and Payroll.

A startup company consist of a business idea of a person or a
small group which can further be developed into a successful business with the
right boost to the functional and financial aspects along with a dedicated

Startups function with less staff and a single manager to look after the entire operations and control all the functions. Other than managing employees, managers should also take care of their functioning, attendance management, and payroll operations which can be time-consuming and difficult to manage alone. Therefore, open HRMS software can be the right tool to manage HR operations in a hassle-free manner.

Significance of the Human Resource Management System

Human Resource Management System (HRMS) can be customized according
to the employee and business needs of the organization. The significance of
HRMS in startups is as follows:

  • Employee commitment 

One of the important and main significances of HRMS is employee commitment. When designed properly it helps organizations to recruit efficiently, provide the right and proper kind of training and compensation to the new employees. Its main focus is to increase employee performance, satisfaction, and overall productivity.

  • Organizational Effectiveness 

A good HRMS brings consistency in organizations human resource
practices and helps in building and strengthening relations by improving
employee knowledge and skills with the right training. It automates repetitive
and manual tasks thereby improving the overall efficiency of the organization.

  •  Occupational Safety 

Managers need to focus on improving their Human Resource Management system because occupational fatalities and injuries can have a negative impact on employees morale. Therefore a good HRMS system helps organizations to improve their occupational safety.

  •  Customer Service 

Businesses can build their brand image and reputation with great
customer service. Human Resource Management system aims at customer service of
companies thereby improving the working environment and use effective delivery
modules with increased support.

  • Empowering Employees 

Empowered employees always feel more engaged and connected towards their jobs and the importance of HRMS lies in giving them decision-making power in times of conflicts and resolve them efficiently. The process of empowering employees require training and trusting them and making them accountable.

Benefits of using HRMS in startups 

HRMS software provides startups with ample benefits of employee
management and operations. The following are some of the benefits of an
effective HRMS in startup Businesses:

  •  It helps in employee
    training aspects as the courses and modules can be designed and monitored for
    new employees along with the existing employees.
  •  It provides organizations
    with the benefit of well-designed appraisal, incentives and rewards to be
    operational and helps them function with a proper structure and standardize
    company-related operations.
  •  It efficiently calculates
    the attendance, payroll, leave management and other HR-related operations and
    automate them thereby reducing the management stress of doing these tasks
  •  Provides organizations
    with efficient employee onboarding and offboarding tools.
  •  HRMS software can be
    directly integrated with the company’s website for posting online
    advertisements about job vacancies and job postings directly. It also enables
    companies to filter online resumes based on experience, skills and required
    employee qualities.
  •  Enables transparent
    communication between executives and senior officials by providing efficient
    structure and level of operations.
  •  Helps in financial
    aspects of the organization such as cost-effective module of employee management
    in start-up businesses and affordability of platforms that will be beneficial
    for the organization in the long run.
  •  With various automated
    options it will ease the tension of the HR department in employee management
    operations with depicted tools to perform these operations efficiently.

Therefore, HRMS software helps businesses to automate various HR
operations and eases the process of employee management.


Human Resource Management System (HRMS) is a new pattern of
automation in the HR industry and benefits startups to automate their
management operations because of its cost-effective and easy to use nature.
This system not only improves business efficiency but also lays a strong
foundation for organizational change to enhance productivity.


  • 23 March, 2021
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