5 Ways HRMS Can Increase Employee Retention

A high turn-over rate is not only a waste of time, but also carries exorbitant financial costs. According to the Society of Human Resource Management, the quitting of an employee and the hiring of a new one can cost from 90 to 200% of the employee’s annual income. According to another estimate, it can cost from 30 to 400% of the leaving employee’s annual income, depending on whether the employee was a beginner or an experienced professional.

The need to increase employee retention is clear. Human resource management systems can help improve retention rates in several ways:

  • They track employee performance, and enable rewards and recognition
  • Many HRMS systems contain a performance appraisal or evaluation module. With a standardized method to evaluate employee performance, management can keep track of employee performance. Thus, underperforming employees can be enrolled in training programs or coached further, and employees who are exceeding expectations can be given raises and promotions. Being recognized for their work and effort will increase their dedication and loyalty to the company, making them more likely to continue working there for a longer time.

  • They convey objectives and goals to employees
  • Having a clear idea of what one needs to do in a certain position is vital in improving performance. HR systems usually qualify the objectives and Key Performance Indicators for specific roles. Keeping in view these goals and KPIs, employees will be better aware of what is expected of them. They may even be able to track completed and pending goals. With clearly-defined objectives, employees will be able to stay focused and will be less likely to quit from the frustration of not being conscious of their responsibilities.

  • They facilitate professional growth
  • One of the most common reasons why employees leave a company is not having enough development opportunities. However, HRMS systems help the management see the skills and shortcomings of employees, enabling the identification of training needs. Better training and development will open up more opportunities to move up the professional ladder, reducing the chances of employee disaffection, and increasing the chances of retention.

  • They allow employees to communicate with the management
  • HR systems allow employees to communicate with the Human Resources department and management with ease. Employees may be reluctant to communicate in person and may be more comfortable submitting complaints in writing. HRMS enables employees to air their grievances, make suggestions, and provide feedback, making them feel heard and enhancing their employee experience. Having a better experience in the company will make it more likely for them to remain.

  • They help companies understand why employees quit
  • Many companies conduct exit interviews when employees leave. HR systems can optimize this process through electronic exit forms. Leaving employees may be reluctant in giving honest opinions in a face-to-face interview and may be more comfortable and honest when providing feedback through online forms. Accurate feedback is important because it can help companies work on any recurring issues that lead to resignation of employees, thus increasing their retention in the long term.

In conclusion, with a suitable HRMS solution, companies can encourage employee engagement and satisfaction, and increase their retention. Employees being arguably the most important assets of a business, their satisfaction and lower turnover rates will predictably fare well for the business

Benefits of the Attendance and Leave Module in HRMS Systems

Paper-based attendance and leave tracking is outdated and should be left behind in the 20th century where it belongs. In the 21st century, modern businesses should adopt electronic systems to help them keep account of employee attendance, arrival and exit times, and leaves. The attendance and leave module in HR management systems has a number of advantages over traditional paper-based records.

  • Keeps track of leaves and remaining holidays
  • The automated attendance and leave management system lets employees and employers keep track of expended and remaining leaves, resulting in better decision-making regarding leaves in the future. It helps employees prioritize and request leaves when they need them most, and it helps management decide whether the applicant has any leaves remaining and if the request should be approved.

  • Enables easy application submission and approval/decline
  • HRMS software eradicates the need for paper-based applications for leaves. The submission, approval, and decline process for paper applications is tedious and lengthy, with the request travelling from human resources to lower management, and from lower management to upper management, and then back again with a decision to HR and then finally to the employee. With HR software, employees can submit their request to the management, who can then approve or decline it, after which the decision passes on to the applicant, all through one simple system.

  • Makes payroll calculation easy
  • Calculating payrolls manually is exhausting and prone to human error, as employees have different pay scales and have worked for a varying number of hours. Because HRMS tracks the time that an employee has entered and exited work, and the days she has taken off, it can automatically calculate her salary for the specified time period.

  • Helps draw conclusions about employee punctuality
  • Ascertaining employee punctuality is important in learning about their performance and dedication to their work. Punctual and committed employees are often rewarded with promotions and pay raises in many organizations. HR systems, by tracking the time and attendance of employees, help you make inferences about the punctuality and devotion of an employee.

  • Eliminates the chance of alterations
  • With manual time-logging, the chances of amendment in records are high. On the other hand, with HR systems that are often connected to biometric systems, the chances of manipulation of time logs are extremely low. Accuracy in time and leave tracking would give you more accurate payrolls and conclusions about employee punctuality and performance.

Thus, the attendance and leave module in HRMS systems can help your company keep track of employee leaves and simplify the leave application process, make accurate payroll calculations and better decisions about employee performance, and keep authentic records. While HRMS has a multitude of useful features, even the attendance and leave module alone, in my opinion, necessitates its implementation in your company.

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