What is an HCM System?

What is an hcm system?

An HCM system ( also called an HR system ) is a computer system that helps you digitize all processes within Human Capital Management. This saves you time and money by automating tasks that previously took a lot of time. By digitizing HR tasks, the following advantages are achieved:

Streamlined HR processes

An HR system automates and centralizes various HR processes, such as new employee onboarding, absence management, time off, performance evaluations, and more. By digitizing these tasks, the system reduces manual paperwork, eliminates duplication and increases overall efficiency, allowing HR staff to focus on strategic work.

Improved data management

HR systems offer a secure and centralized database for storing information about employees ( master data ), including personal information, employment history, skills, achievements, training and more. This ensures accurate and up-to-date data, reduces the risk of data loss or errors, and makes it easier to access information when needed. It also enables the HR staff to generate comprehensive reports and analyzes that make it easier to make informed decisions.

Improved employee self-service

Many HR systems include self-service portals or mobile apps that allow employees to access and manage their own information. Employees can update their personal information, request time off, sign up for welfare schemes, access training materials and communicate with HR staff directly through the system. It gives employees more independence, saves time for both employees and HR staff and creates transparency in the organisation.


HR systems help organizations comply with various laws, regulations and reporting requirements. They can generate reports and access forms, health and safety regulations and other legal obligations. By automating compliance processes, the system helps reduce the risk of fines, audits and legal problems.

Strategic decision-making

With the extensive data and analytics capabilities that HCM systems offer, organizations can gain valuable insights into their workforce. HR professionals can analyze trends, identify skill gaps, assess employee performance, monitor training needs, and track employee satisfaction and engagement. This insight makes it possible to make data-driven decisions in areas such as talent development, succession planning, performance management, training and development and overall HR strategy.

An HCM system can therefore have a number of positive effects in all parts of the organisation. First, the HCM system streamlines and automates administrative tasks, saving you time and reducing errors. Second, the system acts as a centralized platform for managing employee data, promoting effective communication, collaboration and data-driven decision-making. In addition, an HR system helps to ensure that laws and regulations are complied with and that HR processes are accurate, transparent and confidential.