Feature image of Employee management software

A Comprehensive Guide On Employee Management System

Employee management is an integral part of any organization and is important to its growth as well. It includes everything related to an employee, from their recruitment and onboarding to their wellness in the company. 

In addition, there are many other processes, and the HR department is the one who handles all of them. However, these tasks take a lot of work to deal with. That’s why employee management systems are becoming popular among businesses nowadays. 

This system helps automate tasks that an HR department has to do. In today’s blog, you will learn everything about it, its benefits, features, factors to consider, and many more. So, let’s get started.

What Is an Employee Management System?

This is a comprehensive piece of software that eases the management of employees in any organization. It automates all the HR-related tasks to make the operations less time taking, more accurate and straightforward. 

These systems are designed to help the HR department with all the tasks related to employees, from hiring and onboarding to payroll management and performance evaluation. 

Moreover, to automate most of its tasks, it keeps the personal and work data of employees saved in the servers. This data is saved securely and helps the Human resource to manage employees and their wellness. 

Additionally, there are many direct and indirect benefits of having an employee management software in place, including increased employee engagement, productivity and better meeting organizational goals.

What are the Benefits of Implementing an Employee Management System?

Now that you understand what an employee management system is, let’s cover some of its benefits.

1) Secured and Centralized Data

In an organization, a lot of data needs to be secured. Employee data is also among the data an organization must keep totally secure. However, the traditional method doesn’t provide enhanced data security. That’s why an employee management system works better: to secure the data and centralize it in one place. Hence, it makes employee data management easy while keeping it secure and out of reach by any third party. 

2) Easy and Streamlined HR Processes

The core elements of an employee management system are HR automation tools. These HR features make the processes streamlined and almost effortless with the help of data and automation. For example, if the department has to announce the appraisals, then it takes a lot of manual work to evaluate the employees. But, with advanced employee management, the same can be done without any effort. The system will give you an overview of every employee’s performance and announce unbiased performance appraisals. 

3) Better Employee Engagement and Productivity

Being data-driven in today’s world is important, and it can also be seen in enhancing the engagement of an organization’s workforce. With an employee management system, you can understand each and every employee in your organization and how they are progressing. It lets you look at the factors or potential problems hindering the employee from giving 100% to the organization. So, with these data-backed insights, you can make changes and improvements in your organization to Improve Employee productivity and Job satisfaction.

4) Valuable Insights Available

The best thing about an employee management system is that you can get many insights about your workforce simultaneously. You can look at anything about your employees from the software dashboard, like who’s present, absent, on leave, and many more. It makes work management easier for managers and retains the flawlessness of work progress.

5) Advanced Reporting

It’s important that the top management of any organization gets all the updates from their employees. But doing it manually can be time-consuming, so how can you make it quick? If your answer is an employee management system, then you are right. It allows for advanced reporting where you can get data-driven reports that top management can access with a few clicks. These reports, while being simple and visually centric, also remain comprehensive.

What are the Features of the Employee Management Software? 

Global Employee manager systems have a lot of features that ultimately allow flawless HR operation. However, these features may vary depending on the company from which you source your HRMS tool and your chosen package. However, there are some features that are crucial in employee management. So let’s look at these features below:

1) Employee Application Tracking

Recruitment is a costly and hectic process that every organization has to perform. Every time a job application is put live, it attracts a lot of applicants, and it becomes a complex task to find the most compatible candidate. However, this process can be streamlined with an applicant tracking feature in an employee management system. An ATS helps take all the applications for the job and sort them with the help of the applicants’ responses to a few questions. Now, the resumes of these applicants are parsed through resume parsing, and all the important data from resumes is saved in the database. Lastly, the hiring managers can access the individual’s data with a few clicks and compare them to find the most compatible candidate. Moreover, ATS helps screen candidates and onboard them when the company selects them. 

2) Time & Attendance Management

Time and attendance management is the core feature of any employing management software. It tracks the employees’ status when they made their attendance and how much time they worked for. Moreover, it also integrates with the payroll system to precisely calculate the salaries of employees based on how many days they worked in a month. 

3) Absence & Leave Management

This feature allows the HR and managers to look at who’s absent and on leave. On the time to make attendance over the absence and leave data is synced so the managers can know who is not at work today. It helps the managers to reschedule work accordingly. Moreover, the Online leave management system also allows HR and managers to look at who has applied for a leave so that they can approve or disapprove the leave accordingly. 

4) Employee Database Management

The employee record management system is an integral part of the system. This system database saves all the crucial information about employees, including personal information and work history. For instance, it saves all the payments made against an employee, such as salaries and salary slips. So, if an employee needs his or her salary slips, he/she can get them through the employee management system. 

5) Employee Self-Service

This is by far the most important feature of HR software. This single feature allows all employees to complete their HR-relatedHR-related tasks with minimal effort. It includes making attendance, applying for leave, accessing leave balance, etc. For instance, if an employee works from home, he can put his attendance through the self-service feature, and the data will be synced with the servers installed in the office. Similarly, if an employee needs a leave, she can go to the leave portal and apply for the leave with a few clicks rather than writing a leave application. She can also look at her leave history and balance in the left portal. 

Factors to Consider While Choosing Employee Planning Software?

Now, let’s keep the features aside and consider the factors when choosing an employee management system.

1) Ease to Use

First thing first is the ease of use. Employee management solutions are unlike core business software like Excel, Tableau, etc. So, their UI can be different. Hence, the HR team can’t get used to an employee management system before its installation. Hence, the system you choose must have an easy-to-use UI and feature that doesn’t require extensive training from the HR team and employees.

2) Integrations

The second factor to consider is how many integration options you get. Integration options are important for seamless data transfer to and from other business software. For example, integration with LinkedIn, Indeed, and other job search portals is important if you want to hire employees. It allows the applicant’s data to be synced with the ATS to process and structure it in the database. Similarly, other integration options, like Slack, make communication within the organization easy.

3) Data Security

Any advanced employee management system will always draw attention to data security. The reason is that an on-time employee manager deals with a lot of employee and organizational data. So, the software must have multiple layers of security. 

4) Customization

One size never fits all, so customization is always needed. Customization becomes even more important when it comes to software for employee management systems as things vary from organization to organization. For example, if there’s an organization in Tamil Nadu, they will have to comply with the state’s labor laws. Thus, their number of leaves may differ from another state. So, the software must also allow for such customizations.

5) Reporting & Analytics

As discussed earlier, top management’s eye over the workforce is important. In an employee record management system, it is done with the help of a report and analytics feature. It is a feature that undertakes data-driven insights to create reports for top management. However, it’s also important that the feature is not just here for showcase. In simple words, sometimes, the implementation of this feature becomes so poor that the data and insights look complex. Hence, understanding what’s going on in the organization becomes impossible. So, the implementation of the feature should also be good. The software must show most of the data in visuals for easy processing. 

What are the Challenges Faced in Employee Management Software? 

1) Manual Processes

While many employee management systems focus on automation and making their solution as automated as possible, some software is yet to evolve. That’s why even when the company implements an HRMS, the manual processes are useless. 

2) Visibility

Many employee management systems don’t support multiple devices, so their visibility remains low. For example, if you can’t access software on any device other than a laptop, it becomes a challenge for those in a field-type job role. They can’t carry a laptop everywhere, so mobile compatibility is important. 

3) Compliance

A business has to comply with many laws and regulations, and labor laws are one of them. If the software doesn’t comply with the local labor law, you may be sued for something you were totally unaware of. 

4) System Integration

If an employee management system doesn’t support integration with other business software, then data transfer and syncing become an issue. Many software programs don’t focus on integration and only develop core HR functions. Such software can create a big problem of being used for a long time, and suddenly, you need to integrate it with another system. 

5) Employee Data & Work Order Management

It’s one of the most common challenges organizations face after installing an HRMS. Employee date-wise work management is often excluded from HRMS software, so the company has to use some other software. So, it makes payroll calculation a lot more complex.

Market Trends in Employee Management Software

  • Hybrid Culture: Work from home is the new normal in many companies. There are many roles which, when shifted to work from home due to COVID-19, are found to be more progressive. However, it’s not the same with every job role, so we are left with a hybrid culture. So, a new trend in employee management systems is emerging that is relevant to the hybrid work culture. It allows the management of employees, whether sitting right in front of you or their homes. 
  • Employee Experience: Employee management software companies focus on features that enhance the employee experience. Companies are adding personalized interactions and feedback mechanisms to get data on employees’ experience and satisfaction so that organizations can work to improve their work culture. 
  • Employee Analytics: Employee analytics tools are helping to gather data like workforce demographics, performance metrics, engagement levels, etc. These factors help the organization to make data-driven decisions about their employees. 
  • Employee Monitoring: Employee monitoring is an important trend that has started in the industry. Many things are important for employee wellness, which you can know through employee monitoring. It included tracking their productivity, work activity, and compliance with policies and regulations. 
  • Automation: Automation is the top trend in this industry, taking it by storm. The reason is that automation has shed the load from the shoulders of the HR team. Whether it is payroll processing, leave management or performance appraisals, all these processes are now automated, so organizations are saving time and resources and decreasing errors. 


To summarize, this is everything you need to know about employee management software. There’s no doubt that it is a fabulous software for businesses to streamline their employees’ management. Moreover, it also helps you to comply with local labor laws, which is important for any organization. Investment in such software is good for the organization and the employees. However, if you are in the initial stages of running a business, then you can get free employee management software like CloveHRMS. It’s free for agencies with manpower of 50 or fewer employees and can be scaled easily as your business grows. 

Frequently Asked Questions

1) How much does Employee management software cost?

    The employee management system cost in India starts from ₹1500 per month to ₹7000 per month for 50 – 100 employees. However, more premium options are also available, which can go up to ₹14000 per month. However, if you are a small organization, you can opt for free employee management software like CloveHRMS. CloveHRMS is free for small agencies with an employee strength of 50 or less. 

    2) What are the 5 steps of employee management?

    To become successful at managing your employees, here are the five simple steps to follow: 

    • Create an Open Communication Policy: An environment where employees can communicate their problems and suggestions easily is undoubtedly important. So, it’s obvious that you need a policy that supports such an environment. 
    • Be clear with your expectations: Complex goals where you add too many terms and conditions can never work as they constitute fear among employees. On the other hand, clear expectations make employees understand what you want and how to achieve it. 
    • Focus on employee development: An organization is always a place to learn, whether it’s a school or an office. However, you can enhance this learning experience by investing in your employees’ development, which eventually results in better company growth. 
    • Make your place trustworthy: When there are trust issues in an organization, many problems go unnoticed because they never came before you or your higher management. So, trust plays an important role in managing employees and working for their wellness. 
    • Reward your employees: Your efforts should go unnoticed, and that’s why rewarding them is important. Appreciate them for their small achievements and reward them for the significant ones.

    3) What is HR’s role in employee management?

    HR’s role in employee management is crucial for fostering a positive work environment. HR plays an important role in enhancing employee productivity and satisfaction. Moreover, HR oversees various aspects of the employee lifecycle. It includes recruitment, onboarding, performance management, and many more. Simply put, employee management is one of the most important jobs of the Human Resource department in any organization.