HRMS vs Spreadsheet: Which one for your business?

HRMS vs Spreadsheet: Which one for your business?

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When it comes to tracking employee data, you have two main options: Human Resource Management Systems (HRMS) or spreadsheet software. While both can get the job done, which is the better choice for your business? In this article, we’ll compare the pros and cons of each option to help you make an informed decision.

Spreadsheet Software

Spreadsheet software, such as Microsoft Excel, Google Sheet or WPS Spreadsheet, may seem like the simpler and more economical choice at first glance. After all, it’s widely available and easy to use, and many businesses already have it in place for other purposes. However, there are several key limitations to using spreadsheets for HR data management that you should consider.

First, spreadsheets are prone to errors and inconsistencies. It’s easy for data to be entered incorrectly, or for formulas to be misused, which can lead to inaccurate or misleading information. This can cause problems ranging from misunderstandings to major legal issues. In addition, spreadsheets can be difficult to update and maintain over time, especially in larger organizations with multiple people working on them.

Another issue with spreadsheets is their lack of security. They are vulnerable to unauthorized access, and there is no built-in mechanism for controlling access to sensitive employee data. This can be a significant risk for businesses, particularly when it comes to compliance with privacy laws.

Human Resource Management Systems (HRMS)

On the other hand, HRMS software is specifically designed for the management of employee data. It provides a central, secure location for storing and accessing all employee information, including personal details, job responsibilities, performance evaluations, and more. HRMS software also typically includes features for automating HR processes, such as time tracking, benefits management, and performance review scheduling.

One of the biggest benefits of using an HRMS is the increased accuracy and consistency of employee data. HRMS systems often include built-in checks and balances to ensure that data is entered correctly and consistently, reducing the risk of errors. This can save you time, money, and stress in the long run. In addition, HRMS software is typically easier to update and maintain over time, as it is designed for long-term use.

Another advantage of HRMS software is the improved security and compliance. HRMS systems include robust security measures to protect employee data and ensure compliance with relevant laws and regulations. This can provide peace of mind for businesses, particularly those that handle sensitive employee information.

Of course, HRMS software does come with a higher price tag than spreadsheet software. However, the cost of an HRMS should be weighed against the potential benefits it can provide, including increased efficiency, accuracy, and compliance. For businesses that rely heavily on employee data management, an HRMS can be a valuable investment that pays for itself over time.


While spreadsheet software may seem like a convenient and cost-effective choice for tracking employee data, it’s important to consider the limitations and risks of this approach. HRMS software is specifically designed for the management of employee data and can provide increased accuracy, security, and compliance. While it may be a higher initial investment, the benefits of an HRMS can make it a worthwhile choice for businesses that rely on employee data management.

With HRMLabs, you can automate your HR tasks such as attendance taking, leave requests, and payroll calculations. Our software is completely cloud-based so your data will be stored safely. The HR department can monitor their whole function from one platform that can be accessed in Windows or macOS.

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