At the heart of an HR system is the employee information database. HR systems can eliminate or reduce the need for hard-copy employee files, keeping all of the information very organized and easy to access in a virtual electronic filing cabinet.

Payroll is the process by which employers pay an employee for the work they have completed. Any business with employees should have a payroll process established; payroll is often the largest expense for a business. An effective and efficient payroll process will ensure that employees are paid accurately and consistently, keeping them satisfied with this aspect of employment and allowing HR to focus on other areas.

Payroll seems simple at its core, but becomes complicated because of the various deductions that come into play. Employers must withhold taxes from each paycheck and make sure accurate funds are paid to the correct government agency. Employers may also be responsible for deducting and paying premiums for insurance and depositing funds into retirement accounts or to selected charities.