HRMS for Indian SMEs: Build vs Buy (and What the New Labour Codes Change)

• Payroll and payslips: generated and shared automatically every month.
• Attendance: punch in and punch out, shifts and working hours.
• Leave: applications, approvals and balances online.
• Employee records: appointment letters, IDs and documents stored securely in one place.
• Assets: laptops, phones and equipment issued to each employee.
• Onboarding and exits: checklists so nothing is missed.
• Reports: headcount, attendance and payroll summaries for management and auditors.

These modules only save time when they share one employee record. Attendance and approved leave should flow straight into payroll, so nobody re-types days worked at month end. Documents and assets should sit on the same profile, so an exit checklist can confirm the laptop was returned and the final settlement was paid. When you compare tools, ask to see one employee move from joining to payslip to exit, not a list of features.

If your business also invoices customers, the same structured data can feed your GST billing software, which matters if you plan to connect the two later.

The Government of India brought four labour codes into effect from 21 November 2025, consolidating 29 central labour laws. They are the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. Several changes land directly on HR systems:

• Appointment letters for all workers. Your system should generate and store them.
• Single registration, licence and return. Clean, consistent employee data makes compliance filings easier.
• Timely wage payment. Payroll has to run reliably on schedule.
• A national floor wage and equal pay for equal work. Pay structures need to be consistent and easy to check.

States are notifying their own rules under the codes, so details differ by location. Confirm your specific obligations with your payroll or legal adviser, and choose an HRMS that can be updated as rules change.

Use this list to check whether your current process, or the HRMS you are evaluating, can support what the codes expect day to day:

• Appointment letter on record for every worker, generated from a template and stored on the employee profile.
• Monthly salary paid on time. Under Section 17 of the Code on Wages, monthly wages are due before the end of the seventh day of the following month. Your HRMS should lock attendance early enough to make that date.
• Final settlement within two working days of removal, dismissal, retrenchment or resignation, also under Section 17. Exit workflows need to trigger payroll immediately, not at the next monthly run.
• Attendance, leave and overtime records that can be exported for an inspection without manual clean-up.
• Consistent pay structures so equal pay for equal work can be checked role by role.
• Payslips shared with every employee each month, with a record that they were issued.
• Access logs for salary and identity documents, which also supports your data protection obligations below.

An HRMS holds personal data about every employee, from bank details to identity documents. Under the Digital Personal Data Protection Act, 2023 and the rules notified in November 2025, employers should be clear about why they process employee data, limit access to those who need it, and protect it with reasonable security safeguards. Look for role-based access, secure document storage and audit logs in any system you consider.

Buy when

• Your HR processes are standard: fixed shifts, a simple leave policy, one entity.
• You need a system running in weeks, not months.
• You do not have anyone to own a custom system after launch.

Build or customise when

• You have rotating shifts, field staff, contract workers or several companies under one group.
• The HRMS must connect with your ERP, billing, access control or other internal tools.
• Per-employee subscription fees become expensive as headcount grows.
• You want full control over where employee data is stored.

If you are leaning towards a fully custom build, our guide to app development cost in India explains how scope, integrations and maintenance drive the budget.

Our HRMS portal sits between the two. It is a ready system covering payslips, punch in and out, leave, documents and assets, which we configure for your company. We add your departments and employees and set up the automations for payslips and notifications. It costs ₹10,000 a month for up to 1,000 employees.

The portal was built by Yatin Chaudhary as sole developer for an organisation of 5,000 people, so it is designed for real scale, not just a small team.

1. How do you update the system when labour code rules or state rules change?
2. Can employees use it on their phones for attendance, leave and payslips?
3. Who can see salary and identity documents, and is access logged?
4. Can we export all our data if we leave?
5. How do you move our existing data from spreadsheets?
6. What does the price look like when our headcount doubles?
7. What support do we get, and how quickly?

• Payroll software for small businesses in India
• DPDP Act for employers: employee data in your HRMS
• Attendance management systems for Indian SMEs
• Our HRMS portal: features and pricing

• Press Information Bureau, Government makes the four labour codes effective
• Press Information Bureau, Digital Personal Data Protection Rules, 2025 notified
• Ministry of Labour and Employment, Labour Codes
• Digital India, Digital Personal Data Protection Act, 2023 and Rules