What is a human resource information system (HRIS)?

HRIS (Human Resource Information System) is a software that stores, manages, and tracks employee-related data. Originally an electronic record-keeping and filing solution, HRIS has evolved over the decades into a cutting edge management system that monitors and assesses data– enabling HR leaders to make strategic, evidence-based decisions. Though each HRIS differs depending on the company and the vendor, they usually include the following functions:

  • Recruitment and retention
  • Work scheduling 
  • Compensation
  • Benefits administration
  • Training  
  • Self-services for candidates, employees, and managers
  • HR Workflows
  • Core HR

How do I choose an HRIS?

Choosing the best HRIS for your organization begins with understanding what goals you want your HRIS to meet. What challenges do you face that it can help you with?

Think about:

  • The size of your team
  • What kind of business your organization does
  • Where your team members are located 
  • Whether your team includes employees, contractors, or both
  • What processes you want your HRIS to help with
  • Your budget

Once you’ve identified the answers to these questions, you’ll be able to look at the different HRIS types and vendors available on the market and narrow down your choices to the ones that fit your needs and budget. When you narrow it down to a shortlist, you can try out your top choices and decide based on the one that worked best for you during the trial period.

HRIS System vs. HRIS Software vs. HRMS vs. HCM 

All of the acronyms involved in the HRIS world can be a bit confusing, especially because they’re often used interchangeably. Let’s clear up what they mean.

An HRIS system is just an HRIS. In fact, the “S” in HRIS stands for “system.” 

HRIS software is, again, an HRIS. HRIS is, after all, a type of software.

HRMS stands for Human Resources Management System. Sometimes it’s used to mean the same thing as HRIS. In other instances, it refers to a more complex software with additional features such as talent and performance management.

Finally, HCM stands for Human Capital Management. HCM is like HRIS but much more complex. The term usually describes a whole suite of tools made to help HR teams manage the entire employee lifecycle. And, to make it just a bit more confusing, sometimes people will use the term “human capital management” to refer to the strategic approach to managing talent. 

Why should HR leaders care about HRIS?

An effective HRIS is a fundamental component of any successful company in today’s market. The system can improve the employee work experience, increasing engagement, productivity, and retention, while simultaneously benefiting HR. An HRIS boasts: 

  • Automation and self-services remove the burden of endless paperwork from HR professionals, enabling them to invest time and energy directly into the employee experience.  
  • An easily accessible database that provides HR leaders with data and reports to make informed, evidence-based decisions.
  • A centralized virtual platform that facilitates employee engagement encouraging employees to connect, collaborate, and recognize each others’ achievements.
  • Improved talent management services that enable a quicker, more direct recruitment process.

When is it time to get an HRIS for your business?

Companies of all sizes can benefit from an HRIS, but a common rule of thumb is to say that you should start looking into implementing an HRIS once your organization has reached 25 people. 

You can also use the following handy checklist. If you find yourself nodding along to most or all of these statements, it’s probably time for you to get an HRIS:

  • Your team spends hours a day on manual tasks like data entry and paperwork
  • You get lost in your Excel spreadsheets
  • You never seem to have enough time for bigger-picture, strategic thinking 
  • You often get blocked waiting for signatures, authorizations, and reports
  • People come to you with the same questions again and again

What can HR leaders do to effectively implement an HRIS?

Implementing an HRIS is time-consuming and complex, so HR leaders must be committed to the process. HR leaders can prepare for the HRIS implementation through these steps:

  • Draft a comprehensive, concise plan. A written plan should include a timeline for the project, the processes for achieving objectives, the budget, and a checklist of the company’s needs. HR leaders can refer back to this strategy to ensure that they are moving towards their vision. 
  • Procure the support of senior management. Before jumping into such a large project, important HR leaders should ensure that stakeholders agree to support the initiative and move forward together. 
  • Assemble a team. A group of representatives from different departments ensures a well-rounded perspective and analysis of the implementation process. HR should select a leader to manage the project and encourage constant communication between team members.
  • Choose an HRIS. After determining the company strategy and requirements, HR leaders and teams can begin comparing different HRIS products to find the right fit. It’s essential to pose questions such as: Will the vendor provide the support and training that our company needs? Will our data be adequately protected? How much is our company able to spend on implementation, software, and hardware systems?

HRIS security and privacy

With HRIS systems storing a large amount of personal and confidential data, it’s natural to be concerned about their security. 

The truth is that keeping addresses, bank details, and identifying information in an HRIS is much safer than more old-school approaches of storing personal information on paper and spreadsheets where it can be easily lost or apprehended.

That being said, there are privacy risks inherent to HRIS systems, too. That’s why it’s so important to make decisions with security in mind. This means:

  • Choosing an HRIS provider that prioritizes safety and complies with data protection regulations 
  • Training all users on secure use of the system
  • Requiring strong passwords that must be changed regularly
  • Storing files and backups securely 
  • Considering using cloud-based software, which is often more secure than on-premises software

How many employees can an HRIS handle?

HRIS systems are all different. Some providers claim their systems can handle an unlimited number of employees,

 and others target organizations of specific sizes. This is why the number of people you need to serve with your HRIS should be a key consideration when choosing the system you want to implement. 

Most HRIS systems grow along with your business, meaning they can accommodate varying numbers of employees as your organization onboards more people. 

How can an effective HRIS improve company culture?

A seamlessly implemented HRIS system enables a company to function and progress, while also keeping pace with the fluid market. Moreover, an HRIS enhances the employee work experience — promoting efficiency, engagement, and community. This in turn contributes to building a company culture of individuals who feel they belong to a unified body, as they collectively work towards a shared goal.