What is a human resource information system (HRIS)?

An HRIS (Human Resource Information System) is software that stores, manages, and tracks employee-related data. The HRIS has evolved over the decades from the paper-filled filing system to a cutting-edge management solution that digitally monitors data and streamlines HR processes.

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
  • Workflow
  • Core HR

Bob, for example, is an HRIS–it integrates various solutions for HR functions in one platform.

What elements should an HRIS include?

A quality HRIS should be agile and adaptable. Companies purchasing an HRIS want a product that can evolve with them and accommodate changing work trends. Creating an intuitive HRIS involves constant evaluation, internal and external benchmarking, regular product developments, and ongoing service and assistance even after the implementation stage.

HRIS Features

Why should HR leaders care about HRIS?

Software systems are essential for businesses to operate and succeed. The HRIS functions as HR’s assistant and helps improve the employee experience, increasing engagement, productivity, and retention.

What are the benefits of HRIS?

An HRIS can help businesses adapt to and thrive in today’s rapidly changing world of work. Quality HRIS boast: 

  • Automation and self-services. These features boost workflow efficiency and remove the burden of endless administrative tasks and paperwork, freeing up HR professionals to invest more time and energy into what really matters: the employee experience.  
  • An easily accessible database. As a one-stop shop, an HRIS provides HR leaders with data and reports to make informed, evidence-based decisions. Employees, managers, and HR can enter data into the system, creating a big picture, holistic perspective. With a simple login process, this user-friendly software offers easy input and retrieval of information for everyone across the organization. 
  • A centralized virtual platform.  For hybrid or remote teams, this feature is crucial to creating community and building personal connections through facilitating engagement, collaboration, and recognition of others’ achievements.
  • Improved talent management. Through automation, an HRIS can streamline recruitment and benefit admin work. 
  • Better compliance. With all information on one platform, people can easily navigate the system to obtain information regarding different company policies. Companies can use these data-based insights to ensure compliance with national and local regulations more easily.

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 is
  • 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.

Choose HRIS

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 like talent and performance management.

Finally, HCM stands 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.

What are the advantages and disadvantages of an HRIS?

The advantages of an HRIS, as mentioned above, are clear. But each company must decide which type of HRIS or software solution satisfies its needs.  

While easy accessibility and automation are major pluses, they can lead to security and privacy issues by unintentionally publishing confidential information. 

Cost is another matter to consider. Companies with a workforce of less than 100 may find that buying, installing, and maintaining an HRIS costs more than their budget allows. Small businesses may prefer to integrate a less expensive SaaS with a monthly payment system. 

Lastly, smaller companies may use various point solutions to address specific issues. The decision to trade point solutions in favor of a comprehensive HRIS can be a big one, depending on a business’s size and maturity.

HRIS Solves HR Challenges

Why use an HRIS instead of a point solution?

A point solution offers prime services to address one or two specific HR functions. Attendance tracking or payroll software are examples of HR point solutions. 

An advantage of point solutions is that implementation is usually fast and doesn’t affect the entire system. Another perk is that, individually, they’re relatively low-cost. 

All that being said, point solutions aren’t necessarily the best option. Companies may need to hire many vendors to address each unique challenge. Working with multiple vendors can cost much more than a comprehensive HRIS, and the various software systems may not even be compatible. 

Moreover, working across different systems is inconvenient and time-consuming, as people have to enter data repeatedly into many different platforms.

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 t you with the same questions again and again

What can HR leaders do to implement an HRIS successfully? 

Implementing an HRIS is complex, so HR leaders must be committed to the process. HR leaders can prepare for the HRIS implementation using 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 to this strategy to ensure they’re moving towards their vision. 
  • Procure the support of senior management. Before jumping into such a large project, HR leaders should ensure that stakeholders support the initiative and are ready to get it moving. 
  • Assemble a team. A group of representatives from different departments allows for diverse perspectives and a comprehensive 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 your company needs? Will your data be adequately protected? How much can your company spend on implementation, software, and hardware systems?
Implement HRIS

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 safe 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, too. That’s why making decisions with security in mind is so important. This means:

  • Choosing an HRIS provider that prioritizes safety and complies with data protection regulations
  • Training all users on the 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-prem software

How many people can an HRIS handle?

Every HRIS is different. Some providers claim their systems can handle an unlimited number of team members. 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 adapt to the needs of the business, meaning they can accommodate varying numbers of employees as your organization onboards more people and adjusts to dynamic market trends.

Why should an HRIS be part of the modern HR strategy? 

HRIS enable companies to function smoothly and keep pace with the fast-paced world of work. Integrating an HRIS into the HR strategy enhances the employee experience by promoting efficiency, engagement, and community, so people feel motivated to do their jobs well.