Every growing company will need to invest in an HRIS (Human Resource Information System) at some point. It’s not only beneficial for your HR team; a well-integrated HRIS is also instrumental to your business development and company culture as a whole. When implemented correctly, a quality HRIS system will help you achieve business goals more quickly and efficiently.
Our complete guide to HRIS systems will provide insights on:
- Why your business needs one;
- How to successfully implement an HRIS system; and
- Examples of the most popular HRIS vendors on the market
Why Does Your Business Need an HRIS System?
All companies - big and small, remote and office-based - can benefit from integrating a quality HRIS into their HR infrastructure. Once your company reaches 25 people, it’s a good time to invest in one. If you don’t, your business will struggle to grow.
This handy piece of HR software affects every single person in your business and allows you to:
- Scale your team and business smoothly by collecting and storing employee information in one centralized location.
- Save time and resources by automating HR functions like onboarding and time off.
- Improve remote employee experience by providing easy access to company information, training programs, and feedback forms.
- Keep your data safe using trusted and compliant cloud-based software.
- Guide your People & Talent strategies using data-based insights and employee feedback.
As you can see, an HRIS isn’t just for your HR team - it benefits the whole company.
We’ll go into more detail about the benefits of using an HRIS later, but first, let’s define what it is.
What Is an HRIS?
HRIS stands for Human Resource Information System or Human Resources Information System. It’s software that helps HR professionals collect, store, organize, and analyze employee data within a centralized platform. HRIS software automates repetitive HR functions, allowing People teams and managers to focus on talent acquisition, retention, and strategy instead.
A human resource information system may include some or all of the following functions:
- Record-keeping and file management
- Employee lifecycle changes
- Time off and holiday tracking
- Training and development
- Application tracking for recruitment
- Self-service benefits
- Performance and engagement tracking
There are two main types of HRIS systems: on-premise software and cloud-based software.
While on-premise HRIS software is highly customizable and runs on a company’s existing technical infrastructure, it can be very costly to set up and may require hiring dedicated IT personnel.
On the other hand, cloud-based software is less expensive, easily scalable, and much easier to keep up-to-date. This makes it a much more attractive option for start-ups and small-to-medium businesses.
HRIS System Vs. HRIS Software Vs. HRMS Vs. HCM
You may hear some HR professionals use the terms “HRIS system,” “HRIS software,” or “HRIS platform” interchangeably. Essentially, they’re all slightly different ways to talk about the same thing. The “S” in “HRIS” stands for “system,” so saying “HRIS system” may seem redundant, but it’s actually a very common phrase and well-integrated into HR language.
Similarly, some HR professionals use the term “HRMS,” which means “human resource management system.” Again, this can be used as a synonym of “HRIS” but sometimes refers to a more complex type of software with additional features. HRMS systems may include talent and performance management in addition to the basic functions offered by an HRIS.
Finally, there’s “HCM” - “human capital management.” Like a human resource management system, human capital management systems are considered more complex than HRIS and perhaps the most complex of all HR technology. Instead of just one piece of software, HCM is often used to describe a suite of tools to help HR professionals throughout the entire employee lifecycle. Human capital management may also refer to the strategic approach of managing and nurturing talent.
At the end of the day, the terminology used to describe HR software isn’t that important. Every vendor offers something different, so your business has to find the solution that best solves your unique HR challenges.
Examples of HRIS Systems
There are so many HRIS providers available that it would take all day to list them, but here are just some of the most popular vendors on the market:
- ADP Workforce Now
Who Is an HRIS Analyst?
Companies may choose to hire an HRIS analyst to implement, manage, maintain, and analyze the business’s chosen HRIS and its data. This HRIS specialist is responsible for ensuring the wider business effectively uses its chosen human resource information system to support the overall HR strategy.
The responsibilities of an HRIS analyst may include:
- Creating and upholding HRIS processes
- Managing third-party relationships with software vendors
- Producing regular reports and dashboards
- Carrying out system health checks to ensure the database runs smoothly
- Providing support and training for employees
While larger companies typically appoint a specialist HRIS manager, smaller companies may distribute the above tasks across their whole HR team.
What Do You Use an HRIS For?
HRIS systems can have many uses - for both HR professionals and the rest of the business. The primary (and most traditional) use is the storing and organizing of employee data. But HRIS systems have developed far beyond that to provide applicant tracking, staff training opportunities, and much more.
The exact functionality of your HRIS software will depend on the vendor you choose, but here are some of the main use cases:
Organizing and Analyzing Employee Data
HRIS platforms allow your business to bring all relevant employee data into one centralized platform. That way, your HR team knows exactly where to access specific data when they need it.
The employee information stored in an HRIS platform may include:
- Name, gender, and date of birth
- Address and office location
- Job title, department, salary, and direct reports
- Accumulated tenure
- Emergency contact details
- Accumulated paid time off & sick days
- Performance reviews
- And more
HR professionals can use this data to create reports and dashboards for analysis. Some HRIS vendors also offer data visualization tools so your team can interpret information more easily.
Managing the Employee Lifecycle
One of the most important functions of an HRIS system is enabling HR teams to effectively manage the whole employee lifecycle, from onboarding to offboarding. HRIS software makes it simple to streamline and automate HR workflows, reducing cost and effort.
Whether it’s collecting information from a new hire, automating payroll, or approving a promotion, HRIS systems make managing the entire employee lifecycle much less time-consuming.
Some of the larger HRIS platforms (or human resource management systems), like Workday, also cover the pre-hiring stage, offering application tracking systems (ATS) to support recruitment efforts.
Providing and Managing Benefits
Attracting and retaining top talent requires a competitive benefits package - and some human resource information systems can help you with this too! In addition to paid time off management, HRIS providers may be able to assist in managing benefits, such as health and retirement, too. This could take the form of administration, enrolment, data analytics, or integration with your dedicated benefits platform.
Some providers even offer self-service perks for your employees to pick and choose what they like. From discounts on their favorite brands to free cinema tickets, these little extras can really help drive engagement.
Tracking Performance & Training
While an abundance of tools are available to help your teams set goals, conduct 360 reviews, and monitor performance, this is a function that many HRIS and human resource management systems boast too. Keeping all performance-related data in one convenient place will help streamline your review process and make it as easy as possible for everyone involved.
Some HRIS software also includes learning management modules, which allow you to provide and track employee training. Training on cyber security, data protection, diversity and inclusion, leadership, remote communication, and more helps your business stay compliant and build a strong company culture.
Creating a strong feedback loop is crucial for developing company culture and improving retention. Thankfully, many HRIS and HRMS systems make it easy to gather regular and structured feedback from employees.
Using survey templates, you can easily monitor employee engagement, satisfaction, and wellbeing through your HRIS system. You can then prioritize actions based on reports generated by the survey results.
Empowering Employees to Self-serve
HR professionals are busy people, so encouraging employees to self-serve various HR functions will make their lives easier. A quality HRIS will allow your employees to seamlessly manage their time off, update important personal details, and find out more about their colleagues.
Remote employees, in particular, will benefit from employee directories and company organization charts. Using the HRIS, they can find out information such as their colleague’s location, tenure, and even their hobbies or specialist skills.
How to Implement a New HRIS System
If you don’t already have an HRIS system in place, or you’d like to introduce a new one, here are the main steps you need to take for successful implementation.
1. Create Your Strategy
Do some research to identify the challenges your HR team is facing and how an HRIS could help solve them. Here are some key questions to help guide your strategy:
- How big is your team, and how much will it grow in the next six months to three years?
- What kind of business is it, and what kind of customers do you cater to? Your HR software may need to be able to sync up with an ERP or CRM, for example.
- Where are your team members located? Are they distributed across the world? Do they mostly work from home, or is it a hybrid team?
- Does the team include contractors or employees, or both?
- Which of the building blocks in the employee lifecycle does the HRIS need to manage? Perhaps you require end-to-end management?
Once you’ve got answers to the above you can set goals for implementation, define a budget, and outline a time frame for each stage.
This will help you find the best HRIS vendor for your particular business needs and get the senior management buy-in you need to proceed!
2. Put Together a Working Group
Assemble a working group to help implement your HRIS system and gather feedback from all stakeholders. This should include a team lead - either an HRIS specialist or a member of your HR team - and several other employees who demonstrate an interest in making your new HRIS system a success.
While it may seem natural for your working group to be formed of HR professionals, it’s wise to include team members from other departments too. This will give you access to different perspectives and relieve some of the pressure on your HR team.
3. Choose Your Top Vendor
Every HRIS vendor offers something slightly different. Some are designed for huge corporate enterprises with large budgets, while others cater to a smaller headcount. Use the answers to your strategy questions above to create an HRIS scorecard that includes all the parameters you’re looking for.
You should now be able to narrow down your selection to a few top contenders that meet your criteria. Be sure to test out these choices with dummy data and uncover any issues or blockers.
Report back to the HRIS companies about what went well and what didn't. Now you can assess how supportive and flexible they are. Can they support your needs? Can they easily fix issues that come up? How much will it cost in terms of time and money to make these adjustments?
Using all that information you should be able to make a final decision and choose your preferred HRIS solution.
4. Import Your Employee Data & Configure Settings
You likely have a lot of data across many different platforms and spreadsheets. The quickest way to import it into your HRIS is to collate all the information in one place. The good news is that many HRIS vendors offer spreadsheet templates to make importing mass data easier.
Once you’ve imported data, you’ll need to configure the settings within the HRIS system. This may involve setting time off limits, creating HR workflows, and integrating it with your existing communications software.
5. Send out Clear Communications
Before you roll out the new HRIS software, be sure to send out clear communications to the rest of the team to get them ready (and excited!) for its launch.
Send out an initial company-wide email to inform your colleagues about the launch. Include details about your chosen HRIS provider, its benefits and features, and a timeline for training and roll-out. You should also create an FAQs document to prevent question repetition and save time.
It’s worth repeating these comms on various channels, so everyone is aware of what they need to do ahead of launch.
6. Provide Training & Launch
Set up training sessions for all employees to show them how to make the most out of the HRIS software. This training could take the form of a short webinar, video tutorials, or a slide deck.
Give everyone time to use the platform and come back to you with any feedback or questions. It's a huge change for all so plenty of time is needed. Once everyone is comfortable, you can phase out old processes.
Moving forward, you’ll need to continually monitor and tweak your HRIS system and processes for long-term success. Make sure any training documents are kept up-to-date for future hires and collect employee feedback for improvement ideas.
Benefits of HRIS
As we’ve already touched on, there are loads of benefits to using an HRIS system in your business. Let’s take a look at each benefit in more depth.
It Helps Your Business Scale
As you scale your business, you’ll need a simple way to collect and store employee information. Endless spreadsheets and multitudes of separate apps for each HR function will only get you so far.
To scale sustainably, you’ll need an all-in-one package that handles large amounts of employee data and helps streamline HR processes. An HRIS system helps you do just that.
Many HRIS systems can also support your recruitment and hiring efforts with applicant tracking software. This will enhance both the recruiter and candidate experience, improving your company’s external and internal image.
It Saves Time & Reduces Costs
By modernizing HR processes and automating repetitive tasks, a human resource information system will enable your HR team to spend less time on administration and more time planning and executing a robust HR strategy.
Time isn’t all you’ll save; HRIS systems can also help reduce overall business costs.
- Spend less money on storage space for reams of paper and filing cabinets.
- Empower your HR teams to focus on higher ROI activities, like hiring the best talent and nurturing employee retention.
- Improve productivity by allowing employees to self-serve certain HR functions like time-off management.
In fact, BambooHR estimates that integrating an HRIS system can result in over $90,000 of business savings per year!
It Improves Remote Employee Experience & Company Culture
From a smooth recruitment process to seamless onboarding, a quality HRIS system will give candidates and new hires a good impression of your company from day one. From there, easy access to a portal of information and self-serve features will enhance employee experience throughout their lifecycle.
Employee self-service is especially important in a remote or hybrid work environment. The ability to look up information about distributed colleagues will help employees to connect and communicate more effectively. Whether it’s knowing where their colleagues are based or when they’re taking time off, employee self-serve is one of the best elements of HRIS software for the wider team.
Finally, HRIS software often comes with functionality to create and send out employee engagement and satisfaction surveys. By encouraging regular feedback, your HR team can act on issues and suggestions to improve company culture and employee experience.
It Keeps Personal Data Safe
HR teams need a lot of personal data: from home addresses to social security numbers, passports to bank details. Using old-school paperwork and spreadsheets full of personal information is a recipe for disaster. Information can be easily lost, or worse, get into the wrong hands.
Using a trusted HRIS provider can reduce data risk and help you stay compliant. When selecting an HRIS vendor, research how they handle personal information and comply with local data protection regulations, such as GDPR.
It’s worth noting that cloud-based software can also be more secure than on-premises software. Cloud-based HRIS software gives you greater control over user accessibilities, access to an off-site backup for easy recovery, and it’s simpler to stay on top of security patches and compliance too.
It Guides Your People & Talent Strategies
Data-based decision-making is crucial for creating a successful HR strategy. Using an HRIS, your People and Talent teams can access and analyze all the information they need to make smarter decisions, including:
- Employee retention and turnover
- Demographics and diversity
- Salary benchmarks and promotion history
- Satisfaction and engagement
- Location and worldwide distribution of team members.
HR teams can use this data and the reports generated from it to develop a clear talent strategy, build a more equitable workplace, support the business’s scaling and global expansion efforts, and much more.