The recent trend of flexible and remotely-operated workplaces has dramatically changed the role of HR and how it operates. Organizing and delivering the best employee experience is challenging when employees work from home, in different departments, and across the globe.
As a result, the need for sophisticated HR technology tools rapidly grew.
One of the most transformative solutions is a human resource information system (HRIS), allowing users to electronically manage, track, and automate core HR functions and needs.
HRIS vs. HRMS vs. HCM
As companies move towards an integrated solution that streamlines multiple processes with one holistic management system, the lines get blurred between software definitions. We often see HR professionals use terms interchangeably, and keeping up with so many abbreviations is confusing. It is worth noting that although all of these terms describe the same concept – managing employees using HR software – they may vary in the key capabilities offered.
1) HRIS - Human Resource Information System
2) HRMS - Human Resource Management System
3) HCM - Human Capital Management
HRIS and HRMS both fit under the broader umbrella of HCM. HCM systems encompass the entire scope of employee management, both qualitative and quantitative information.
HRIS Features, Functions & Users
HRIS software is developing into an all-encompassing workforce tool as workforce trends change. HRIS systems help managers monitor and support crucial business areas by offering meaningful workforce insight.
In its essence, HRIS is an HR software package whose features can be tailored, added, or removed. The functions offered to vary depending on the vendor and product. Some of the most fundamental components that make up an HRIS are:
- Centralized employee database to store all employees’ information.
- Applicant Tracking Systems (ATS) to help with hiring efforts.
- Assists with recruitment, onboarding, and training-related activities.
- Benefits administration, payroll, and 401k tracking.
- Scheduling, attendance, and time-keeping.
- HR reports and analytics.
Features like performance management and succession planning can be added to create a wide-reaching system that meets business needs. HRIS can be run “in-house” on the company’s technical infrastructure or the more popular, cloud-hosted SaaS (Software-as-a-Service) model.
HR management solutions are not only essential because they lessen the administrative burden of HR professionals, but they also create positive changes throughout the whole organization. HRIS systems provide many benefits that go beyond automation and synchronization of data.
One of the main advantages of using HRIS systems is that they provide one centralized location with all employees’ information, removing the need for multiple spreadsheets, paperwork, and databases. Besides being efficient and time-saving, this system creates consistency across the organization and reduces human error.
Having all data in one place helps HR make workforce planning decisions and determine key trends. When operational and administrative processes are automated, HR teams can focus more on strategic areas and strengthen the company culture.
By merging HR and IT, employers can gather and analyze data to optimize the employee experience. This, in turn, increases employee satisfaction and productivity, saving the company money in the long run.
Choosing an HRIS system that aligns with your business objectives comes with its own set of challenges.
1) Selection of HRIS
The wide selection of vendors and variety of capabilities offered can seem daunting. One of the biggest challenges is the selection of the right HRIS software.
The data shows that it takes more time to select an HRIS system as the company size and number of stakeholders involved increase. In fact, companies can spend up to 16 weeks selecting HRIS on average.
2) Data Security
Data security and privacy are important factors when storing sensitive personal employee information. Protecting and updating paper records is inconvenient and unreliable, especially for large companies.
However, without the proper protocols and safety measures, HRIS systems could pose a security risk. Companies can avoid a data breach pitfall by authorizing the right personnel to access sensitive information and ensuring the software has the necessary security certificates.
Companies with multiple locations may be subject to dozens of compliance laws. Failing to adhere to federal, state, and local legal requirements could cause businesses to face serious penalties. Some HRIS software has automatic updates to ensure your organization is always up-to-date with recent laws and regulations.
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The decision to invest in an HR solution requires much consideration. Some must-have functionalities and factors that need to be considered are:
- Ease of use – Software with an intuitive design means no learning curve, which results in greater adoption.
- Mobile readiness – Accessible on any device, providing additional flexibility for remote workers.
- Integrations with other apps – Interoperability reduces duplication of data.
- Customization and scalability – Minimal disruptions to current business operations and eliminates the need to change the software as the company grows.
- Advanced security – Encrypt, safely maintain, and back-up employee records and protect your data.
- Powerful analytic tools and reporting – Use metrics and data to support managers in making complex and strategic HR decisions.
- Value for money – Identify which problems and challenges the new system will help relieve to determine the benefits and potential ROI.
Every business is unique and different, so the decision to invest should be based on the company’s needs, budget, and size.
Should I get an HRIS for my Business?
A business should think about investing in an HRIS if they struggle to:
- Attract, find, and recruit the right talent.
- Navigate changing laws and regulations.
- Get employees engaged.
- Streamline onboarding and provide a positive employee experience.
- Keep up with a growing and diverse workforce demographics.
- Store workforce data in one system and analyze it effectively.
- Train and develop employees.
How do HRIS Systems Work?
HRIS systems work by merging core HR functions into one system that collects and interprets employee information. This data hub becomes extremely valuable as it can produce reports and lays out a historical footprint for your company to measure against retrospectively.
In a typical scenario, employee data is entered during onboarding and then dispersed into relevant modules of the HRIS, such as payroll, benefits, time, and attendance.
How do HRIS Solutions Benefit an Organization?
Forward-thinking businesses that invest in the right HRIS management solutions will see benefits across all levels of the organization. The business case for HRIS systems can be made by highlighting the key business outcomes for all stakeholders.
- HRIS benefits the organization:
- Maintain compliance with changing regulations and data security protocols.
- More transparency in the organization on all levels.
- Opportunity to drive transformation and re-examine workflow processes.
- Acquire insights on vital HR measures, like employee engagement.
- HRIS benefits the HR team:
- Reduced costs from time-intensive tasks such as payroll calculation, scheduling, and other administrative-heavy tasks.
- Better allocated time and increased focus on strategic development.
- HRIS benefits employees:
- Employee self-service leads to increased employee empowerment.
- Quicker responses and communication.
- HRIS benefits managers and senior management:
- Better analysis leads to more effective and data-driven decision-making.
- Reduced costs.
- Gain a holistic understanding of current processes and workforce, leading to enhanced productivity.
How does HRIS help recruitment?
HR professionals spend too much time on transactional work instead of developing talent and building a culture. As shared in Shortlister’s recruiting statistics article, recruiters, on average, spend a third of their workweek sourcing candidates.
Most HRIS systems are equipped with an applicant tracking system to aid in the recruitment process. Applicant tracking systems help overcome one of the significant challenges in recruiting by increasing the quantity and quality of the applicant pool. Employers can attract well-qualified and diverse candidates by simultaneously posting on multiple job boards.
By adding AI to the hiring pipeline, screening and selecting from many applicants is fast and unbiased. Moving candidates through approval stages is as simple as just dragging them on one dashboard. As part of the final recruitment stages, quick and automated onboarding checklists are also available.
Another bonus is that an HRIS can play a critical role in keeping your company compliant with all the applicable state and federal regulatory requirements, such as the equal employment opportunity (EEO) law.
On a Final Note
With growing technological capabilities, the field of HR has been able to revolutionize even the most menial tasks. HR software continues to be an indispensable component of businesses, offering modern solutions to managing the complexities of an evolving workforce.
Does HRIS include payroll?
Typically, most HRIS systems are integrated with payroll management, one of the most important aspects of running a business. Tracking salaries, wages, and bonuses require the highest accuracy when calculating the correct payments. This data can also help managers make decisions about raises and other compensation.
What is an HRIS analyst?
An HR analyst is a specialized role that provides support for HRIS systems. HR analysts occupy the unique position of being the IT and HR expert for the system used in an organization.
What are the main reasons for HRIS implementation failure?
- Lack of managerial and executive support.
- No well-defined goals and objectives.
- Poor planning and improper implementation.
- Lack of appropriate training among staff.
- Adding too many features at once.
- Skipping the trial phase and gathering feedback.
Who needs Human Resource Software?
Companies of all sizes that want to track employees efficiently need HR software. Most commonly, HR managers look into an HRIS as the company size reaches more than 50 employees to manage and keep records effectively.