What is an HRIS and why do you need it?
Human Resource Information System (HRIS) is a software solution that helps you manage your human resources processes. This includes recruitment, hiring, onboarding, document management, training, performance management, and more. Its main goal is to streamline your processes and save time, money and a ton of paper.
An HRIS not only reduces the number of potential human errors but also boosts employee engagement. Offering a self-service option gives your employees some autonomy in managing their employee profiles.
An efficient HRIS program frees up your HR employees to focus on the aspects that should take priority – learning and development, talent management, and creative strategy development to advance your company’s objectives.
Not quite what you’re looking for? Check out our high-level guide to HR software selection.
But it won’t just help your employees. The system’s report-generation capabilities will help you identify trends and address issues before they have a significant impact. It can also include a regulatory compliance module that ensures you comply with regulations at national and local levels.
And data management? Forget old personnel files gathering dust in archives. Now you can access everything you need from a compatible device without calling on an intern to sift through reams of paperwork. It’s a secure way to handle your employees’ important information and documentation, thanks to cloud-based storage.
So the question isn’t “Why do you need it?” but “Why don’t you already have it?”.
Breaking down the different types of HRIS
Separated into five categories, these HRIS software solutions pinpoint the needs of various organizations.
1. Operational HRIS
- Addresses HR’s functions, such as personnel changes, hiring, promotions, and performance management
- Keeps a record of pertinent documents, including employee records, appraisal information and job specifications
- Ideally suited for the standard requirements of HR and employee management tasks
2. Tactical HRIS
- Great for organizations that need a holistic overview of their status and data to support larger-scale decisions
- Helps allocate resources by supplying information on elements such as recruitment, learning and development, job openings, and compensation
- Includes data related to competitors, legal requirements, and union policies
- Assists in the decision-making process but less handy when it comes to daily HR functions
3. Strategic HRIS
- Similar to Tactical HRIS but aims to expand or grow an organization
- The same data is now used to plan the future of the workforce and the goals the organization can attain
- Provides information pertaining to market status and financial implications to help form the foundation for tide-turning maneuvers
4. Comprehensive HRIS
- Embraces all the functions of the other systems and creates a cohesive package for all your HR needs
- Streamlines your HR processes and offers a dashboard for easy review and access
- More costly than the others but proves its worth with the time and money it will save you in the long run
5. Limited-Function HRIS
- Serves a single purpose and are best suited for smaller operations
- Objectives range from payroll to training to benefits
- Modules with alternative functions may be added on as the needs of the organization diversify
- Maintains a central employee information database
- Affordable way to start the digitizing process and easily monitored
Choosing one of these HRIS systems fully depends on the requirements of your organization. Even if you have a starter company, certain features are must-haves. Read on to find out the components you won’t be able to do without.
Essential features of an HRIS
In choosing the best HRIS software for your company, it helps to compile a list of functions you’ll need to run your HR department at an optimal level.
Here are some features that make a good starting point:
- Applicant Tracking System (ATS): An ATS allows you to manage job postings, resumes, and applications in one place, making the recruitment process more efficient. Workable’s own best-in-class ATS comes ready-equipped with its own HRIS, which makes it a good fit for many businesses.
- Onboarding: With a single space for the completion of “paperwork” that relays this information to the relevant departments, you can avoid errors in the capturing of a new employee’s details as well as save time. Along with the necessary introductory process, some HRIS solutions can even perform background checks. Workable’s recruitment solution also comes with a native onboarding feature.
- Employee Self-Service (ESS): This portal links an employee with their personal information, allows them to request time off, and view their paychecks, among other functions.
- Benefits Administration: An HRIS should include a module for managing employee benefits, including health insurance, retirement plans, and paid time off.
- Performance Management: Performance appraisals are recorded, helping to set goals and provide feedback to employees. With real-time performance notifications, managers can respond almost immediately to positive and negative actions.
- Reporting and Analytics: Being able to track key metrics such as turnover rate, headcount, and employee engagement is a powerful tool in the decision-making process of any organization. An HRIS should be able to produce reports that are ready for the boardroom within minutes.
- Mobile Access: Anywhere, anytime, your HR information should be available with just a few taps of your fingertips. With a cloud-based service, the storage capabilities are amplified, making access to all employee information quick and easy.
- Scalability: Sure, your company is small now, but what happens when you begin to build your empire? You shouldn’t have to start fresh with a new software program. Your HRIS must grow with you and meet the demands of your burgeoning business.
There may be other HRIS features that are mandatory for the success of your HR department, such as payroll, learning and development functions, or talent management.
However, even starting with something as simple as a centralized database will show a world of improvement in how your workplace runs.
How to choose the best HRIS software for your needs?
With numerous options available in the market, it’s important to consider several factors before making your choice. Here are some steps to help you select the best HRIS software:
- Identify your organization’s requirements: Start by clearly defining your organization’s HR needs and goals. Determine the specific features and functionality you require, such as employee self-service, payroll management, performance management, recruitment, and onboarding.
- Consider scalability and flexibility: Ensure that the HRIS software you choose can accommodate your organization’s growth. Look for a system that allows for easy customization and integration with other software solutions you already use or may need in the future.
- Evaluate user-friendliness: User-friendly software is essential to ensure smooth implementation and adoption within your organization. Look for a system with a clear and intuitive interface that is easy for both HR professionals and employees to navigate.
- Assess data security and privacy: HRIS software handles sensitive employee information, so data security should be a top priority. Ensure that the software provider has robust security measures in place, such as data encryption, regular backups, and adherence to industry standards and regulations like GDPR.
- Review customer support and training: Implementing new software can be challenging, so it’s important to have reliable customer support available. Look for a software provider that offers comprehensive training and ongoing support to assist with implementation, troubleshooting, and answering any questions.
- Consider your budget: Assess the cost of the HRIS software, including licensing fees, implementation costs, and ongoing maintenance or subscription fees. Consider whether the features and benefits offered justify the investment and align with your organization’s budget.
- Request demos and trials: Reach out to software vendors and request product demos or trials. This allows you to explore and test the software’s functionality, interface, and overall user experience firsthand before making a final decision.
By following these steps, you can identify the best HRIS software for your organization, streamline HR processes, improve efficiency, and enhance employee experience.
What’s the difference between HRIS and HRMS?
Being in business these days is no easy feat. It can be bewildering to keep up with technological advances and ensure you have the most suitable systems in place for your requirements. In your search for an HR software solution, you will inevitably come across Human Resources Management Software (HRMS).
It’s essentially the top shelf of HR software that combines the capabilities of HRIS and Human Capital Management (HCM). That means it covers every aspect of HR, from payroll and time off to analyses and strategic HR functions.
Related: Learn more about the difference between HRIS vs. HRMS vs. HCM.
If you have a large number of employees, a complex operation, and a reasonably large budget, then an HRMS will be your best option. However, if your HR needs are pretty basic and you have less than 50 employees, an HRIS that centers on an employee database will serve you well.
What’s the difference between HRIS software and a payroll system?
While both are essential components of human resources management, they serve distinct purposes. HRIS software is a comprehensive solution that encompasses various HR functions beyond payroll. It enables HR departments to efficiently manage employee data, recruitment, performance evaluations, training, and benefits administration. On the other hand, a payroll system focuses solely on processing and managing payroll, including calculating salaries, deductions, taxes, and generating paychecks or direct deposits.
Payroll systems automate the calculation of wages, deductions, and taxes, reducing the risk of errors and saving time for payroll administrators. They generate reports related to pay stubs, tax filings, and employee payment history, which facilitate compliance and ensure transparency.
Although a payroll system can be a standalone software, integrating it with an HRIS software allows for the seamless transfer of relevant employee information and ensures that payroll data accurately reflects the employee data managed in the HRIS.
Cloud-based vs. on-premise HRIS
Another selection to make is whether you prefer cloud-based Software as a Service or retaining on-premises software licensing options. The PwC Tech Survey of 2022 found that while cloud transformation is the third biggest challenge when it comes to human capital for HR leaders, expectations were met and mostly overcome.
These expectations included:
- Greater HR control (89%)
- Increased employee engagement (84%)
- Improved productivity (86%)
- Saving money (82%)
While it would seem like the obvious choice, there are considerations to take into account:
- It’s possible for the system to be hacked without the right measures in place
- While cloud-based doesn’t require the high upfront cost of on-premises software, the subscription fees may add up to a tidy amount
- It’s fairly difficult to retrieve data from the cloud to transfer to another software solution
On the other hand, on-premises solutions have their own drawbacks:
- It’s a costly undertaking as infrastructure such as hardware, software, and servers need to be purchased to put the plan in place
- An IT team will also be required to troubleshoot any issues and monitor the system
- The uploading of data In this solution is done via manual entry, making the information prone to mistakes as multiple departments capture the same data
As per usual, making this decision is mainly reliant on the specifications of your company and your existing equipment status.
A look at the top HRIS providers
If you’ve done your homework, you’ve realized that there are an astounding number of HRIS providers on the market. Here we’ve separated the wheat from the chaff with the top 5 HRIS companies as voted for by users:
- Full suite of HR functions that include talent management, payroll, and benefits administration.
- Flexibility allows them to service organizations across the size spectrum.
- For small businesses that need a basic package, you can expect to have to add on services like ATS, HR training, and HR forms and documents.
Why we like it:
- Features include payroll, onboarding, ATS, compliance, training, and tracking
- 3 month free trial
- Wisely Direct Debit Card
- Suitable for an organization, of any size
Why we don’t like it:
- Most features are not available on the basic package
- $63/month (add $4 for every additional employee)
- After-sales complaints when it comes to customer service
- The basic package offers a central database, reporting and analytics, time-off management, and employee self-service.
- Onboarding, ATS, and training all form part of the advanced package with payroll, performance management, and time tracking categorized as add-ons.
- The quality of BambooHR’s HRIS is exceptional but with its advanced features, it’s perhaps better suited to medium and large organizations.
Why we like it:
- Comprehensive suite of features
- Simple and easy-to-use interface
- Flat rate for organizations with less than 20 employees
- Available in 6 languages (English, French Canadian, German, Spanish, Dutch, or Brazilian Portuguese)
- New Employee Wellbeing tool to improve retention
Why we don’t like it:
- Features like ATS and onboarding are not included in the basic package
- Not easily customized
- Time tracking is rounded off and problems experienced with converting to payroll
- Customers experience difficulty with integrations
- They promise to reduce recruiter workload by 75% thanks to the automation of repetitive routines in their ATS.
- They offer a free plan to businesses with less than 50 employees that includes ATS, employee profiles and directory, organizational charts, basic time-off management, and mobile capabilities.
- Freshteam excels on the recruitment front, but seems to provide fewer functions as employees get past the onboarding phase.
Why we like it:
- Free plan forever for small businesses
- Allows for different levels of access across the organization
- Easy to move applicants from one stage to the next
- User-friendly interface
Why we don’t like it:
- Basic HRIS in free plan that does not include document management or onboarding
- Integrations work best with Freshworks apps, but not as well with third-party providers
- Analytics tools could be improved
- They offer seamless syncing across HR, payroll, and benefits administration thereby avoiding time-wasting actions.
- Their base plan offers automated onboarding, time off tracking, integrations, analytics, employee management, scheduling, and mobile capabilities at $8/month/employee.
- At double that amount, they’ll throw in compensation management, configurable people analytics, and performance management.
- Add-ons include payroll, advisory services, benefits administration with your own broker, and recruitment.
- For small businesses looking for an HRIS that covers basic HR functions, Zenefits has a minimum five-employee requirement.
Why we like it:
- Great integration across the sections
- Automated tasks free up employees
- Easily locate resources for quick reference
- Convenient clocking in and out capabilities
Why we don’t like it:
- Features are not as comprehensive as other providers
- Less than five employees and you’ll still be charged the five-employee rate
- Customer support could be improved upon
- They offer a seamless onboarding experience with a branded onboarding portal, automations, and an onboarding dashboard
- Employee information and storage of important documents are easily organized and managed
- Updates are made automatically to your company’s org chart
- Compliance, especially in data privacy, is simplified with automated tools for GDPR and EEOC
Why we like it:
- Has the necessary onboarding & employee management functionalities for SMBs worldwide
- Customizable onboarding and management features
- Centralized platform for all HR-related documents
- Branded onboarding portal for a professional appearance
- Automated tools for GDPR and EEOC compliance
- Comes free with the purchase of Workable’s best-in-class recruitment software, eliminating tech clutter and integration headaches
Why we don’t like it:
- Not as expansive as other, more robust HRIS solutions
- Isn’t isolable as an HRIS software
- Other HR features, like payroll, are not yet built
Choosing the right HRIS for you
Selecting the perfect HRIS software solution boils down to one question: What do you need? If your business is just starting out, there’s no need to overextend yourself on fancy features that won’t make an impact.
Your best bet would be a package that covers the most important HR functions while staying within your budget. Keep it clean, keep it simple, and keep an eye on your bottom line.
Frequently asked questions
- What is an HRIS?
- An HRIS stands for Human Resource Information System, which is a software designed to support organizations looking to better manage their HR processes. It can handle various tasks in human resources including recruiting, onboarding, performance management, and employee data management.
- What are the benefits of using an HRIS?
- Using an HRIS can streamline HR processes, reduce human errors, boost employee engagement (and retention), and save time and money. It can even help increase productivity especially for human resources teams. It can also support regulatory compliance and provide valuable data and reports for higher-level business strategy.
- What are the essential features of an HRIS?
- Major features of an HRIS include applicant tracking, hiring funnel management, onboarding, document management, employee self-service, benefits administration, performance management, reporting and analytics, mobile access, and scalability. There's a lot more, of course.
- What's the difference between HRIS and HRMS?
- HRIS (Human Resource Information System) and HRMS (Human Resource Management System) are similar, but HRMS is more comprehensive and includes additional functions such as payroll, time and attendance tracking, and compliance management.