What Exactly is an HRIS? A Quick Guide for HR Teams

Imagine you volunteered to help run your kid’s sports team on the weekends. At the end of every week you get a flurry of WhatsApp messages from other parents — someone’s sick, someone’s injured, someone else has outgrown their cleats and needs the next size up… You have to try and put together a team for their next match, make sure everyone’s got the gear they need, and ensure all the kids are getting fair opportunities. And you’re doing it all by shuffling round pieces of paper.

Now imagine trying to execute this management for an entire workforce with the same system (or lack thereof). 

Thankfully, there’s no need to deal with that nightmare scenario. You can simply implement a human resources information system (HRIS)!  Let’s dive into what an HRIS is, and why it’s so useful for companies today.

What is a HRIS?

Human Resources Information Systems (HRIS) are a type of software designed to automate and streamline many of HR’s core processes, like applicant tracking and talent management. Companies use HRIS systems to streamline recruitment processes, payroll, performance appraisals, attendance tracking, and benefits administration. They can also aid in employee data management, which may include information like salaries, vacation days, benefits packages, and tax documents. Many HRIS systems include record-keeping, analytics, and data visualizations that help you generate workforce insights based on this employee information. 

What’s the Difference Between an HRIS, HRMS, and HCM?

Many HR departments use several softwares daily. These often have similar features (and names), which can lead to them being confused. But Human Resources Information Systems (HRIS), a Human Resources Management Systems (HRMS) and a Human Capital Management (HCM) systems have subtle distinctions that support different uses.

Here is how these programs differ:

• HRIS: This is for storing and managing employee data. It helps HR teams with information management and record-keeping.
• HRMS: A more comprehensive suite of programs for managing employee data, this can expand HRIS functionality. It is also used for employee experience management, onboarding new employees, and learning and development. HRMS normally refer to on-premises software suites, and are becoming less common as more companies look for cloud-based solutions instead. 
• HCM: These focus on the whole employee lifecycle, and is more often used by enterprise businesses as it’s a more comprehensive system. HCMs are often cloud-based and the term is often used interchangeably with HRMS.

What Does an HRIS Platform Do?

Every platform will be slightly different, but many include similar functionality. Some common HRIS features may include:

• Payroll processing
• Attendance tracking
• Time tracking
• PTO monitoring
• Employee benefits administration and enrollment
• Employee performance reviews
• Legal compliance management

Some HRIS platforms also include portals for employees. They can use them to:

• Access pay stubs and tax documents
• Enroll in company benefits
• Update personal details
• Submit and view PTO requests

Benefits of an HRIS

An HRIS platform can help companies streamline their human resources processes, making them more efficient and cost-effective. Below are some of the key benefits of using an HRIS.

Increase Productivity

An HRIS automates time-consuming manual processes, like data entry and retrieval, attendance tracking, and payroll.

This frees up an HR department to work more efficiently so they can be more productive. As an additional bonus, it gives them more time to spend on strategic HR initiatives like talent acquisition, succession planning, and workforce management.

Centralize Employee Data

HR professionals handle huge amounts of paperwork and record-keeping for their company. This includes employees’ personal data, such as contact information, social security numbers, payroll information, and medical information. It’s vital that data is appropriately managed.

Gone are the days of tracking all your employee data in spreadsheets. An HRIS gives you one centralized location to store, manage, and access it all. This makes it easier to keep employee records updated as you only have one system to change. If an employee changes their address, for example, you should only need to update your HRIS instead of updating it across a variety of systems.

Get Enhanced Insights

An HRIS solution may allow you to generate reports and visualizations to get more detailed insights into employee behaviors, skills, and experience. This can make performance management easier, as managers can quickly get a comprehensive view of an employee’s work history.

You can also use it to track trends like absences and staff turnover, which will help with strategic planning. You might, for example, use the data from your HRIS to plan for future recruitment needs or benchmark salaries. 

Improve Decision-Making

Sixty-seven percent of HR leaders feel their organization is ineffective at using data in its workforce planning, according to Gartner. HRIS software can help by giving you real-time access to employee data, making it easier to include this information in your strategic decision-making.

Additionally, some HRIS platforms include forecasting and data modeling to help HR professionals make informed decisions. This is particularly helpful when times are tough for the business. If the company needs to plan layoffs, for example, they can use HR data alongside data from the finance team to model different scenarios to find the optimal outcome.

On a more positive note, it also helps when planning pay raises and promotions. You have the data to see who your top performers are, and can easily compare employee compensation and contributions.

Maintain Compliance

As we’ve seen, HR systems contain a lot of sensitive information, so data security should be a top priority. An HRIS can help maintain compliance with data handling and processing regulations, to help prevent data breaches and other security incidents. 

Generally speaking, there are three main types of compliance standards that HRIS providers must adhere to: 

• Privacy compliance sets out rules for how data should be collected, used, and stored by the company.
• Security standards regulate how companies must protect user data, including how secure the software is and how it handles user data.
• Accessibility standards focus on ensuring the software is accessible to everyone, regardless of physical or mental abilities.

Meet Changing Business Needs

The best HRIS platforms offer flexible features and functions across a variety of price tags. This makes it easy to scale up your platform usage as the business needs change over time. 

This matters because a small business will have very different HR needs than a large organization. As you plan for long term growth, you’ll want to understand how a platform will adapt to your changing situations. Suppose, for example, your company expands and opens offices in other locations. In that case, you may need to comply with new regulations or state-specific laws and your HRIS might need to expand in tandem.

The Right HRIS Makes Life Easier for HR Teams

There are so many HRIS platforms available that it can be hard to choose one for your business. There’s no definitive answer to which is the “right” or “wrong” choice — it comes down to what will make things easier for your HR team. Sites like G2 can help you compare different systems and read reviews from other customers to get a feel for what will be a good fit for your company. 

A good HRIS can make it easier to spot employees who haven’t taken any PTO recently, and may be at risk of burnout. You can use it to roll out a range of flex benefits to help attract and retain employees. And you can monitor benefit usage and uptake among employees — for example, to see who’s using your corporate wellness package.

Not offering any health and wellness benefits to your team just yet? You could be missing one of the most sought-after employee benefits from your program. Find out more and talk to a Wellbeing Specialist today!

References

• Strategic Workforce Planning, Gartner. Retrieved February 7, 2023 from https://www.gartner.com/en/human-resources/insights/workforce-planning
• Practicing Strategic Human Resources. Society for Human Resource Management. Retrieved February 7, 2023 from https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/practicingstrategichumanresources.aspx