What Is a Human Resources Information System?

Human resource information systems (HRIS) systems are software solutions generally offering comprehensive management solutions for human resources departments. Companies use them to streamline payroll, recruiting, performance management and more. Companies can choose different kinds of HRIS depending on their unique needs.

As companies grow, maintaining detailed employee information, policies and procedures grows increasingly complex. Finding a way to streamline processes and reduce the amount of “busywork” can save businesses significant amounts of time and money. This frees human resources (HR) professionals to focus on more valuable work.

What Is HRIS?

The primary vehicle companies use to streamline HR-related tasks is a human resources information system (HRIS). HRIS is software that manages and processes employee information and all the HR-related policies and procedures an organization uses.

HRIS software gives businesses the tools they need to enhance people management.?

HRIS vs. ERP – What Is the Difference?

Companies shopping for an HR solution may encounter the terms HRIS and enterprise resource planning (ERP). While HRIS and ERP share some characteristics and goals, they are not identical products. The main differences between an ERP and HRIS are as follows:

What Is the Main Purpose of HRIS?

Companies usually use an HRIS when the cost of maintaining human resources information becomes too unwieldy or expensive to handle on their own. Companies adopt HRIS systems for various reasons, but the primary ones are to reduce time-intensive labor tasks, enhance their user experiences and make data-driven decisions.

Pros and Cons of Using HRIS

HRIS systems, like any software solution, come with a few trade-offs. While many organizations see HRIS adoption as a net positive, a company should be aware of the pros and cons of using them:

Features of an HRIS System

HRIS systems tend to share commonly used features. Most of the following items are staple offerings in the HRIS landscape.?

Centralized Database

HRIS systems offer their users access to a central database for employee information. This makes that data accessible to HR managers and teams. The database also provides enhanced security. It reduces the chances of hacking or spoilage of information.?

Employee Self-Service

Employee self-service is another major perk of HRIS software. With this tool, employees can request time off for vacation or illness. It allows them to track available hours and even manage their benefits.?

Payroll

Payroll administration is often a massive process for companies, especially those with hundreds or thousands of employees. Companies that handle payroll independently risk losing money due to misplaced decimals or slide errors. Incorrect calculations can lead to hefty fines if companies do not calculate taxes correctly.

Recruiting and Onboarding

HRIS platforms help recruiters and HR teams streamline the recruiting process with preliminary screenings. Using the HRIS to scan resumes, a recruiter can quickly weed out candidates that may not match the profile for a job posting. HRIS programs can even help conduct background checks and expedite the process.

Training and Development

Companies can use HRIS systems to facilitate training plans for their teams. The right HRIS will update managers on any outstanding training tasks and help new team members learn the ins and outs of their role and company procedures and protocols.?

Benefits Administration

Companies use HRIS solutions to streamline their benefits administration — to the point that it is sometimes the deciding factor for purchasing one. Most HRIS solutions allow for the customization of benefits options during open enrollment. They help companies automate enrolling their employees in benefits programs during open enrollment and qualifying life events.

Time and Absence Management

An HRIS allows team members and managers easy access to time management tools. Whether they need a day off for a last-minute doctor’s appointment or are finally planning that all-inclusive resort trip, a functional HRIS allows employees to request time off easily. Managers can view requests and approve or deny them based on the needs of the business.

HRIS systems can even streamline the processes of clocking in and out for hourly employees. Managers can see who has or has not checked in for their shift at a glance.

Talent and Performance Management

HRIS platforms help organizations of all sizes optimize their employee performance management. The right HRIS allows team members (and their managers) to set goals, view coaching and deliver and receive feedback. These items are essential for employee growth.

Types of HRIS

Companies use five different types of HRIS depending on their unique needs.

Operational HRIS

An operational HRIS collects and reports employee information and helps organizations deal with standard HR functions. Demographics, job classifications and position titles are the most common details for this system. For HR teams who spend too much time on repetitive tasks or deal with file disorganization, an operational HRIS might do the trick.

Tactical HRIS

A tactical HRIS helps with big-picture decision-making. HR managers benefit from this tool if they need assistance with recruiting, resources, training and job analyses. Organizations that choose a tactical HRIS often use it to make macro-level decisions for their limited resources. It is not ideal for those who need day-to-day support.

Strategic HRIS

Users of a strategic HRIS focus on future planning for the workforce. They want to know where an organization is going in the months and years ahead. Companies often employ strategic HRIS solutions when they have long-term goals like office space or new products.

Comprehensive HRIS

With a comprehensive HRIS, companies can streamline their databases and quickly review aspects of HR requirements. HR files, employee data and job analyses are at their fingertips. This system is a catch-all for storing or displaying any necessary HR information.?

Comprehensive HRIS programs often cost more and require more training, but the transformative effects on HR departments can make it worth the investment.

Limited-function HRIS

Companies that choose limited-function HRIS systems do so because their needs are concrete. A limited-function HRIS works well for smaller companies due to its cost and ease of operation. This system focuses on efficiency.

Who Are the Users of HRIS?

The answer to “Who uses an HRIS?” is complicated, but only because everyone in an organization is a technical user of the program. The people whose day-to-day work involves HRIS include:

• HR administrators.
• Payroll specialists.
• Talent management teams.
• Recruiters.

Because most of these roles involve regular hands-on work in the HRIS, those teams must be comfortable with the software.

How Much Does an HRIS Cost?

HRIS costs vary by features and platform, but some reports estimate an approximate monthly spend of $145 on HRIS. The average cost per user over five years is $8,750. Some companies with more employees spend upward of $11,200 per user over five years.

Common HRIS Examples

Within the HRIS space, companies can typically choose from three main types of software. They are:

1. HRIS: Human resource information systems that manage people, policies and procedures.
2. HCM: A human capital management (HCM) system that does everything an HRIS does, but with the addition of talent management and global features to facilitate multilingual team members, multicurrency transactions and localization options.
3. HRMS: A human resources management system (HRMS) can merge essential elements from the above two platforms. That includes policy management, language features and talent options.

What Is the Most Popular HRIS system?

The most popular HRIS system varies, but some of the HRIS systems that appear in multiple “best-of” lists include:

• Paycor
• BambooHR
• Workday
• ADP

The Future of HRIS

HRIS systems will likely continue their dominance in helping companies manage their people. HRIS solutions allow organizations to streamline some of the most frustrating and time-consuming parts of running a human resources department. The sheer number of HRIS programs on the market offers a wealth of choices for companies who want to pilot different platforms to see which best meets their needs.

Top Takeaways

What is a Human Resources Information System?

• HRIS platforms streamline many operations of a human resources department, including recruiting, onboarding, talent performance and payroll.
• HRIS platforms can be as complex or straightforward as a company desires.
• For larger companies, HRIS software costs an average of $11,200 per user over five years.

(Reporting by NPD)