The Human Resource Information System (HRIS) is a software or online solution for the data entry, data tracking, and data information needs of the Human Resources, payroll, management, and accounting functions within a business. It is useful for all processes that you want to track and from which you hope to gather useful and purposeful data.
Normally packaged as a database, hundreds of companies sell some form of HRIS and every HRIS has different capabilities. Pick your HRIS carefully based on the capabilities you need in your company. As HRIS has become increasingly sophisticated, the choice among the various systems has become enough to practically paralyze an HR department.
Watching a technology company, where computer experts exist, go through three different HRIS systems in ten years before finally settling on their current system, was an education in their complexity. Their capabilities on the job and in use rarely lived up to the sales hype which drove the choice. This is why choosing an HRIS is a major undertaking for a business.
Key Considerations as You Look at Your HRIS Options
The selection of an HRIS is a stressful situation as so many options exist. Picking the options that are best for your needs at your company is challenging. Wading through the information provided by each system is challenging, too.
The salespeople are often commissioned-salespeople who verbally may tell you that the system will meet your needs. Make sure you check this out with multiple sources including current customers, online discussion groups, LinkedIn, other SHRM members, and Google reviews.
These are the other factors to consider as you select your HRIS.
Number of Employees
Remember that even if your company is only a few people today, it may have twice that many or even 10 times that many employees in the future, so pick a system that can grow with your business.
Another key factor that you must consider is that many HRIS are able to accomplish only part of what you need automation to accomplish. In these cases, you will want to make certain that the components of any add-ons or additional systems work together flawlessly. Again, don't take the salesperson's word about the systems working together. Do your research to ascertain that they do.
Training and Support
Check also to see what kinds of training and ongoing support are available for your staff. You should also ensure that the sales consultant's promises about training and follow-up following the purchase are written right into your contract to purchase the HRIS. And, check with other organizations to make certain that your selected company has a track record of ongoing, helpful support. Many don't.
Expected Functionality of Better HRIS Choices
Typically, the better Human Resource Information Systems (HRIS) provide overall:
Management of all employee information:
Data such as names, titles, addresses, and salaries are a basic start. Salary and position history, reporting structures, performance appraisal histories, and other critical employee information.
This includes such items as employee handbooks, emergency evacuation procedures, and safety guidelines.
You will want benefits administration including enrollment, status changes, and personal information updating. In an ideal system, you can allow employees to look up and review their own information, including vacation tracking.
Complete integration with payroll:
This integration will also include other company financial software and accounting systems. When these are connected, you can ensure that paychecks are correct. There is never a disconnect between what the official pay rate is and the information that payroll has. If the systems don't integrate, it's easy to update a salary in one system and not in the other.
Applicant tracking and resume management:
When your system is seamless, the recruiter can click a hired button and all of the information from the applicant is transferred to the employee side of things. This saves so much time because your data entry and paperwork practically disappear.
If an applicant puts in his or her own information when applying, you can ensure accuracy. If the offer letter is generated out of the same system as the payroll system, the salary will match perfectly and there is no misunderstanding.
Performance development plans:
It's not just enough to have plans if they are recorded in a central system, then they can easily follow the employee from position to position. Senior leadership can run reports to see where people are and what their individual managers are planning in terms of succession planning for their futures.
It's important to keep track of who has been suspended, demoted, or had other negative actions taken against them noted—even after the employee leaves your organization. When a company calls and asks for a former employee reference, it's easy for an admin in the HR department to look up and report back whether or not the person is eligible for rehire.
This is especially critical in a company where certifications and licenses are required. In other companies, training records may not have that level of importance, but you may still find that having the information is useful as you develop your employees, a key factor that they want from work.
In summary, the HRIS that most effectively serves companies tracks this information:
- attendance and PTO use,
- pay raises and history,
- pay grades and positions held,
- performance development plans,
- training received,
- disciplinary action received,
- personal employee information, and occasionally,
- management and key employee succession plans,
- high potential employee identification, and
- applicant tracking, interviewing, and selection.
Benefits of the Right HRIS
An effective HRIS provides information on just about anything the company needs to track and analyze about their employees, former employees, and applicants. Your company will need to select a Human Resources Information System and customize it to meet your needs. If your company is on a growth path, choose a system that can grow with you.
It's fairly inexpensive to implement a basic HRIS, but make sure whatever you implement meets your company's actual needs. Do you want to be able to run turnover reports? Post organizational charts? Allow managers to electronically access previous performance appraisals? Do you want everything to have to be done through the HR department or would you like managers to access and enter the information themselves?
With an appropriate HRIS, Human Resources staff enable employees to do their own benefits updates and address changes, thus freeing HR staff for more strategic functions. Additionally, data necessary for employee management, knowledge development, career growth and development, and equal treatment is facilitated.
Finally, managers can access the information they need to legally, ethically, and effectively support the success of their reporting employees. They can run their own reports and enter plans into the system to help with succession.
The Human Resource Information System (HRIS) is a software or online solution for the data entry, data tracking, and data information needs of the Human Resources, payroll, management, and accounting functions within a business.
The Bottom Line
Normally packaged as a database, hundreds of companies sell some form of HRIS and every HRIS has different capabilities. Pick your HRIS carefully based on the current and projected capabilities you need in your company.