What Is an HRIS? A Concise Guide on How to Choose One

By Indeed Editorial Team

Published 15 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A human resources information system (HRIS), also sometimes called human resources information software, is a useful tool that can help businesses manage various human resources processes. Using such softwares can save time, resources and money by keeping all documents and procedures together in one digital location. It's important to consider several factors when choosing an HRIS to ensure it meets the company's needs and budget. In this article, we explain what an HRIS is and why it's important, explore some key features and provide some steps to help you choose the right system.

What is an HRIS?

An HRIS is a type of software that companies use to electronically manage all of their human resources systems and processes. These systems help businesses monitor recruitment life cycles, record employee performance and manage payroll and benefits in a single electronic space. Many vendors offer different types of systems to suit various company sizes and needs. You can also customise a system to fit in more specific company requirements.

Why is an HRIS important?

An HRIS can help standardise procedures and store HR information in an easily accessible place. Here are some key reasons why these systems are important:

  • Saves time and money: Using such a system for most or all of your human resources and accounting needs can consolidate your programmes and software, saving money. It can also help employees save time since they only use one system to perform their HR and accounting tasks.

  • Allows employees to access a variety of information: All employees can use such a system to look for policies, request time off and complete their performance reviews.

  • Organises data: HR departments can process and store a lot of important data about employees, which the system can organise and do so securely.

  • Improves employee experience: Such a system can simplify the onboarding and other employee processes, hence increasing employee satisfaction.

  • Sends regulation and policy updates: If HR wants to update employees on any new policies or guidelines, they can upload all of the information into this single system for all employees to view at any time.

  • Oversees benefits and payroll: With this kind of system available, HR professionals and company executives can oversee and manage payroll and benefits to ensure employees receive payment on time and that they can access their benefits packages easily.

Related: What Is Human Resources? Definition and Examples

What features do these systems have?

When considering incorporating one such system in your organisation, you can look for the following features:

Recruitment

While recruiting, HR professionals often track many candidates through a multi-step hiring process. An effective recruitment system allows HR professionals to quickly source candidates who meet the job requirements. HR representatives can also store all candidates' information in an HRIS and easily access it anytime throughout the process. Retrieving and comparing candidate information within one system can help HR representatives make objective hiring decisions more quickly and fill positions effectively. Hiring better candidates can increase company cohesion and reduce turnover.

Related: What Is Talent Acquisition? (With Steps To Hire Talent)

Onboarding

An effective onboarding programme is key for making new hires feel welcome and getting them acquainted with their team and duties. The HR department and team supervisor can track onboarding progress in your system, ensuring each new employee receives the proper training for their role. It can also help you standardise onboarding for all new hires so they receive the same information about the business. With better cohesion and easily accessible standardised communication, new hires may feel more comfortable in their roles and assimilate into company culture and daily schedules more quickly and efficiently, increasing productivity.

Related: What Does a Human Resources Manager Do? (With Skills)

Employee performance review

Employee performance reviews track progress and identify areas where team members can learn and advance in the company. You can use such a system to keep detailed records of all performance reviews and easily revisit past ones when determining raises and promotions. You can create and store a review template in the system to be easily accessed by everyone. Employees can input their own targets achieved and forward them to their respective supervisors to comment on.

Time tracking

One key feature of most HRIS is tracking employee work hours and paid time off. Employees can view their hours and pay and request time off in the system. HR representatives and employee supervisors can then use the system to review the hours and approve requests for paid time off.

With all requests taking place in a single system, it becomes easier for supervisors and executives to track and manage time off, reducing gaps in shift coverage and preventing potential overlaps in time off. The system can also show employees how much paid time off they have in their accounts.

Payroll and benefits

Tracking payroll and benefits for employees is an important function of the HR department, and a good HRIS can help manage these important components. The system can assign payroll and benefits to each employee, provide a login portal for employees to view their benefits and pay, and ensure that the company pays wages on time. The system also manages retirement programmes and other benefits with easy self-service for employees. You can also use the system to cancel, update or remove certain benefits and pay packages when necessary.

Related: What Does Human Resources Do? 11 HR Roles and Responsibilities

Employee self-service

One of the most important functions of having an HRIS is the provision of a self-service portal for employees. Employees can view, manage and request changes to wages, benefits, time off and other information from this software. This allows employees to have constant access to their employment profile and removes the hassle of having to request such information from the HR department. The HR department can also store documents, like employment agreements, in the system for easy employee access.

How to choose the right system

If you're looking for an HRIS for your company, here's how to find the right system:

1. Review your organisation's HR needs

The system you choose depends largely on the specific HR needs of the company. For example, if you only need a payroll management system, you may not need an entire information system. Consider the specific needs of your HR department and the various HRIS features you may need. The larger your organisation, the more HRIS features you may need.

2. Determine your HR budget

Typically, getting an HRIS entails a financial commitment. It's important to ensure the company budget can support the added expenditure. Analyse the budget of your HR department to determine the kind of HRIS you want to purchase. Research different platforms to compare prices and find the right platform that meets your budget and specific needs.

Related: How to Become a Human Resource Manager (with Skills)

3. Try a few product demos

Many companies allow you to try out their systems without any commitment. Using a product demo or trial phase can help you learn a system's features without committing too quickly to one platform. When you're shopping for the right system, try asking vendors if they offer a trial period or product demo that you can try before committing to the purchase. This can help save the company time and money and ensure that you're using the right platform for the HR features your company needs.

4. Prepare for the transition process

Transitioning to a new HR management platform can take some preparation. The system can completely change how the company manages its HR department, personnel requests, benefits and wages. You can start by giving advanced notice to everyone in the company that a switch may occur. Train each HR professional thoroughly on the new system once you commit and offer training to employees who want to use the system.

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