HR 101: Human Resource Information Systems (HRIS)August 10, 2022
Explore what a human resource information system (HRIS) is and how to choose and implement the right one for your organization.
As technology rapidly advances, more and more processes within traditional HR teams have had to innovate to keep up. One particularly helpful shift has been the use of a human resource information system (HRIS). A key contributor to larger human capital management (HCM) initiatives, HRIS systems combine the innovations of Information Technology (IT) with HR practices to make storing and retrieving employee information easier.
What is an HRIS?
The Society for Human Resource Management (SHRM) defines HRIS as, “…a software application used to store employee information and support various human resource functions, such as benefits, payroll, recruiting, training, etc.” Acting as digital record-keepers, HRIS platforms replace the fields of file cabinets full of personnel records with a streamlined database that is easily accessed and updated. They can automate required processes, such as I-9 verification, and allow users to quickly update their direct deposit information, benefits elections, etc.
HRIS vs. HRMS vs. HCM
One important note is the difference between an HRIS, human resource management systems (HRMS), and human capital management (HCM).
- HRIS: Originally focused on administrative tasks, such as completing payroll processing or maintaining compliance, without regard for other talent management needs, such a performance reviews or recruiting. Over the last several years though, more robust HR information systems have been introduced, which take on those additional talent-based practices.
- HRMS: Originally created to fill the gap of HRIS technology and focus on people management tasks. While HRIS platforms have evolved to include this functionality, some still refer to HRIS systems as HRMS.
- HCM: Both HRIS systems and HRMS systems fit under the concept of Human Capital Management (HCM), which is the broader, strategic approach to acquiring, managing, and developing employees throughout the employee lifecycle. Given the greater scope, range of subjects, and depth of impacts, HCM is a more complex topic than either an HRIS or HRMS, but when fit together properly, they all can work together like pieces of an engine to drive an organization’s success.
Key Functions of an HRIS
As a suite of tools, HRIS software often contains a robust set of features covering core HR administrative duties. You’ll likely find an HR information system that includes at least some of the following functions:
- Payroll – Payroll processing, managing payroll taxes, wage garnishment, and more.
- Core HR – Essential HR functions, documentation management, employee self-service portals, HR workflows, and compliance monitoring.
- Benefits administration – Services that help your employees receive benefits, including open enrollment, and interface with third-party benefit services.
- Employee time tracking and scheduling – Employee shift and scheduling management, which often funnels directly into the payroll system.
- Talent management – Automation and assistance with critical tasks throughout all stages of the employee lifecycle, from recruiting to onboarding and employee development.
- HR analytics – Less frequently, HRIS systems have some amount of reporting capabilities to monitor key HR metrics. The more advanced tools even use AI to help generate customized insights based on the data the platform captures.
- Employee experience tools – More modern HRIS include functions aimed at enhancing the employee experience, including peer-to-peer recognition, employee surveys, and social collaboration hubs.
Regardless of how many possible features are available, a quality HRIS should be able to adapt its offerings and include only the most necessary tools based on each organization's unique need.
Benefits of HRIS Systems
Streamlined data and processes
At its core, an HRIS is intended to help manage employee information within an organization’s defined structure or hierarchy. It does this by streamlining the entry, storage, and access to multiple types of data, including:
- Applicant and candidate recruiting data
- New hire onboarding data
- Employee compensation and benefits information
- Time off and attendance information
Automation and accuracy
The ability to automate tasks also saves time for HR teams, freeing them to focus on strategic initiatives that matter. Automation also reduces the risk of human error by reducing manual data entry.
Most HRIS systems will include self service portals that enable employees to log in, update, and verify information themselves, with some going so far as to offer mobile app versions of the tools as well.
There are also compliance benefits to having a solid system of record in place where employees can easily find completed training courses, governmental forms, and employment agreements in case of an audit. This also includes faster and easier distribution of updated policies to employees for similar compliance purposes.
Enabling HR as a strategic partner
Some HRIS platforms will also include features for building, running, and analyzing reports based on the data they maintain, but this is a less common offering compared to the tools listed above. The systems that offer reporting and analysis features can provide HR teams with valuable real time data that can aid overall HR planning and strategy.
Why are HRIS Systems Important?
HRIS systems are crucial for modern organizations to maintain efficient and accurate operations. An HRIS can reduce manual administrative burden and automate workflows, while more advanced platforms also enhance the way teams interact with each other through employee experience capabilities. All of this enables HR teams to spend more time on strategic initiatives that build culture and community throughout their organization.
As shown by Amazon, not having a unified, integrated HR information system in place can lead to disaster. Organizations of all sizes should recognize how important it can be to invest in an HRIS, the profound benefits such a platform can have, and how to properly choose and implement the right system.
How to Choose an HRIS
Choosing the right HRIS for an organization can be a daunting but rewarding task. In theory, the system is going to impact every other group and user within the business, so it needs to be powerful enough to handle all the data being entered while also intuitive enough that it is easy to use for anyone who logs in. Moreover, it needs to have a customized assortment of tools based on a particular organization’s unique needs. Bearing this in mind, there are several steps organizations should use when selecting an HRIS, so to summarize:
- Choose the agent(s): Pick whether the investigation and exploration process should be done in-house or by a third party. Evaluating a potential HRIS system can be complicated based on your setup, so determine if you have the internal resources or need external assistance.
- Define user needs and identify project limits: Before exploring the different options available, find out what the business really needs and the impacts of those needs across the organization. Also determine what bandwidth, technical infrastructure, and financing the organization has.
- Uncover HRIS candidates: Even the most basic of internet searches will return several viable HRIS options, so the exploration can sometimes require multiple rounds of finding, refining, and narrowing down the contenders. Some additional aspects to look for can include:
- Level of compliance tracking and updates
- Track record in the organization’s industry
- Implementation methodology successes
- Privacy and security features
- Customer service approach and history
- Flexibility for customization and future updates
- Form the selection committee: Create a cross-functional group who will make the ultimate recommendation to executive leadership. Include members from a number of departments, including IT, HR, and any other impacted stakeholders that oversee operations.
- Submit proposal requests: The committee should first send out requests for proposals to the list of finalist vendors. The request should ask for a price point that can be held for 3-6 months, the software’s minimum technical requirements, information on the vendor itself, and an implementation schedule.
- Set up a demonstration: Organize live demonstrations from the top contenders with every committee member in attendance. Use the list of needs from step 2 above to help craft questions, and at least a few should ask how the HRIS platform would have handled actual scenarios the organization has experienced. Remember, the purpose of the demonstration isn’t to see how powerful or fancy the platform is, but how well and easily it fits the organization.
- Make the call: The committee should meet a few more times to debrief from the demonstrations, organize any follow up requests (client references, on-site visits, etc.) and create the final recommendation report to executive leadership.
How to Implement a New HRIS System
Successfully implementing a new HRIS into the organization’s existing systems can be equally as demanding and involved as choosing the software in the first place. Like that selection process, there are multiple steps in the implementation process, which include:
- Pick the team: HRIS vendors will normally provide a liaison or team to work with an organization to get the platform customized, installed, and operational. It is helpful for the organization to also have an internal team that further aligns and facilitates this process, including members from IT and HR who will be working in the software the most.
- Design a roadmap: The teams should draft designs of the organization’s current procedures and the requirements involved. The designs should emphasize functional and technical needs, and any potential integration challenges with the current system.
- Test the platform: The organization should next create a group of tech-savvy beta users to test the new software and provide feedback, before next asking a small group of regular employees to also give their thoughts.
- Inform and train users: When ready, the new platform should be revealed to the rest of the organization along with training aides, FAQs, walkthrough sessions, etc. The goal should be to make the transition as easy and painless as possible for all employees so they can immediately use the new tools upon launch.
- Launch the system: After everyone has had time to familiarize themselves with the new platform, permanent roles for maintaining the software are in place, and there are clear methods for providing feedback or reporting issues on the software, the organization can roll out the new system for use. Ideally the HRIS vendor will also provide a permanent liaison or team to handle any service requests or operational issues that arise.
Is Paylocity an HRIS System?
Yes, Paylocity is an HRIS system, but also has HRMS and HCM software capabilities. Our platform not only automates manual HR tasks, but also has the functionality to help organizations achieve larger HCM goals, including retaining talent and fostering connection amongst employees. Paylocity is the only HRIS designed with the employee experience in mind and one that includes a full suite of tools catered for the entire employee lifecycle.
Request an HRIS demo today to learn more about our platform.
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