Key Takeaways
1. An HRIS or human resource information system, is necessary for most large companies. An HRIS is a software solution that maintains, manages, and processes detailed employee information and human resources-related policies and procedures. It facilitates accurate recordkeeping and reporting.
2. It is a platform designed to improve workforce management. The system combines automation, data, and centralization.
3. While some companies may run the HRIS as part of their technical infrastructure, it is often based in the cloud. Therefore, the HR software runs outside of the company’s premises, making it easy to update.
Many HR employees are delighted not to have all their company’s information on employees scattered across dozens of spreadsheets and hundreds of files. By using an HRIS, all this information can be stored in a centralized system.
In this article, we explain what HRIS stands for, how it compares with other related terms, the benefits of HRIS for your organization, and the core functionalities of HRIS systems.
What is HRIS software?
HRIS stands for ‘Human Resource Information System’.
From a structural perspective, HRIS includes roles, functions, and reporting hierarchies. By defining the organizational structure, HRIS provides recognizable accountability and a pathway for operational functionality and consistency.
The right HRIS platform helps you address business challenges by helping you put the right talent in place. Through the consistent, automated management of acquisition and recruiting data, your HRIS can help you build a workforce that has the right people with the suitable skills, working in the proper functions and under the right structure, to meet your strategic goals.
To read about other software that could help you manage your distributed workforce, check out our guide to the best software tools for your remote team.
What is the difference between an HRIS, HRMS, and HCM?
HRIS, HRMS (human resource management system), and HCM (human capital management) are terms often used interchangeably due to their shared products and systems. They are all cloud-based software. However, strictly speaking, there are some differences between the three.
The characteristics of the three systems are as follows:
- HRIS is the most basic of the systems. It is a software or platform used to collect employee information and manage HR processes.
- An HRMS, or human resource management system, includes the basic features of an HRIS, and other features for tracing time and payroll. It is suitable for businesses with mostly hourly wage workers.
- HCM or human capital management is considered the most comprehensive option of the three. It builds on the essential functions of an HRIS with a wide selection of products dedicated to tasks such as learning and development and succession planning.
An HRIS system makes it easy for managers to store and retrieve employee data, including:
- Contact information
- Salary
- Education
- Date of birth
- Tax information.
What are the benefits of HRIS?
There are many benefits to having an HRIS that holds all employee information in one system that is easily accessible. HRIS benefits include:
- Simplifies recordkeeping
- An HRIS can keep track of changes related to employees, such as their pay scale and address.
- Compliance
- Some data is collected and stored for compliance reasons. This includes material for identifying employees in case of theft or accidents. It is stored according to GDPR regulations.
- The GDPR is a wide-ranging data protection law that may apply to any business dealing with individuals in the EU. Managing international human resources, means companies need to think about what counts as personal data and the roles and responsibilities of controllers and processor, to ensure employee data is managed compliantly.
- Efficiency
- The HRIS system is more efficient than keeping employee data stored in paperwork in filing cabinets.
- HR Strategy
- If your company wants to update its HR policies and strategy, the HRIS permits the tracking of data required to advance your HR strategy.
- Self-Service HR
- Some companies use a self-service HRIS that is available to employees and managers so that employees can manage their own data: including promotions, raises, vacation time, and other personnel matters.
- As your company grows, stay organized
- An HRIS centralizes your information into one organized platform as your company expands.
- HR managers can spend their time on strategy
- Research shows that HR managers who don’t have fully-automated systems lose 14 hours a week handling paperwork.
- Improve management decision-making
- You can track behaviors and trends and identify cost-saving initiatives via your HRIS, to improve the speed and efficiency of your decision-making.
Video: Overview of HRIS platforms
In this video David Caughlin, Daimler Trucks Professor of Analytics at Portland State University, explains how HRIS platforms work, and how they relate to HR analytics.
What are the core functionalities of the best HRIS systems?
You can install an HRIS with an array of different functionalities. Among them are:
- Applicant Tracking System (ATS). This software manages your company’s recruiting, tracking candidate information, resumes, and other information. It helps guide the hiring process by enabling recruiters to match job openings to suitable candidates. An ATS can help you answer questions such as:
- Which talent source supplies the best candidates?
- Does our selection process foster diversity?
- Is retention an issue in specific departments?
- Payroll- The HRIS can automate the payroll implementation process for employees.
- Employee benefits – Your HRIS can store all the benefits management information for your employees. Some advanced systems offer a “cafeteria model” – or an employee self-service model for benefits, wherein workers can select the benefits they need.
Other common features of HRIS are modules that gather information on Time and Attendance; Training; Performance Management; and Succession.
All companies with an HRIS in place should consider specialized HRIS training, and having HRIS analysts on staff.
HRIS systems are transactional systems. They record a company’s transactions related to employees: e.g., when an employee joins a company or gets a promotion. As a result, some experts state that these systems are inadequate at data reporting and analytics: They advise that a new layer be added on top of all your HR systems specifically designed to analyze the HR data.
It is worth considering this when you choose the HRIS that is best for your company: There are thousands of HRIS systems to choose from – your company should select the one that suits your organization’s needs.
When should you get an HRIS?
If your company has more than 100 employees and managers are finding that they are spending too much time on manual reporting and spreadsheets, then you may be ready for an HRIS system. Another warning sign is that your HR team is spending too much time on repetitive tasks, or you lose talented employees because of disorganized hiring. You know you need data-driven insights to improve your team, so your company can improve its efficiency by going to an HRIS system.
Is it worth integrating top HRIS systems with IT?
Some tech experts believe that the next step for HRIS systems is integrating them with your IT systems. If data from each department is kept siloed, it is not as valuable for your company as it would be if the systems were integrated.
According to one expert, that goal is achievable by focusing on the bridge that connects HR and IT: identity.
Using identity as a bridge allows organizations to unlock the full potential of HRIS and IT solutions without sacrificing efficiency or organizational security. It means HR can fluidly manage the entire employee journey—from onboarding to positional changes and offboarding. At the same time, IT can ensure strict access control while delivering a high-quality employee experience. Employees get what they need, when they need it, without downtime and by relying on a primarily self-service model.
Coordinating HRIS and IT directories builds on the goals of both teams. Consider integrating the two to unlock the value of your tech stack and extend the value of the data inside it. The result is a premier employee experience that enables access to IT tools and that sets staff up for productivity and success.
Horizons deploys top HRIS software
If your company isn’t ready to invest in a capital expenditure like an HRIS system, consider working with Horizons — a top international recruitment and hiring company, with its own HRIS. Whether you are hiring employees in the US or around the world, Horizons can manage your employees for you through its HRIS. Horizons’ all-in-one cloud-based HR and payroll software simplifies how you manage your international workforce.
Our solution gives you secure access to your employees’ data, as well as expert support through a dedicated, single point of contact. This ensures you maintain employment compliance on a local and global scale.
Frequently asked questions
HRIS is a human resources information system that collects and stores data on an organization’s employees.
While some companies may run the HRIS as part of their own infrastructure, it is more often to be found based in the cloud.
Some examples of HRIS are systems made by Rippling, Paycor, and Bamboo HR. Each system offers features such as applicant tracking, compensation management, and time and attendance. Your company should choose the system that works best for your needs.
The HRIS you choose should be capable of covering all aspects of HR management, including recruiting, succession planning, and an HR help desk.
