Deciding between an HRIS or point solutions? Here are the pros and cons of each and how they differ.
Software tools should make life easier, not add confusion and unnecessary processes. But too often, that’s the case because of a lack of integrations or a poor user interface. Sometimes it’s even the selection process that creates a headache. And when it comes to HR tech — a market expected to reach $10 billion by 2022 — it’s a safe bet that wading through the various options can be overwhelming.
One of the principal decisions HR leaders have to make is choosing between an end-to-end, all-in-one human resources information system (HRIS) or opting for best-of-breed, point solutions. The former offers a centralized place to handle most if not all facets of the human resources tasks. At the same time, the latter can provide flexibility for organizations in terms of budget and as a solution to specific pain points. Let’s look a little closer at the pros and cons of HRIS solutions.
What is an all-in-one HRIS?
A human resource information system (HRIS) is an intersection of human resources and information technology through HR software. This system allows HR activities and processes to occur electronically on a single comprehensive platform.
HRIS provides services directly related to human resources management and touches on accounting, management, and payroll tasks.
HRIS not only supports HR-related functions, but also helps with accounting and payroll.
What are the pros of an all-in-one HRIS?
Centralized solution for HR
An all-in-one HRIS gives HR professionals a central place to access employee information, automate otherwise manual processes, and make system-wide changes or updates. In addition, HRIS are designed as a single solution, so integrations are built-in. As a result, HR professionals won’t encounter challenges exchanging data between the system’s functions, such as employee onboarding information and management of general HR tasks, because the various parts exist in the same ecosystem.
Seamless end-to-end process and data flow
The system’s various functions can talk to each other, enabling more meaningful reporting and the opportunity for better data analysis. As a result, HR pros can get a more holistic view of the organization’s human capital and improve their ability to make data-driven decisions.
If you’re concerned about sensitive data, an HRIS might be a good solution.
Keeping sensitive employee data secure and private is one of your most essential tasks as an HR professional. It’s also a legally mandated regulation. A single HRIS supports compliance by minimizing the need for additional entry of could-be sensitive or personally identifiable information across various systems.
More convenient for employees
A single solution for your HR technology simplifies employee self-service. For example, employees can easily request time off, make benefits selections, or adjust personal information through the centralized system.
Familiar and connected feel with your HR technology
HR team members develop great familiarity with their HRIS because they use the system for most HR-related tasks. Unlike point solutions, where some are used less than others, HR pros build a familiar and connected feel with the HRIS.
Cons of an all-in-one HRIS
Higher price point
There will be acquisition and maintenance costs with any new software solution, but for a holistic platform like an HRIS, the upfront investment tends to be a little higher. These may be difficult to shoulder, especially for smaller companies.
Since an HRIS bundles various HR functions and information systems into one solution, HR teams won’t have the opportunity to choose a specific solution for pain points or use cases.
Small companies without a dedicated IT department may have to hire an individual to support the installation and manage the system.
Pros of point solutions — an alternative to all-in-one HRIS
Point solutions are technological solutions that typically focus on one or two human resource functions. For example, a vendor offering a payroll solution likely offers benefits selection and administration. Here ares some of their pros:
Since you’ll be enlisting several point solutions to cover the spectrum of functionality needed by HR, point solutions can provide more flexibility. HR teams can select a system with more functionality for, say, payroll and benefits, and opt for a pared-down solution for time tracking and attendance, for example.
If your organization is just looking to solve a specific problem, point solutions can be a more cost-effective way to do so than an HRIS — as the price point for the single software tends to be lower.
If your organization is just looking to solve a specific problem, point solutions can be a more cost-effective way to do so than an HRIS.
Since vendors only focus on niche functionality, point solutions can bring best-in-class features with deep functionality for one specific HR process.
Cons of point solutions
Lack of integrations
Many off-the-shelf point solutions will lack the integrations you need to share information between systems. There may be integrations available, but these often come at an additional cost and feel like a band-aid solution.
Multiple systems and multiple vendors
Using point solutions to cover your HR processes can easily result in three or four systems, which means HR teams will need to manage multiple systems and juggle numerous vendors.
Lack of visibility and piecemeal reporting
Without a centralized, single solution for your HR processes, HR teams lack 360-degree visibility into system data. Reporting can be more difficult, too, as often reports have to be requested or run then collated separately.
The bottom line — all-in-one HRIS solutions
Your HR technology should streamline processes and support efficiency across your people team. An HRIS centralizes information and provides a single hub to manage the tech side of human resources, while point solutions offer flexibility and a lower upfront cost.
The needs of a business are as unique as the business itself, and there is no one-size-fits-all approach. Talk to one of our team members today to learn more about how Zenefits supports small and mid-sized businesses in handling all their HR needs.