What is an HRIS System and How Can It Help Cut Costs?

Learn more about the benefits of using HRIS systems, including streamlining your business’s HR functions, freeing up time, and saving money.

what-is-an-HRIS-system-and-how-can-it-help-cut-costs
HRIS systems can help small businesses with onboarding, payroll, compliance, and more

HRIS stands for Human Resource Information System, and it is a software package. These systems integrate your HR activities with information technology so that you can store, track, and manage all sorts of HR, payroll, and accounting data. It’s a fairly simple concept, with the potential to make an enormous impact on your business (in a very good way!).

Most larger businesses with in-house HR departments use an HRIS of some kind. However, small and medium-sized businesses who don’t have the resources to devote to a full-time HR manager might not be familiar with these systems. If you run a business and you’re looking for a way to streamline HR, cut costs, and free up more of your time, then read on to learn how HRIS can help.

What does an HRIS do?

An HRIS helps companies organize and manage HR-related data. These might include:

  • Onboarding documents for employees, as well as resumes and applications collected from prospective hires
  • Employee demographic information, such as a social security number, date of birth, contact information
  • Information about the employee’s job. This might include their job title, supervisor, department, and salary
  • Payroll information for each employee, such as pay rate, pre-tax deductions, withholdings, direct deposit information, hours worked
  • Employee benefits selections
  • Time-off requests and balances
  • Scheduling information and hours worked

The HRIS software stores all of this information in one place, giving you a single source of accurate HR data. This helps your business in a few ways. First, it keeps you in compliance with state and federal laws that require you to maintain certain documents for all of your employees. It also allows you to run reports that can inform business decisions and help you plan for various scenarios. In addition, it streamlines your HR department so that you can spend less time and money on this function.

How can I streamline my HR?

By storing and organizing all of your HR data, HRIS systems streamline every HR function in your company.

Hiring

When your company uses an HRIS system to collect and store hiring information, you can digitally track applicants and recruitment efforts. This way, you don’t have to assign an employee to organize and maintain all of this information using paper applications and filing cabinets.

Furthermore, your applicants no longer have to fill out countless forms, writing out the same demographic information by hand over and over again. With an HRIS, they can apply for positions online and enter information once, and the data will automatically pre-populate every necessary form.

Onboarding

HRIS systems take the onboarding process from dull and cumbersome to simple and efficient.
HRIS systems take the onboarding process from dull and cumbersome to simple and efficient. The entire process is paperless and completed online. Once you’ve made a hiring decision, all of your forms and orientation materials are sent to new hires instantaneously. There is no need to schedule an onboarding meeting between the new employee and HR. Employees can simply complete the process at their own pace, asking questions as necessary.

Training

With an HRIS system, training is often done via videos that employees watch individually. There is no need to coordinate schedules with every employee so that you can conduct in-person group training.

Compliance

The HRIS creates an electronic “paper trail,” which makes it easy to prove when you delivered, reviewed, and accepted certain legally mandated materials. Proving that paperwork has been delivered and signed is harder with manual systems, as papers can get lost or damaged. In addition, when it comes time to submit compliance reports to government agencies, you can simply press a button and the HRIS will create one for you.

Paper elimination

If you use a paper system for HR record keeping, you probably have confidential employee information printed and stored in several places. So when it’s time to dispose of that information, you have to hunt down all that paperwork and spend time shredding it. But if your information is digital, you can easily round it up and delete it with the push of a button.

How can I cut HR costs?

When you employ an HRIS system, you store all of your information electronically. This can save company costs in a couple of different ways:

  1. It reduces the need to buy certain materials, like paper, ink, filing cabinets, and other office supplies
  2. It reduces staffing needs because HR processes are quicker and require fewer hours

How can I digitize my HR department?

Going from a paper system to a digital one can feel a little intimidating; it takes a lot of work to make the transition. That’s why it’s important to first get all of your employees on board. Show them the benefits of a paperless HR department, and be sure to convey your own personal enthusiasm for a new, digital system.

You’ll want an HRIS system with an intuitive user interface, seamless integration with any software you already use, and good customer service.

Next, you’ll have to choose a software provider and get your staff trained. You’ll want an HRIS system with an intuitive user interface, seamless integration with any software you already use, and good customer service. This can be a tough choice, so we have some tips to help you make your decision. Find them here.

Of course, you will have a backlog of paperwork that must be scanned into the new system. But right from day one, you should collect all new information via the new HRIS software. You can create a schedule to work on the backlog over time, but don’t create more backlog as you go.

How can I cut payroll administration costs?

The reason that payroll administration is so expensive is because it takes so many human working hours to do. When you use an HRIS system for automated timekeeping, you reduce your administrative expenses significantly.

Most larger businesses with in-house HR departments have been using HRIS systems for years. It saves them time, money, and headaches. Small and medium-sized businesses can put themselves on the same level by using an HRIS to streamline HR, cut costs, and free up time. Let the software do the busy work so that you can spend more of your time doing what you do best  — running your business.

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