What Is an HRIS, and Exactly How Is It Valuable?

HRIS can be confusing, but there are ways to help. Does your HR role involve manual data entry? Are you drowning in onboarding and payroll paperwork? Do you want to focus on strategic planning and less on administrative work?

If you answered “yes” to any of the questions above, a HRIS could be the solution you’re looking for.

What is a HRIS?

A HRIS (Human Resource Information System) is a human resource software which unifies HR management processes such as hiring, benefits administration, and payroll into one electronic system. The technology behind a HRIS helps eliminate manual administrative work, automates HR management, and becomes the centralized system of record for all HR-related information.

HRIS is also synonymous with the following:

• HRMS (Human Resource Management System)
• HRMIS (Human Resource Management Information System)
• HCM (Human Capital Management)

What’s the Value of a HRIS Software Tool?

Time-savings and cost-savings – that’s what you’ll get with a great HRIS or HCM, according to a 2017 report from Nucleus Research.

“Over the past three years Nucleus has analyzed numerous implementations of HCM technology and found that cloud deployments deliver 2.9 times return on investment (ROI) at SMBs employing 3,000 or fewer in staff,” writes analyst, Brent Skinner. “The research also strongly suggests that most SMBs make do for far too long with aging systems for HCM – or, worse, little more than spreadsheets and email.”

So, if you’ve been using spreadsheets to track employee data, and emails to communicate things like payroll and benefits changes, there’s a good chance you’re missing out on the efficiency that HCM can offer.

“Modern technology for HCM also successfully automates much of human resources (HR) (and not all cloud-based HCM technologies do an equally good job of this),” notes the Nucleus report. As a result, it’s “the antithesis of spreadsheets and email, the extent of technology that most of the balance of SMBs use to carry out HCM.”

How to Choose the Right HRIS

Now that you know what a HRIS is and the ROI of having one, the next step is matching a HR software with the needs of your business. And like most things in life, there isn’t a one-size-fits-all solution. Depending on your company’s budget and needs, some HRIS solutions may be better than others.

To help you get started, PCMag suggests looking at the following four elements to each HRIS that you’re considering:

• User Interface (UI): Is it easy-to-use/intuitive?
• Integration: Does it easily integrate with other programs you have to/want to use?
• Scalability: Will the HRIS scale as your company grows, or does it have limitations?
• Service: If you run into issues with the software, will your vendor’s level of service meet your needs?

Once you’ve asked these questions, you’ll be one step closer to nailing down the right HR software for your company.

Ensuring Your HR Software Offers Benefits Administration

Benefits administration can be a pain for a HR manager to handle solo. Just think about it: For each new hire, there’s the selection and enrollment process for medical, life insurance, commuter benefits – and more, depending on what your company offers. That’s a lot of time-consuming and tedious work just to register employees into each of these benefits.
That said, finding a HRIS that offers benefits administration is critical.

PCMag adds that a “[benefits administration] software should do two things: it should make it easy for HR administrators to choose and customize plans, and it should make it even simpler for employees to register for those benefits via an automated enrollment process as well as easily access their benefits and insurance information.”

With a HRIS, HR managers and employees should describe the benefits enrollment and administration process as “easy” and “intuitive” versus “frustrating” and “difficult.” And more importantly, employees should come out of the process with confidence that their benefits are taken care of.

HRIS for Business Intelligence Reports

Looking to gain more workplace insights for strategic planning? A HRIS can help with that, too.

Because HR software collects personal employee information through various HR tasks like onboarding and payroll, information such as gender, pay, ethnicity, and age (among many other things) are stored within the HRIS and can be used for workforce insights.

For example, business intelligence reports from a HRIS can look into areas such as:

• Diversity within the workplace
• Gender pay equality
• Turnover
• Headcount

The Takeaway

A HRIS is more than just a database of employee information. It’s a solution to the manual (and often mundane) work that HR managers have to deal with on a daily basis.
Even if you think your company is running fine with your current HR processes, do your due diligence and spend some time looking into the different types of HR software available. You might be surprised by how much time and money you can save with a HRIS.