What Is an HRIS? A Definitive Guide

By Indeed Editorial Team

Published November 23, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A human resources information system, also sometimes called human resources information software, is a useful tool that can help businesses manage various processes in different departments. Using an HRIS can save time, resources and money by keeping all documents and procedures in one digital location. It's important to consider several factors when choosing an HRIS to ensure it meets the company's needs and budget. In this article, we explain what an HRIS is, explore some key features and offer some steps to help you choose the right system.

What is an HRIS?

An HRIS is a type of software that companies use to manage all of their systems and processes electronically. These systems help businesses monitor recruiting life cycles, document employee performance and manage payroll and benefits in a single electronic space. Many vendors offer different types of systems that are ideal for various company sizes and needs. You could also have the option of customizing an HRIS to fit more specific company requirements.

Related: Human Resources: Definition and How It Works

Why is an HRIS important?

An HRIS can help standardize procedures and store documents in an easily accessible place. Here are some additional reasons why these systems are important:

  • Save time and money: Using an HRIS for most or all of your human resources and accounting needs can consolidate your programs and software, saving money. It can also help employees save time since they only need to use one system to perform HR and accounting tasks.

  • Allow employees to access a variety of information: All employees can use an HRIS to look for policies, request time off and complete their reviews.

  • Keep data organized: Human resources departments process and store a lot of essential data about employees, which an HRIS can keep organized.

  • Improve employee experience: An HRIS can simplify the onboarding and employee review process, which can increase employee satisfaction.

  • Send regulation and policy updates: If HR needs to update employees on any new policies or guidelines, they can add all of the information to an HRIS so employees can review it anytime.

Related: Learn About Being an HR Manager

What features does an HRIS have?

When considering an HRIS, you could look for the following features:

Recruiting

While recruiting, HR professionals often track several candidates through a several-step hiring process. An effective recruiting system allows HR professionals to quickly source candidates who meet the job requirements. HR representatives should also be able to store all candidate information in an HRIS and easily access it throughout the process. Being able to retrieve and compare candidate information in one area can help HR reps make objective hiring decisions.

Related: 13 Essential Human Resources Functions

Onboarding

A detailed onboarding program is key for making new hires feel welcome and getting them acquainted with their team and duties. Both the HR department and team supervisor can track onboarding progress in an HRIS, ensuring each new employee receives the proper training for their role. An HRIS can also help you standardize onboarding for all new hires so they all receive the same information about the business.

Employee review

Employee reviews track progress and identify areas where team members can learn and advance in the company. You can use an HRIS to keep detailed records on all reviews and easily revisit past reviews when determining raises and promotions. To keep all employee reviews uniform, you can create and store a review template in an HRIS.

Related: The 8 Functional Areas of Human Resources

Time tracking

One key feature of most human resources information systems is time tracking, including hours worked and paid time off. Employees should be able to review their hours and pay and request time off in an HRIS. HR reps and employee supervisors can then use an HRIS to review the hours and approve PTO requests.

Payroll and benefits

Most HR information systems track payroll and benefits, such as 401(k) contributions, which makes it easier to compare hours worked to paychecks. Employees should also be able to review their benefits in an HRIS and make changes. For example, an employee could change their health insurance plan in an HRIS.

Employee self-service

Many HRISs have an employee self-service portal where they can make changes to their information, like their mailing addresses, and request documents, like paystubs. Being able to make changes and find documents in an HRIS can save time since employees know exactly where to look rather than contacting different departments.

Some systems also offer goal-setting capabilities, where employees can set professional milestones and update their progress. This feature is useful for employees and supervisors who want to track performance and determine if the employee should get a raise or promotion.

Related: How To Get a Job in HR (and Tips To Qualify Without Experience)

How to choose an HRIS

If you're tasked with choosing an HRIS, you can follow these steps:

1. Review your organization

Take notes on the main elements of your business to see how you could use an HRIS to improve these areas. Speak with department leaders to learn more about what they would like from an HRIS. You can also review each department's processes and how you can integrate them into an HRIS. Once you have some basic ideas about departments' expectations and processes, you can form an outline of the goals you would like for your system.

2. Determine your needs

Get specific with your needs to find an HRIS that works best for the company. Consider the following:

  • Company size: A simple system might be enough for a smaller company, while a large company could benefit more from a detailed system.

  • Necessary features: An HRIS can include many features, so it's important to list the ones you need and the ones that would you want bur are optional.

  • Current systems: Determine if the HRIS is going to replace all of your current systems or supplement what you already have.

3. Prepare a budget

A budget can serve as a guide when you explore systems. When creating a tentative budget, consider your current technology and if it needs upgrades to accommodate a new system. You can also account for any onetime and ongoing fees that an HRIS could have. Most HRIS vendors charge recurring monthly fees based on the number of employees using the system. Another consideration is the time needed to train employees in the new system and potential loss of productivity during this time.

4. Contact vendors

You can find numerous HRIS vendors that all offer systems with various features at different price points. Make a list of vendors that offer the features you need at a price that fits your budget. Once you have a list of five or fewer, request trials or demonstrations from vendors. You can usually try an HRIS out for a week or two to determine if the software is easy to navigate and the features fully meet your needs. Try to take detailed notes of each HRIS you try to make an informed decision.

5. Prepare for the HRIS

Preparing to implement the new HRIS can make the transition as easy as possible. Work with the vendor to prepare a timeline that clearly outlines each step, including a session to train employees. Closely monitor how the HRIS works in the first few weeks, and ask employees if there's anything they would change or add. You can make adjustments based on employee feedback and any notes you make.

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