What is HRIS?

A Human Resources Information System (HRIS) is software that manages and processes employee data. It is a system of information management that assists the HR department in efficiently managing employee and HR files as well as the company-related data.

What does HRIS stand for?

Now that we understand ‘what is HRIS’, let us understand what it stands for. HRIS stands for ‘Human Resources Information System’ since it manages the employee master data and helps the HR department to keep tra ck of the staff and their information in an organized manner. As a database management system, the HRIS must also have additional data integrity and security features.

HRIS systems also enable HR professionals to generate insightful reports that will allow them to make well-informed data-backed decisions. It also helps in sharing the findings with the upper management to persuade them to approve any enhancements suggested by them. HRIS also proves helpful in improving the efficiency of the HR team as it provides handy dashboards that provide multiple valuable pieces of information in a single view.

What does an HRIS do?

The primary function of an HRIS or a Human Resource Information System is to improve the efficiency of the HR team of any organization by streamlining core HR tasks. Since HRIS avoids paperwork and manual data entry, it also provides the added advantage of categorizing and organizing employee data in secure databases, which makes gathering inferences from it very easy. Due to these reasons, it improves HR’s efficiency and helps them stay updated with changes in personnel data.

Additionally, it improves the employee experience since they can view and update their information from their Employee Self Service portal. It provides additional transparency for them, which also ensures the accuracy of the data as they can correct any errors with an approval-based system.

Why are HRIS systems important?

An HRIS is particularly relevant to organizations since it helps them unify the employee database effortlessly and makes it easier to draw meaningful inferences. Additionally, the system ensures that the HR data meets the necessary security and integrity rules imposed by local and national regulations.

The importance of HRIS becomes evident when searching for specific information related to any employee, as it makes the process extremely easy. It provides automated workflows, which is extremely valuable for HR teams, as they undertake various core HR processes. Hence, deploying an HRIS would help streamline HR functions while providing a secure database to store employee details.

HRIS vs HRMS vs HCM - What are the differences?

The terms HRIS, HRMS and HCM are used interchangeably nowadays. However, there are subtle differences between them. While HRIS (Human Resource Information System) and HRMS (Human Resource Management System) refer to the systems or software used for undertaking the administrative tasks of the HR team, the term HCM (Human Capital Management) refers to the management of the employees in the company. It may include the usage of dedicated software; however, it can also be undertaken manually without the help of a reliable system.

On the other hand, the difference between HRMS and HRIS is even subtler. HRMS denotes a software system that can help the HR management undertake HR operations efficiently by streamlining their processes. On the contrary, HRIS was developed as a primary system to support HR in storing employee data and making inferences from it. Hence, it may lack dedicated training, recruitment, talent acquisition, and related systems.

What are the benefits of HRIS?

There are several benefits of deploying an HRIS in an organization. Some of the most significant advantages are:

▸ Data-backed Decisions

HRIS solution provides multiple options to generate and download custom reports that enable the decision-making authorities to take informed decisions. It allows the HR and management to understand that every change they implement is valid for the improvement of the company.

▸ Improved Efficiency

Since the information is stored digitally in an HRIS, it becomes effortless to fetch it whenever required. Such easy access to the database makes HR tasks more streamlined since they can access their employee information quickly.

▸ Security & Integrity

HRIS provides additional security and enhanced integrity to the employee database by storing the information in the format imposed by local regulations. As a result, the data remains secure in the system in an encrypted format. Similarly, only personnel with the proper credentials would be able to access the information, thereby maintaining abstraction.

▸ Compliant Records

The information in the HRIS is stored in the correct format using best-in-class encryption standards to provide enhanced security and integrity. Since employee information is precious, keeping the data according to the regulations is highly imperative, and failure to do so could even result in hefty penalties.

▸ Enhanced Experience

With the help of an HRIS, employees can view and edit their personal and professional information, making the process highly transparent. Additionally, their HR will approve the changes, ensuring the avoidance of any errors in the database. The user experience will also be enhanced since they can access crucial information such as their payslips, remaining leaves, holidays, and more without disturbing their human resources department.

What are the types of HRIS software?

There are various types of HR systems available in the market today. The functions and responsibilities handled by these HR software solutions vary a little, which results in classification.

Let us check out the various kinds of HRIS:

1. Comprehensive

Comprehensive modern HRIS software encompasses all features; hence, they are sometimes referred to as Human Resources Management System or HRMS. Being an all-in-system, it undertakes numerous HR-related tasks, such as recruitment, payroll, training, reporting, attendance, expenses, timesheets, benefits administration, and others. HRMS can also provide advanced analytical reports and suggest improvements based on the existing data.

2. Operational

Operational HRIS provides data for operational-level decisions. For example, an HRIS that collects, archives and tracks employee data for analytics is an operational HRIS. The data can be used for internal job postings, performance management, and appraisal of employees. Such operations require data backing for fair, smooth and transparent processing.

3. Strategic

Strategic Human Resource Information Systems enables the HR personnel to plan for the future using the existing company data and modern technologies such as AI and machine learning for predictive analysis and HR strategy. The HR team can undertake workforce and requirements planning to ensure that the workplace is adequately staffed.

4. Tactical

Tactical HRIS is concerned with adequate resource allocation for the smooth functioning of the company. It undertakes various responsibilities such as job analysis, recruitment, salary and benefits management, employee training, etc. As a result, it helps in the efficient working of the company.

What are the features of HRIS software?

A Human Resource Information System provides multiple features that help HR in undertaking their current HR processes and employee management efficiently. Some of the most significant HRIS functions include:

▸ Recruitment

A robust HRIS can undertake hiring process with enhanced efficiency since it can scan and parse resumes, build a candidate pool and even perform rudimentary candidate screening based on user input.

▸ Payroll

HRIS can also automate payroll by deducting taxes, adding statutory benefits, calculating wages by considering the late-coming, early-leaving, and overtime rules, benefits administration, and more.

▸ Shifts

HRIS also contains a time and attendance management module to accurately capture and regularize employee attendance utilizing modern technologies such as biometric finger or facial scans, geo-tracking, and others.

▸ Compliance

The HRIS also automates the process of compliance maintenance by automating removing the statutory deductions and ensuring the disbursal of employee benefits, such as state-sponsored medical insurance, retirement plans, etc.

▸ Analytics

HRIS also enables easy reporting and analytics due to the centralized employee database. It provides interactive and customizable reporting options to help HR and management take data-backed decisions for completing core human resource tasks such as succession planning.

▸ Integrations

A competent HRIS would also provide integration options to help it interact with other company-wide applications such as accounts software, ERP, biometrics hardware, and more, to ensure a seamless user experience.

What are the benefits of a cloud HRIS system?

There are various benefits of deploying a cloud-based HRIS system. Some of the most significant HRIS benefits include the following:

▸ Data-driven Decisions

Cloud-based HRIS makes the process of collating company data and generating meaningful reports easy with the help of automatically rendered organizational charts. Such insightful reports make the process of taking decisions quick and easy for HR and management.

▸ Automated Compliance

Compliance handling becomes automated with cloud-based HRIS since the HRIS vendors must update the system based on any changes in the regulations. It ensures that the company stays on top of its compliance automatically.

▸ Improved Scalability

A cloud-based system provides unprecedented flexibility and scalability as any module can be added or removed per company requirements without the hassle of reconfiguring the entire system.

▸ Easy Accessibility

Being customized software, cloud-based HRIS solutions are intuitive and easy to use. They can be accessed from anywhere, anytime, using any connected device, which avoids needing specific hardware or software.

▸ Innovative Integrations

All robust cloud-based HRIS comes with innovative integrations with existing systems, enhancing the usability of the software. Integrating with other commercial systems ensures that the personnel can undertake their tasks without needing to import and export data between systems repeatedly.

▸ Data Security

Since cloud-based systems transfer data over the internet, they have adequate encryption policies to ensure security and integrity. Additionally, this process is transparent to the user, making it seamless.

How to choose the best HRIS for your business?

Choosing a new HRIS platform is extremely daunting since an HRIS helps take care of various vital aspects of human capital management. Not all HRIS systems are the same, hence, it should be undertaken after discussing and brainstorming with heads of various relevant departments.

Some of the common steps involved in the implementation of HRIS are:

1. Research

Research is the most vital step in choosing an HRIS for your company. You should check out various HRIS providers and find the one who can customize their software to suit your business requirements and HR processes. Hence, by the end of this stage, you would have chosen a software vendor.

2. Planning

Once you choose one of the multiple HRIS platforms, you should work with their implementation team and HRIS analyst to identify the customizations required. It would be best if you guided their team in understanding the exact software requirements, planning the budget, and deploying the system for your company.

3. Design

Once the requirements are ready, you are prepared to provide in-depth analysis and details about each module and the HRIS processes. You can define the functional and technical needs of the HRIS and note down the integration requirements at this deployment stage.

4. Configuration

Once the details are ready, you can configure the HRIS accordingly and test it with a test group. Once the test bench is ready, you can create user acceptance tests and share them with a team to gather feedback and suggest improvements.

5. Training

Once you have set up the system as per your requirements, you need to train your staff to use it efficiently. Employee training can be undertaken with the help of the implementation team and a learning management system, that provides suitable training materials.

6. Deployment

Once the team is ready, you can deploy the system and observe how well your employees can adapt. You need to constantly collect feedback from your staff and suggest changes to the software vendor for further enhancements, which helps make the software even more user-friendly.

Future of HRIS technology

The future of HRIS involves actively using innovative technologies to aid HR in undertaking their duties by storing the data and providing insights into employee behaviour. With the rise in globalization and hybrid workforce, an HRIS is becoming indispensable in companies that wish to engage their staff and improve the efficiency of their HR professionals.

Some of the significant future usages of the system include:

1. Artificial Intelligence

We are already witnessing the integration of AI in HRIS to enable various optimizations in employee and their data management. AI-based HRIS can also help HR with predictive analysis, wherein the system effectively calculates and predicts the future probability of a negative or positive action, allowing HR to take corrective actions.

2. Performance Management

Future-ready HRIS solutions can provide comprehensive 540-degree employee performance management, making it easier for HR and management to keep track of their performance. HRIS can also help deliver year-round reviews instead of annual performance reviews, making the process more effective.

3. Machine Learning

With the introduction of ML to HRIS, HRs can streamline multiple tasks related to employee engagement. While HRIS has already improved the overall efficiency of the HR department by digitalizing most of their process, ML would further help optimize the processes. For example, it can highlight any outlier in the data and alert the user to ensure complete data integrity.

FAQs

How do HRIS systems work?

HRIS software integrates multiple HR functions into a single system that can collate and process employee data to provide HR with robust organizational management.

How does HRIS help recruitment and HR professionals?

Recruiters can utilize the various modules of an HRIS such as applicant tracking system and talent management, to create job postings, search and find relevant talent, run background checks, provide applicant tracking, and provide competitive packages to retain them for longer.

Why is an HRIS important?

The most significant relevance of HRIS for companies is that it helps streamline numerous HR activities, which improves employee engagement and productivity.

Who uses a Human Resource Information System?

HRIS is used by HRs to streamline human capital management systems that provide them with innovative solutions for optimizing their processes’ efficiency and enhancing their employee engagement efforts.

What are the advantages and disadvantages of HRIS?

There are multiple advantages of HRIS, such as workflow automation, enhanced integrations, centralized database, among others. However, as automated technologies advance, there are numerous disadvantages for HRIS too, such as data security, overspending, reduced ROI, among others. However, one must understand that almost all of these drawbacks can be overcome with the correct implementation of the system.