What Is a Human Resources Information System (HRIS)?

A Human Resources Information System (HRIS) refers to digital technology designed to help employers meet their HR and business needs today and in the future. It's become a significant resource for companies seeking to streamline operations, devise employee recruitment and retention methods, and ensure meaningful HR-related contributions to the organization's overall success.

What Does HRIS Stand For? HRIS Meaning, HRIS Definition

A Human Resources Information System (HRIS) is a software solution that helps employers maintain and manage employee information. With human resources information systems software, companies can automate a significant amount of otherwise time- and labor-intensive HR administrative duties. An HRIS helps to address core needs (data analytics, time and attendance tracking, and a comprehensive employee database) and can significantly improve HR efficiency and cost-savings.

Furthermore, without HRIS software, businesses may be less able to compete in today's marketplace. Why? Because competing businesses are seizing on this technology and leveraging it to their strategic advantage.

HRIS software enables companies (and their HR teams) to track, manage, and automate basic HR information. In most cases, the system works off a comprehensive employee database. HRIS software may also encompass HR analytics and reporting.

Common software applications cover the following HR functions:

• Entering and tracking HR data
• Managing an employee database
• Tracking applicants
• Benefits administration
• Processing payroll
• Scheduling
• Self-service for employees

Just as companies have come to depend upon automated and integrated data to assist with other operational functions (from customer service to marketing), an HRIS can help meet this need in the equally important realm of human resources. This technology approach can help reduce issues related to manual processes and human error.

Technology can also generate measurable results by increasing the pace and efficiency of managers and their teams. In turn, the HR and IT professionals who support these individuals and teams can help them determine where technology works best and implement it to achieve maximum success.

What Are the Two Components of an HRIS?

There are two main components of an effective HRIS. Each contributes to the overall purpose of this valuable HR software: aligning HR with both short- and long-term strategic objectives. These two components exemplify an HRIS's role in helping build (and retain) a strong workforce and supporting efforts to meet the HR challenges today and in years to come.

• HRIS and organizational design (also called "structural design"). One of the most effective uses of HRIS encompasses all the roles and functions within the organization while clarifying the best means of establishing accountability and operating at peak functionality and reliability. With the proper type of HRIS, businesses can tackle ongoing challenges because they have put the "right people" in the right positions, all committed to pursuing the business’ objectives.
• HRIS and employee data. The ability of HRIS software to provide a comprehensive database of employee information also plays a key role in promoting strategic objectives. This database can cover the full spectrum of employee data (name, address, date of hire, salary history, Social Security number, benefit selections, etc.), giving business leaders insight into their employees' perspectives regarding performance, career paths, etc.

Automated reporting, recordkeeping, and self-service help to generate accurate, up-to-the-minute information, which may promote a more efficient workflow and support stronger employee engagement.

HRIS vs. HCM vs. HRMS

Businesses can benefit from various HR technologies to maximize productivity and employee engagement. As noted, an HRIS may help improve employee performance. Here's a look at the most popular types of HR software and how they match up against each other:

Human Capital Management (HCM)

Human capital management refers to a company's overall approach to managing one of its most important assets: people. HCM is a people-centered approach focused on maximizing the value a company receives from its human resources-related functions. An effective HCM includes the strategic and technological elements needed to address various HR-related activities.

Examples of key HCM topical areas include:

• Administrative functions, such as institutional and employee data management, as well as benefits and payroll administration
• Recruitment and performance management functions encompassing onboarding, career planning, and learning and development
• Service delivery, such as access to company policies and procedures, managing documentation, and organization-wide knowledge base
• Managing the workforce, including time and attendance, budgeting, forecasting, and self-service options

HCM technology solutions can help businesses to report and analyze human resource data for better strategic organizational decisions. HCM solutions often encompass recruiting, compensation and benefits, talent management, time and attendance, and other employee-related processes.

Integration plays a significant role in HCM systems, as integrated data can provide deeper insights and enhance an employer's ability to make holistic decisions affecting overall HCM strategies. Proper integration requires technology that reflects the wide range of functions companies rely upon to optimize their human resources capabilities.

Human Resource Management Systems (HRMS)

HRMS software is designed to integrate core HR capabilities into a single suite, where HR teams can conduct tasks, perform data analysis, and assemble essential reports.

Under some HRMS platforms, employees can complete self-service tasks linked to their personal information, thus allowing HR professionals more time for other duties. Data security is often a key feature of an HRMS, which may employ authentication steps to limit access to only those defined as "authorized users."

Many HRMS platforms can also be customized to meet organizational and user needs, streamlining workflows and other processes. Processes favorably impacted by HRMS platforms may include:

• Payroll management
• New employee recruitment and onboarding
• Maintaining employee attendance records
• Performance reviews
• Benefits administration
• Learning and development
• Employee scheduling and self-service

An HRMS can be a central location to store critical business data and provide employees with information about their compensation, performance, benefits, or paid time off. It can also give organizations the analytics and insights they need to make critical HR and other data-driven business decisions.

So, how do these systems match up?

HRIS vs. HRMS

HRIS and HRMS software can automate common human resource functions, but HRMS typically offers expanded, customized capabilities. While an HRIS houses data and demographic information, an HRMS often integrates additional productivity measurements such as performance reviews. An HRMS may also feature added security measures that enable different user access levels. For reporting purposes, an HRMS often offers expanded analytics compared to an HRIS.

HCM vs. HRMS

HCM systems provide the most extensive functionalities to assist with HR strategies, while HRMS systems focus on streamlining and automating HR responsibilities. An HCM system generally offers built-in analytics related to various HR processes that can support strategic decision-making. Comparatively, an HRMS is often used more specifically to add efficiency to HR processes.

HCM vs. HRIS

As the most comprehensive of the three systems, HCM systems offer a wider, more strategic focus than an HRIS. HCM systems may include additional functions such as performance management, learning management, recruiting, and onboarding. HCM systems also allow for data integration from various sources that support the development of strategic goals using advanced quantitative and qualitative analytics.

In human resource management, the terms HRIS and HRMS are often used interchangeably to represent the technological systems used in HR functions. Some overlapping examples might include organizational and employee data management, payroll administration, and benefits administration. Often, systems that fall into these categories have limited functions, offering one or two core HR services. The two terms best describe technological solutions, but do not usually tie into broader strategic planning or management philosophies.

Common HRIS Functions and Features

With its wide range of potential applications, common HRIS systems typically operate in sync with other business operations and objectives. Depending upon the type of system implemented, businesses can address basic HR duties or encompass the entire span of an employee's "life cycle." HRIS system features can include:

• Applicant Tracking System (ATS). A built-in ATS streamlines various HR processes, such as job applications, resumes, and job candidate questionnaires. All this important data is housed in a single, easy-to-use location.
• Payroll administration. This feature enables users to compile payroll data, such as compensation rates, banking information, etc., all in one centralized area.
• Benefits administration. With this function, employees can access benefits information and input timely updates to their benefits selections anywhere and anytime. Data can also be shared with brokers or third-party administrators and is conveniently saved year to year.
• Analytics. HR tools and reports can analyze business trends and track key metrics, including hiring, labor costs, and turnover.
• Time and attendance. With an HRIS system, employees clock in and out, request time off, view schedules, transfer between jobs or assignments, and more. Additionally, this software facilitates supervision of employee absences related to sickness, vacation, or other reasons. The time and attendance function virtually eliminates any improper clocking in or clocking out on a given workday.
• Onboarding. Automating specific administrative duties considerably simplifies the time-intensive process of onboarding new hires.

These HRIS features may help save money and reduce time spent on administrative tasks, thus opening opportunities for your HR team to focus on more strategic organizational goals.

Benefits of HRIS

Manual HR processes are rapidly becoming obsolete due to the complex process of measuring and analyzing workforce data (not to mention the possibility of costly human errors). By contrast, the proactive use of HRIS helps attract and retain talent and helps overall employee performance management. Other key benefits include:

• Improved user experience. Mobile apps and user-friendly software can make key HR tasks (applying for jobs, enrolling in benefits, etc.) much easier for the organization and its workforce.
• Freeing up your HR team. At present, your HR team may spend most of its time on tedious administrative tasks (onboarding paperwork, handling employee time-off requests, and so on). Automating these repetitive tasks frees HR staff to focus on overall business strategy.
• Payroll administration. With multiple payment options and easy integration with electronic timekeeping, your employees can be paid accurately and on time. Combining timekeeping with payroll may also result in fewer input errors and more accurate employee paychecks, while built-in safeguards alert you to payroll issues before they happen.
• Compliance. The right software enables businesses to remain compliant with tax and regulatory agencies. An automated payroll system can drastically reduce input errors, which, in turn, helps ensure that tax reporting and payment remittance are accurate.
• Facilitates business growth. As a business expands, so does its responsibility to handle a larger talent pool (with all its attendant, employee-focused administrative tasks).

A lot of time and resources go into building a strong workforce. HRIS software dramatically reduces the time spent and resources expended on administrative tasks, thus enabling HR to develop creative workforce strategies aligned with overall organizational goals.

Challenges of HRIS

As an extremely helpful tool in managing human resources capabilities, HRIS does come with some challenges. These are worth considering before embarking upon a full-fledged adoption of human resource information systems. Challenges include:

• Information privacy and security. Wherever sensitive employee data is concerned, taking the right privacy and security measures is essential. The challenge businesses face with HRIS is reconciling the vast amount of sensitive data with a solution that allows every user to obtain the data they need without gaining access to other information intended to be off-limits.
• Regulations and compliance. How HR teams and employees access HRIS data must comply with regulatory statutes and requirements. But compliance is always a "moving target," with new rules emerging as times change. Businesses adopting HRIS must design a method by which employees can access data in the system without violating existing compliance regulations.
• Business continuity and disruption. As with all emerging technology, HRIS features often undergo upgrades and modifications. There's always the possibility of a break in business continuity when upgrades occur. Any disruption can be costly, so choosing an HRIS that can be upgraded quickly and without any corresponding issues is important.

HRIS Examples

Many types of HRIS are available to businesses today. CEOs and business leaders, working together with HR and IT departments, can select the one best suited for their needs.

Paychex HR Services, for example, offers human resource information designed to help companies and their HR teams track, manage, and automate basic HR capabilities. In general, the system works off comprehensive employee data. Common software applications include HR analytics and reporting, tracking applicants, administering benefits, and enhancing payroll processing.

How To Choose an HRIS

For every business, the strategy for choosing the best HRIS comes down to this: What HR management functions will best serve a company's needs, and how will the company leverage the data it compiles from these processes?

A smaller company may need just a few core HR tasks (mainly a database of accurate and up-to-date employee information) rather than the full "bells and whistles" type of HRIS.

Larger companies, or those experiencing rapid growth, might opt for more all-encompassing HRIS software. This is designed to cope with a growing workforce (and its attendant demands and requirements). Therefore, a comprehensive HRIS platform allows companies to create and implement an HR strategy that aligns with overall strategic goals.

Whatever the circumstances, selecting HRIS software is generally based upon a business's need to maintain pace with changing employee demographics, remain up to date with ever-changing regulatory requirements, locate and hire employees with specialized abilities, and leverage the power of in-depth workplace analytics.

Find the Right HRIS for Your Business

Every business depends upon recruiting and retaining a full-spectrum talent pool of employees. Managing this challenge means, in our digital era, using tools like human resources information systems. With HRIS, companies can employ automation to handle time-consuming and labor-intensive HR administrative tasks. Core requirements, such as applicant tracking and time-and-attendance records, can be addressed with fewer costs and greater efficiency. This methodology has become essential in today's competitive marketplace.