HR Glossary  /  Human Resource Information System (HRIS)
Human Resource Information System (HRIS)7 min read
Table of Contents:

What is a Human Resource Information System (HRIS)?

HR managers report they lose 14 hours per week on tasks that could be automated. Fortunately, it's easy to do something about it: HR software will make that potential automation possible. In turn, HRIS systems are the simplest solutions you can implement to save time and money in your HR department. Yes, money too —a medical company managed to save $4,000 per month by implementing HR automation.

In this guide, we’ll tell you all you need to know about HRIS, what HRIS stands for, HRIS features, the benefits it can bring to your company, how to choose the right one, and much more.

HRIS stands for Human Resources Information System. Essentially, it's a sophisticated database system designed specifically for employee data. But it’s much more than just a record-keeping system. Along with simply storing information, an HRIS automates many core HR processes. It ultimately frees up HR professionals to focus on strategic initiatives and people management.

What’s the Difference between HRIS, HRSM, and HCM?

In the domain of HR software, acronyms like HRIS, HRMS, and HCM can get confusing. While they all address employee management, their functionalities differ in scope. HRIS acts as a foundation software that centralizes core HR data like payroll data and benefits information.

HRMS (Human Resource Management System) builds on this foundation and offers extra features. For example, it could include recruitment tools, performance management, and self-service portals for employees. Finally, HCM (Human Capital Management) emerges as the most strategic solution. Covering all of HRIS and HRMS functionalities, it adds advanced features like talent development tools and workforce analytics.

Despite these differences, ultimately, they’re in numerous instances used as interchangeable terms.

As we’ve anticipated, although HRIS is fundamentally presented as a centralized database, this type of HR software is much more than just that —and that’s why it is usually confused with HRMS or HCM.

So, which are HRIS key functionalities? Let’s take a look at them:

Employee Data Management

This is the foundation of any HRIS. It allows for the secure storage and organization of all employee information, from basic demographics to contact details and payroll data. It allows everyone to have access to the most up-to-date employee information. Advanced employee management tools help you to deeply organize your people’s profiles, to quickly pinpoint an employee, and provide you with an org chart that reflects your company’s hierarchy.

Employee Onboarding

Onboarding can be quite intimidating, especially if the workforce is increasing faster than ever before in a company. Tasks such as sending welcome emails, assigning unfamiliar responsibilities, and granting access to company resources can be very challenging for new hires. Well, HRIS can automate all these processes, too. This software allows new employees to update their personal details and access company information independently through dedicated self-service portals. Additionally, some HR software providers offer asset management tools so you can easily keep track of assets you assign to your employees.

Payroll Processing

An HRIS automates the payroll process, acting as a significant time-saver for HR teams. This includes calculating salaries and deductions, generating paychecks, and ensuring compliance with tax regulations.

Benefits Administration

Managing employee benefits can lead to costly misunderstandings. An HRIS solution simplifies this by automating enrollment processes, tracking eligibility, and providing a centralized platform for employees to access and manage their selections.

Time and Attendance Tracking

Gone are the days of paper timesheets —still using them would be almost as efficient as using fax for communications. Human Resource Information Systems offers automated time tracking solutions, especially useful for shift workers. This facilitates accurate data collection for payroll and helps identify any attendance issues. In addition, it allows employees to request time off on their own without having to set an awkward meeting with someone from the HR department.

Reporting and Analytics

Human Resource Information System software goes far beyond data storage. This system helps you understand your workforce through advanced reporting tools. These tools allow you to analyze trends like employee turnover, absenteeism, and performance, providing extremely useful information for data-driven decision-making.

Employee Performance Management

A strong HR system platform can also provide your company with performance management tools that allow you, for instance, to identify your top talent and set up regular employee review cycles.

These are just some of the core functionalities offered by an HRIS. The specific features will vary depending on the chosen system and the size and needs of your organization. However, all HRIS solutions share the common goal of simplifying HR processes, improving data accuracy, and freeing up HR professionals to focus on more strategic initiatives.

A Human Resources Management Information System isn't a one-size-fits-all solution. The specific benefits businesses enjoy from an HRIS vary depending on their size and needs. Let's explore how HRIS supports organizations across the spectrum:

Benefits of HRIS for Small Businesses

Let’s begin with a breakdown of the benefits HRIS software can bring to small businesses.

  • Smoother operations: HRIS automates all those tedious and time-consuming tasks that can take up much of your day. It efficiently manages the entire employee lifecycle, from onboarding new employees to processing leave requests or collecting peer reviews.
  • Simplified compliance: Keeping up with ever-changing employment regulations can be nerve-racking, especially is you’re a small business without a consolidated human resources management system. HRIS helps maintain compliance with built-in features and automated workflows and reduces the risk of penalties.
  • Improved recruitment and onboarding: An HRIS simplifies hiring and onboarding new employees, making the process less cumbersome and more efficient for both HR and new hires. This functionality gives you the possibility of making a successful new-hire experience without having to design sophisticated recruiting and onboarding strategies from scratch. This is not a trivial point, since it was reported that 91% of employees thought about quitting their first month at a new job, and 28% actually did it.
  • Budget-friendly scalability: Many HRIS solutions scale with your business and offer affordable options for small teams with the flexibility to adapt as your company grows. This is especially helpful for start-ups.

Benefits of HRIS for Medium-Sized Companies

Building on the advantages enjoyed by small businesses, medium-sized companies can make use of a Human Resource Information Management System to:

  • Information for knowledge-based decisions: Advanced reporting and analytics tools provide accurate data on workforce trends so that HR can make informed decisions about talent management and strategic planning.
  • Strengthen employee engagement: HRIS with features like performance management tools, employee feedback mechanisms, and self-service portals encourages continuous development and improves overall employee engagement —a study found that giving employees more autonomy makes them feel more engaged and accept a higher level of responsibility.
  • Retain top talent: A robust HRIS helps manage complex benefits packages, making your company more competitive in the talent market —73% of employees say that they would stay with their current employer if they had more benefits.

Benefits of HRIS for Large Enterprises

Large enterprises have complex HR needs, and an HRIS becomes a critical tool for:

  • Global workforce management: HRIS helps manage a geographically dispersed workforce with consistent HR processes and compliance across different regions. TalentHR, for example, offers a Careers page with global reach to attract top talent and multilingual support (over 14 languages) for international teams.
  • Advanced talent development: Sophisticated HRIS solutions offer features like performance management tools, succession planning tools and learning management systems to ease up the development of a strong talent pipeline.
  • Strategic HR optimization: Data-driven analyses from HRIS help HR leaders make strategic decisions about workforce planning, compensation structures, and talent acquisition strategies.

Finding the right HRIS can feel overwhelming, but you have this guide to deal with it. Choose the HRIS system that best fits your company following these three simple steps.

Step 1: Know Yourself

  • Current HR challenges: What are your biggest pain points? Are you getting bogged down in repetitive tasks, struggling with recruitment, or facing low employee engagement? Identifying these bottlenecks will guide your feature priorities.
  • Company size and growth: Consider your current size and future projections. A small start-up will need a different solution than a large enterprise with a global workforce. Choose a scalable solution that can accommodate your anticipated growth.
  • Budget constraints: Be realistic about what your company can afford. HRIS solutions come with varying pricing models (subscriptions, upfront costs, etc.).

Step 2: Prioritizing Features

  • Must-haves: Payroll, benefits administration, and employee data management are foundational features for most organizations.
  • Additional functionalities: Depending on your specific needs, consider features like performance management tools for effective feedback and goal setting, and time-off and attendance tracking for, ideally, self-service leave management.

Step 3: Key Considerations During Selection

Beyond core features, several other factors influence your choice:

  • Usability: The HRIS should be user-friendly for both HR professionals and employees. A complicated interface discourages adoption and frustrates self-service potential.
  • Scalability: For HR management, choose a solution that can grow with your organization. Look for flexible plans that adapt to future increases in employee count and complexity.
  • Security: Employee data is very sensitive. Look for encryption, access controls, and regular security updates to safeguard employee information.
  • Integrations: Check the HRIS integrates with your existing software ecosystem (accounting, payroll, etc.) to avoid data silos and manual data entry.
  • Mobile accessibility: A mobile app allows HR and employees to access HR functions on-the-go —particularly valuable for remote workforces.
  • Customization options: Choose software that lets you customize workflows, reports, and data fields to match your company's policies and processes.
  • Vendor reputation: Research the vendor's reputation for customer support, data security practices, and the overall user experience with their HRIS.

How does HRIS integrate with other business software?

Many HRIS options—such as TalentHR—integrate with popular accounting, payroll, and timekeeping software using its well-documented API. This makes it easy for data to move from one system to another without having to manually enter it. It's a good way to use just a few solutions and still do a lot with them.

What are the typical costs involved in implementing an HRIS?

HRIS pricing varies depending on features, number of employees, and deployment options (cloud-based vs. on-premise). Costs can range from $2 per month for some comprehensive options to a few hundred-dollars-per-seat providers.

What is the role of artificial intelligence in HRIS?

AI is playing an increasingly important role in HRIS. Some systems use AI to screen resumes, recommend candidates, and analyze employee sentiment to improve recruitment, engagement, and retention. Some solutions also rely on AI to write job ads.

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