What is a Human Resources Information System (HRIS)? An HR Practitioner’s Guide

A Human Resources Information System (HRIS) is the most used software in HR. In this article, we will give an overview of what an HRIS is, its main functionalities, and everything you need to know to have a basic understanding of the HRIS.

Contents
What is an HRIS?
Benefits of an HRIS
HRIS functions
Reporting and Analytics in an HRIS
HRIS suppliers
HRIS specialist & HRIS analyst
HRIS certification
HRIS implementation in 6 steps

What is an HRIS?

HRIS stands for Human Resources Information System. The HRIS is a system that is used to collect and store data on an organization’s employees.

In most cases, an HRIS encompasses the basic functionalities needed for end-to-end Human Resources Management (HRM). It is a system for recruitment, performance management, learning & development, and more.

An HRIS is also known as HRIS software. This is a bit confusing as it implies that different systems can have different software running on them. However, this is not the case. The HRIS is, in essence, an HR software package.

The HRIS can either run on the company’s own technical infrastructure, or, more common nowadays, be cloud-based. This means that the HR software is running outside of the company’s premises, making it much easier to update.

Other commonly used names are HRIS system and HRMS, or Human Resources Management system. These are all different words for the same thing. Collectively, these systems are also called Human Capital Management systems, or HCM. In this article, we will use the terms HRIS and HRIS systems interchangeably.

Benefits of an HRIS

As we discuss in our Digital HR Certificate Program, using an HRIS has a number of clear benefits. That’s why companies of all sizes implement this tool to support their people operations. Centrally, the HRIS holds employee information. A wide range of employee data is then easily accessible, in one system. 

• Record-keeping. An HRIS is a record-keeping system that keeps track of changes to anything related to employees. The HRIS can be seen as the single source of truth when it comes to personnel data.
• Compliance. Some data is collected and stored for compliance reasons. This includes material for the identification of employees in case of theft, fraud, or other misbehaviors, first contact information in case of accidents, citizens identification information for the tax office, and expiration dates for mandatory certification. All this information can be stored in the HRIS. It is essential that data is stored safely and securely, in line with GDPR regulations. 
• Efficiency. Having all this information stored in one place not only benefits accuracy but also saves time. Some companies still keep a lot of data about employees as physical paperwork. Finding the right folder, and locating the right sheet, can take up a lot of staff time. 
• HR strategy. The HRIS permits the tracking of data required to advance the HR and business strategy. Depending on the priorities of the organization, different data will be essential to track. This is where the HRIS shines. 
• Self-Service HR. A final benefit is the ability to offer self-service HR to employees and managers. This enables employees to manage their own affairs. When done right, the HRIS can offer a good employee experience. Keep in mind that not all HRIS systems offer this in a user-friendly manner!

Working with an HRIS has multiple benefits for the organization, HR, and the employee. Using an HRIS becomes interesting when you have between 30 to 50 employees.

At this time, managing this basic information in Excel becomes cumbersome and simple procedures like approving employee holidays need to be standardized.

Using an HRIS is especially beneficial for large organizations which typically use more advanced HRIS systems to support different HR functions. Small businesses would suit a more basic HRIS.

HRIS functions

There are different kinds of HRIS systems and software. Because an HRIS encompasses all the functionalities for HR, all separate functionalities are part of the system. These functionalities include:

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• Applicant Tracking System (ATS). This software handles all the company’s recruiting needs. It tracks candidate information and resumes, enables recruiters to match job openings to suitable candidates from the company’s application pool, and helps in guiding the hiring process.
• Payroll. Payroll automates the pay process of employees. Contractual data and information on new hires is often entered into this system – sometimes combined with time & attendance data – and at the end of the month, payments orders are created.
• Benefits administration. Another functionality of the HRIS is benefits management. Employee benefits are an important aspect of compensation and are also managed in this system. More advanced systems offer an employee self-service model for employee benefits. In this case, employees can select the benefits they are looking for themselves. One may want more paternity leave, the other one a more expensive company car. This self-service approach to benefits is also called a cafeteria model.

• Time & Attendance. This module gathers time and attendance data from employees. These are especially relevant for shift workers where employees clock in and out. Back in the day, employees often wrote down their working hours on a piece of paper. Then, the manager would manually enter the data into a time tracking system. Based on this data, payment orders were generated and paid to all employees. Nowadays, workers often check into work by fingerprint or a card that is synced with an HRIS. This gives an exact time for arrival and departure. Any issues with lateness are easily detected.
• Training. Learning and development is a key element when it comes to employee management. This module allows HR to track qualification, certification, and skills of the employees, as well as an outline of available courses for company employees. This module is often referred to as an LMS, or Learning Management System, when it’s a stand-alone. An LMS usually includes available e-learning and other courses to be followed by employees.
• Performance management. Performance management is a key part of managing people. Performance ratings are generated once or multiple times a year by the direct manager or peers of the employee.
• Succession planning. Creating a talent pipeline and having replacements available for key roles in the organization is another key component of an HRIS.
• Employee self-service. Employee self-service has already been mentioned. Organizations are focusing increasingly on having employees and their direct supervisors manage their own data. Requests like holidays can be asked for by the employee him/herself. After approval, these are then immediately saved into the system (and registered to track for payroll and benefits purposes).
• Reporting & Analytics. A much rarer module in HRIS systems is reporting and analytics. Modern systems enable the creation of automated HR reports on various topics like employee turnover, absence, performance, and more. Analytics involves the analysis of these insights for better-informed decision making. We’ll explain more about this in the section below.

Reporting and analytics in an HRIS

The common characteristic for all HRIS systems is that they have been designed as transactional systems. They are databases that record a company’s transactions. An example of a transaction is when new employees join the company.

A new employee record is entered, and the person is considered ‘active’. If a person leaves the company three months later, a new transaction is recorded, setting the person’s status to ‘terminated’.

The fact that these systems are designed as transactional systems, makes them bad at data reporting and analytics. They simply haven’t been designed for this. In addition, not all HRIS systems have all the above capabilities built-in.

Some functionalities, like payroll, LMS, or ATS could also be recorded in external systems. This makes HR reporting even more challenging, as it means that data is dispersed into multiple systems. In order to report data, a new layer needs to be added on top of all HR systems to report and analyze the HR data.

This is the second reason why the practical use of reporting and analytics for these systems is limited. Be aware of this when you are talking to HRIS providers, as they often tout their systems to be excellent in data reporting and analytics.

HRIS suppliers

The HRIS software market is fiercely competitive; there are thousands of HRIS suppliers to choose from. Gartner’s Magic Quadrant below lists the best-known Human Capital Management suits for 1,000+ employee enterprises. These include Workday, Oracle, SAP, ADP, Ceridian, Kronos, and more. Listing all the HRIS suppliers or declaring the best HRIS, would be impossible.

It can’t be generalized as the best HRIS for your company depends on the specific needs of an organization. These five HCMs are widely considered to be leaders:

Cornerstone

Cornerstone OnDemand, as one of the largest providers for Small and Medium businesses, offers different suites including recruiting, learning, performance management, and an e-learning LMS.

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Workday

Workday is arguably one of the best-known HRIS out there. Founded in 2005, it has rapidly grown to a global HRIS giant with over 10,000 employees. Workday specifically tailors to mid- and large-sized businesses.

SAP

SAP is better known as an ERP, or Enterprise Resource System. These are systems that keep track of a company’s resources, which include among other things financial assets, orders, and people. In 2011, SAP acquired SuccessFactors, making SAP SuccessFactors one of the major players in the HCM market, especially for large companies.

Oracle

Oracle HCM Cloud was released in 2011. It includes modules on talent management, workforce rewards, workforce management, and work-life solutions.

Ultimate Software

Ultimate Software was ranked by Forbes as the 7th Most Innovative Growth Company. The company provides one system of records for HR, payroll, and talent management. Systems include time and attendance, onboarding, performance management, compensation, succession management, and more.

HRIS specialist & HRIS analyst

In terms of job functions, there are two job roles that involve the HRIS. The first one is the Human Resource Information Specialist. The HRIS specialist is responsible for implementing and maintaining the HRIS for the organization.

This also involves on-the-job training to HR professionals in the use of the system. This function is usually in the IT arm of the HR department.

The HRIS analyst provides support for the HRIS. This includes researching and resolving HRIS problems and being a liaison with other parts of the business, like finance/payroll.

As an analyst, you are also involved in the generation of standard and ad-hoc HRIS reporting and improvements of HRIS processes. This means improving the employee experience in using the systems, coming up with user-friendly innovations, and implementing new policies to be reflected in the system.

However, HRIS is now an essential skill for all HR employees. Your organization may not have dedicated HRIS personnel. Generally, large companies do so.

HRIS certification

If you want to learn more about HRIS implementation and building and managing a digital HR strategy, we recommend looking into our Digital HR Certificate program which will provide you with a solid understanding of these topics.

Depending on which HR platform your organization is using, you may opt for a vendor-specific certification.

People interested in specializing in HRIS systems are advised to study IT and HRM. IT is useful for understanding the intricacies of the system while HRM helps understand the processes that the HRIS is supporting.

Combining both enables you to make better decisions when it comes to system implementation and operation.

HRIS implementation in 6 steps

We could write multiple articles when it comes to HRIS implementation. For this article, we will provide a high-level overview. Software implementation can be divided into multiple stages.

1. Search. Start your implementation by finding out what your different stakeholders need from an HRIS. Based on these requirements, you can create a list of potential providers. You can then invite these providers to make proposals. Ideally, at the end of this phase, you’ve chosen a suitable HRIS provider.
2. Plan and align. In this phase, you choose an implementation partner, create a steering committee and an implementation team. The steering committee usually consists of senior delegates from your chosen HRIS provider, the HR director from your organization, the internal project manager, and preferably a senior user from your business (optional). The implementation team’s main responsibility is working on the day-to-day tasks that come out of the implementation.
3. Define and design. At this point, you need to specify your user groups and map out your processes and workflows. Define the functional and technical requirements for your HRIS infrastructure, system, and security. Also, note that you might need to build integration between your HRIS with other existing systems during this phase.
4. Configure and test. In this phase, you need to create a core test team to test your new HRIS and provide feedback for potential improvements. After this, you should also create a user acceptance test, where you can bring in a number of users to provide final feedback.
5. Train and communicate. Before the Go-live moment, you will need to prepare a training program for your technical staff, a communication plan, a Frequently Asked Questions page, as well as other support documents.
6. Deploy and sustain. Once all your support processes are in place, you can officially launch your HRIS. Remember to constantly collect feedback and to update your training material in line with the evolving systems. Constant, accurate communication is key here.

By following these six steps, you can select and implement the best HRIS for your company. Again, if you want to go into more detail, check out the Digital HR Certification program. This program has courses on Design Thinking in HR and on building and implementing a Digital HR Strategy. These elements are essential when it comes to defining user requirements and implementing a software solution.

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