What Is HRIS? Your Definitive Handbook Made by HR Experts

Only 37% of companies have already implemented an HR tech plan to optimize remote work, especially in global teams. For many, this HR tech plan involves introducing an HRIS solution to meet core HR needs and ensure a better experience for the entire workforce.

Given that a hiring process that takes too long or doesn't run smoothly may even cost you a great candidate, looking into HR software should be your next step. HR tech can solve recruiting, hiring, and workforce management challenges by streamlining your people operations through automation and centralized employee data management.

This article will show you how your HR team can benefit from using an HRIS.

What is an HRIS?

HRIS (Human Resource Information System) is a software solution that enables companies to store, organize, and manage employee data through a centralized database, eliminating duplicate HR processes and costly errors and allowing HR departments to focus on core HR tasks and make data-driven decisions about their workforce through HR analytics.

An HRIS solution:

• Lets HR teams focus on strategy rather than manual work
• Ensures accurate reporting and record-keeping
• Enables paperless and more efficient communication between HR and workers

What’s the difference between HRIS, HRMS, and HCM?

People often use the terms HRIS, HRMS, and HCM interchangeably due to their shared product features. These are all cloud-based HR software solutions that help HR departments manage their workforce, but offer different levels of service.

An HRIS is the most basic system of the three HR technologies and involves record-keeping, collecting employee information, tracking data, storing company policies, and managing HR processes.

An HRMS includes the basic features of an HRIS and additional features for time tracking, benefits administration, and payroll management.

HCM software is usually the most comprehensive option, building on the basic HRIS features with talent management tasks such as learning and development, performance management, and succession planning.

Common features of HRIS software

An HRIS combines the efficiency of digital automation with the convenience of a centralized hub for employee information. Most HRIS options are highly customizable and usually come with desktop and mobile app versions powered by the cloud, perfect for distributed teams.

The full scope of functionalities depends on the type of HRIS you use, but there are the most common features you’ll find in this tool.

Employee data organization and management

HRIS enables you to store, organize, and access employee data in one place instead of using multiple tools to do so. This data can include: 

• Contact information
• Education
• Salary
• Date of birth
• Tax information
• Role responsibilities
• Start date

HR teams can typically customize access controls to this information so the right employees can search and update information as needed, instead of going through the HR team to access it.

Organizational structure

HRIS solutions provide a visual representation of your internal structure, helping everyone in the company understand the hierarchy across departments. This feature is particularly helpful for new hires who are only getting to know their co-workers. Org charts also enable the management to spot gaps in team structures and create hiring plans accordingly.

Attendance and time off tracking

Tracking employee attendance allows you to review working hours, absences, sick days, and holidays for every employee. Using an HRIS lets you complete all of these tasks in one dashboard. Once you’ve collected enough data, you can track individual and company-wide employee engagement trends to improve your internal policies.

Automated payroll management

Automated payroll saves teams time and compliance headaches by tracking timesheets, calculating wages and taxes, distributing pay, and maintaining payroll records for you. These automated HR systems reduce the chance of human error and increase data security to keep confidential payroll information safe.

Employee benefits administration

Through a more comprehensive HRIS, HR professionals can manage employee benefits and compensation packages. They highlight company perks, gather transparent compensation data for each role in the company, and administer benefits packages to each worker.

Applicant tracking

Some HRIS solutions include an Applicant Tracking System (ATS), which gives you a single source for all of your candidate information. This saves time during the hiring process and makes talent acquisition about finding great new employees rather than entering data.

Employee self-service options

With the right HRIS, employees can set their own professional goals, keep track of performance reviews, and take ownership of their career development. This employee self-service element empowers workers to take the lead on their own learning and development while freeing up time for HR team members.

People analytics and reporting

HRIS solutions often offer at-a-glance KPI dashboards that enable HR teams to track people metrics and create reports to support data-driven decisions that improve employee engagement, performance, and retention.

Benefits of using an HRIS

An HRIS helps minimize common HR department challenges by automating tasks, strengthening compliance, and organizing HR data.

Here’s a deeper look into the benefits of using an HRIS:

Support for scaling businesses

As a company grows, so does the need for a single source of truth—a place where accurate, up-to-date information lives for all employees to access. Instead of separating that information into multiple HR systems and spreadsheets, an HRIS centralizes it into one organized platform, accomodating an increasing amount of data and a growing number of workers.

More time for meaningful HR tasks

On average, HR managers who don’t have fully-automated systems lose 14 hours per week completing time-consuming tasks they could automate. 

With an automated HRIS platform, workers can submit and review information independently. HR team members can also produce accurate reports in seconds—which means fewer questions, fewer headaches, and more time available to improve human resources and the employee experience.

Better, data-driven decision making

Once you’ve migrated all of your data to an HRIS, you can start making data-informed decisions inspired by accurate information and real-time insights pulled from HR analytics—not your gut feeling. Track behaviors, trends, and more to identify cost-saving initiatives, streamline processes, and optimize your workforce.

Enhanced data protection and compliance

Instead of spreading sensitive employee information across multiple poorly-guarded spreadsheets and documents, you can hold all information securely on one HRIS. Most HRIS providers regularly update their systems to reflect current HR regulations to meet the latest cybersecurity requirements and data security standards.

Reduced costs

Your HR team will see a reduction in costs due to shorter recruitment cycles, lower employee turnover, and higher employee productivity. By identifying and eliminating duplicate processes, reducing the potential of human error, and optimizing material costs (e.g. decreasing the amount of paperwork), your HR department could see cost savings of up to 30%.

Improved employee experience

According to a McKinsey Global Survey, only 37% of respondents say their organization’s HR functions facilitate a positive employee experience. Their functions aren’t strategic or agile enough, which can lead to disorganized processes and frustrated workers.

When you centralize and automate your HR processes in an HRIS, employee inquiries won’t get lost in the email inbox, every step of onboarding will be completed, and workers will get paid the correct amounts on time.

What to look for in HRIS software

If you decide it’s time to invest in HR technology, here’s how to select the best HRIS for your business. Look for the following features:

Global support for all types of workers: Localized HRIS solutions tailor onboarding, compliance, tax, and other functionalities to a specific country, which can become an issue when you start building a global team. A global HRIS supports all types of workers in every country and ensures full compliance throughout the process.

Self-service options: Tech-savvy users can set up integrations with different tools and customize HRIS platforms to fit their specific needs, but also count on customer support to help. On the other hand, employees can update their own information too instead of every request going through the HR team.

Integrations: Integrations facilitate the transition to the HRIS as you don’t need to migrate all your data. They also allow you to cover any functionality that doesn’t exist natively in the HRIS.

People analytics and reporting: Reporting tools enable HR teams to track people metrics and make data-driven decisions to improve employee engagement, performance, and retention. 

Data privacy and security: HRIS solutions must offer a high level of data privacy and security and GDPR compliance. They should let you manage access to data on different levels to make sure every employee has permission to see the data they need.

Ease of implementation. Introducing a new tech solution is always a disruption in your employees’ usual workflow. To minimize the impact the new software will have on your workers’ productivity, choose a user-friendly HRIS with extensive training videos or ongoing customer support available for your workforce.

How to choose the best HRIS for your business

Switching from one HRIS to another can be a daunting process, so you should take your time to assess your options and get it right from the very beginning. We suggest taking the following steps when choosing the best HRIS solution for your business.

Consider your future business needs: Define your HR’s biggest pain points that could be removed by implementing an HRIS. Mapping these needs right will help you determine what key features to look for in an HRIS once you start assessing your options. Plan for the future, too: consider your potential expansion goals and choose a scalable HRIS solution to avoid switching to a new platform when your team becomes larger or global.

Research all your options: Compare available solutions in terms of features, pricing, integrations, scalability, and support. Read through testimonials, case studies, and reviews to see what others say about a particular HRIS. Ask your network for honest, first-hand impressions.

Book demos with your top-choice vendors: This is an opportunity to ask all the questions you couldn’t find the answer to online because they refer to your company only. A hands-on experience with the product will give you a better understanding of how a particular HRIS solution works and you’ll have a more realistic picture of each vendor.

Reassess your choice after a trial: A probationary period is recommended when adopting an HRIS. It gives you enough time to change your mind while testing the software. If you're not sure it works, don't hesitate to stop. To ensure the accuracy of the trial, include people from different departments and try to use all the features you'd normally need.

Organize and manage your workforce with Deel

While an HRIS can optimize HR functions for both on-site and remote organizations, HR managers for globally distributed teams need more support. That’s where Deel comes in.

Deel’s services allow you to hire, pay, and manage employees and independent contractors anywhere in the world. In Deel’s comprehensive, but the easy-to-use platform you can make sure your people data is always up-to-date, accessible to those who need it, and safe with enterprise-grade data protection.

Investing in HR tech today prepares you for the future of work and gives you a competitive edge in the war for global talent.