How to Choose the Best HRIS for Your Company Size and Budget

There are hundreds of HRIS vendors in the market today and it would be impossible for one company to evaluate all of the potential options. This article will walk you through some of the planning steps you can take to limit your focus on vendors that are a great fit for your needs.

Brett Ungashick
OutSail HRIS Advisor
July 4, 2023
user comparing HRIS systems

Human Resource Information Systems (HRIS) are becoming increasingly crucial for businesses of all sizes as they provide a comprehensive view of employee data, streamline processes and reduce manual labor. Choosing the right HRIS is critical to ensuring that your organization has access to reliable, up-to-date employee data and accurate reporting.

However, when selecting an HRIS solution, there are many factors to consider - from company size and budget to features and integrations. To help you make the right choice for your business needs, here’s a guide on choosing the best HRIS for your company size and budget.

Establishing a Budget

When selecting an HRIS, the most crucial consideration is budget. Developing a realistic budget will ensure you don’t overspend and can find a system that meets your needs without breaking the bank.

An HRIS system's cost can vary significantly depending on the type of system, the number of users, the level of customization required, and the vendor's pricing model. Establishing a budget will help you narrow down your options and avoid overspending.

When establishing a budget, consider the following factors:

  1. Cost of the HRIS system: The cost of an HRIS system can range from a few hundred to thousands of dollars per year. Investigate the vendor's subscription fees, implementation, and ongoing support costs.
  2. Size of the workforce: The size of your workforce will impact the cost of the HRIS system. The more employees you have, the more expensive the system will be.
  3. Customization requirements: If you require a highly customized HRIS system, be prepared to pay more for the system and ongoing support.
  4. Integration requirements: If you need to integrate your HRIS system with other business systems, such as payroll or accounting software, be prepared to pay more for integration services.

These factors will help you determine a realistic HRIS system budget and ensure you don't overspend.

Deciding between Cloud-Based and On-Premise Systems

The next step in choosing an HRIS system is to decide whether you want a cloud-based or on-premise system. Cloud-based HRIS systems are hosted in the cloud and accessed via the internet.

They are typically subscription-based and require no upfront hardware or software costs. Cloud-based systems are ideal for small and mid-sized companies that don't have the IT resources to manage an on-premise system. Cloud-based systems are also scalable and can easily accommodate growing businesses.

On-premise HRIS systems are installed on your company's servers and managed in-house. On-premise systems require upfront hardware and software costs and ongoing IT resources to manage and maintain the system.

On-premise systems are ideal for larger companies that have dedicated IT departments and want complete control over their HRIS system's security and data.

When deciding between cloud-based and on-premise systems, consider the following factors:

  1. IT resources: Do you have the IT resources to manage an on-premise system, or would you prefer a cloud-based system managed by the vendor?
  2. Data security: How important is data security to your organization? On-premise systems offer more control over data security, while cloud-based systems are hosted on the vendor's servers and may have more robust security measures.
  3. Scalability: Do you anticipate significant growth in the future? Cloud-based systems are more scalable and can easily accommodate growing businesses.
  4. Upfront costs: On-premise systems require significant upfront hardware and software costs, while cloud-based systems are typically subscription-based with no upfront costs.

It is essential to weigh these factors carefully before deciding between a cloud-based or on-premise HRIS system.

Determining Requirements

Once you have established a budget and decided between cloud-based and on-premise systems, the next step is determining your HRIS system requirements. Consider the following factors when determining your requirements:

  1. Core HR functionality: What core HR functionality do you require? This may include employee data management, time and attendance tracking, benefits administration, performance management, and compliance management.
  2. Reporting and analytics: What reporting and analytics capabilities do you require? This may include standard reports, custom reports, dashboards, and real-time analytics.
  3. Employee self-service: Do you require employee self-service functionality, such as online benefits enrollment, time-off requests, and access to personal information?
  4. Mobile accessibility: Do you require mobile access to the HRIS system? This may include a mobile app or a mobile-responsive website.
  5. Integration capabilities: Do you require integration with other business systems, such as payroll or accounting software?
  6. Compliance requirements: What requirements do you need the HRIS system to support, such as ACA reporting or EEO-1 reporting?
  7. Customization requirements: Do you require a highly customized HRIS system to meet your unique business needs?
  8. Support and training: What level of support and training do you require from the vendor?

The answers to these questions will help you determine which features are must-haves and which can be sacrificed to meet your budget and timeline.

Evaluating the System's Scalability

Finally, when evaluating HRIS systems, it is essential to consider the system's scalability. Your business is likely to grow and change over time, and your HRIS system needs to be able to keep up with these changes.

Consider the following factors when evaluating the system's scalability:

  1. The number of users: Can the system accommodate your current users and future growth?
  2. Integration capabilities: Can the system integrate with other business systems to support your growing business needs?
  3. Customization capabilities: Can the system be customized to meet your changing business needs?
  4. Performance: Will the system degrade as users and data volume increase?
  5. Vendor's roadmap: What is the vendor's product roadmap, and how does it align with your business's future needs?

Final Thoughts

Choosing the right HRIS system for your business requires careful consideration and thorough research. Evaluate each system's features, scalability, and budget requirements before purchasing. Additionally, ensure you clearly understand the vendor's product roadmap and support offerings to ensure that you are getting the best value for your money. By finding the right system for your business, you can ensure it meets your current and future needs.

We hope you found this article helpful in understanding how to choose the best HRIS for your company's size and budget. If you have any questions or need additional information, please don't hesitate to contact us. We are here to help!

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Meet the Author

Brett Ungashick
OutSail HRIS Advisor
Brett Ungashick, the friendly face behind OutSail, started his career at LinkedIn, selling HR software. This experience sparked an idea, leading him to create OutSail in 2018. Based in Denver, OutSail simplifies the HR software selection process, and Brett's hands-on approach has already helped over 1,000 companies, including SalesLoft, Hudl and DoorDash. He's a go-to guy for all things HR Tech, supporting companies in every industry and across 20+ countries. When he's not demystifying HR tech, you'll find Brett enjoying a round of golf or skiing down Colorado's slopes, always happy to chat about work or play.


Everything you need to know about OutSail
What is OutSail?
OutSail is the first-ever broker of HR Software. We offer market insights, evaluation tools & advisory services to help organizations research, evaluate and select the right HR software. And best of all - OutSail is free!
How is OutSail free?
OutSail is free due to our one-of-a-kind software broker model. When a company makes a purchase through OutSail, the winning vendor owes us a small fee for making the introduction.

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1.) Market Insights: Access the industry's most trusted data. Read user reviews of every leading HRIS vendor. Access verified pricing data. Use proprietary tools to sort & filter by your selection criteria.
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