An HRIS, or Human Resources Information System, is considered the foundational software tool for an HR department. An HRIS allows companies to track their employees, gather employee data and process payroll.
Many companies either do not have an HRIS system, or have an inadequate system, which inevitably leads the company to go-to-market to find a more robust system.
However, before entering the HRIS market and being presented with a variety of software platforms, it can be helpful to first know what is possible in an HRIS system, so you can set your project scope accordingly.
Features of an HRIS
The standard feature that you can expect from an HRIS is that the system will help you track employee data. Employee data is a broad term, but the most common data points that HR departments will keep track of are employee demographic data, such as birthdates, gender, hire dates, etc.
Other important details that can be tracked are: completion of compliance-related documents, employee job title and department, pay rate and pay history. Oftentimes, this employee tracking and management feature will come with org chart capabilities and e-signature capabilities.
Another standard feature in most HRIS systems is the ability to track employee hours worked and to manage leave for salaried employees. For salaried employees, an HRIS will automatically calculate accrued PTO and allow employees to request time off. For hourly employees, an HRIS can support the ability to clock-in/clock-out. More advanced HRIS systems will allow for the ability to create employee schedules and geo-fencing.
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Many HRIS systems also include a benefits administration module. This module allows employees to enroll in company offered benefits plans such as medical, dental and vision insurance. Employees can make their plan selections in the HRIS and that data will automatically be converted into payroll deductions that are accurate from a tax standpoint
Some, but not all, HRIS systems can also process payroll. These systems will gather the employee's pay rate data from the employee tracking module, their time data and their benefits selections, before calculating the employee's gross pay. Additionally, this system will know the employee's location and factor in their tax liabilities too. Most HRIS companies that offer payroll processing will also take the responsibility for filing taxes on your behalf at the end of a quarter and year.
Recruiting & Onboarding
Many HRIS systems can also support the hiring process for companies. If the system includes an applicant tracking system (ATS), then the HRIS will be able to post jobs to 3rd party job boards, organize applicants and track their movement through the various interviewing stages. Once an employee is hired, an HRIS will often offer an onboarding module that can gather new hire data, such as their direct deposit information, and allow the employee to complete new-hire paperwork, such as an I-9 or W-4.
Other Features - Performance Reviews, Surveys, Learning
Most HRIS systems can solve for the core HR functions of hiring, tracking and paying employees. Some HRIS systems can also help develop employees. They can often manage the annual review process in a standardized manner that alerts managers and employees when it is time to complete their evaluations. Many modern HRIS systems are also capable of administering regular pulse surveys to check-in on employee morale. Some even have the ability to administer compliance trainings or learning courses to upskill employees.
Benefits of an HRIS
One of the main reasons that businesses invest in an HRIS is to ensure that they maintain compliance with the state, local and national employment laws that they are subject to. Employment laws are ever-changing but consistently require that employers are tracking employee data to ensure fair hiring and pay practices are observed. The right HRIS system will compile this data for your business and make it easily reportable, so you can satisfy any agencies' request
Before HRIS systems became popular, businesses gathered and tracked their employee data manually using paper and file cabinets. This can be effective for data that isn't likely to change (like an employee's birthday), but for data that is very dynamic, such as hours worked this week, a manual process can open businesses up to costly errors. By letting technology do the tracking and calculating work, businesses can ensure that benefits and payroll are accurately paid each pay period.
As younger generations move into the workforce, technology becomes an expectation. This generation is used to doing everything on their phones without having to interact with other people. This is the same expectation they'll have about onboarding at your company, requesting time off and viewing their pay. If an employee isn't able to complete these actions by themselves, their view of your company will be diminished
The main reason that businesses are investing in their HRIS is so they can free their stakeholders up to work on more strategic projects. Rather than asking the HR team to gather time cards and do manual data entry, a company with a robust, automated HRIS system can have their HR team work on strategic initiatives such as building out an inclusive culture.