Exploring HRIS Meaning: Demystifying What is HRIS

No matter what the Future of Work holds, the good old HRIS (Human Resources Information System) won't go away soon. 

People need to be paid, benefits must be administered, and leave must be approved and logged.

New-school HRIS software even goes beyond this, delivering modern systems that facilitate increasingly popular remote work models and boost the employee experience. 

In this article, I'll explain the meaning of HRIS systems and share essential information you'll need if you're evaluating one.

As a renowned Future of Work writer, I know your time is valuable, so let me cut to the chase and dive in:

HRIS Meaning: everything you need to know.

First things first: what is an HRIS? 

The HRIS, or Human Resources Information System, is a type of HR software designed to handle core HR necessities like payroll, benefits administration, and leave approvals.

HRIS systems are key in maintaining, managing, and processing employee information alongside HR-related policies and procedures. They standardize HR tasks for more accurate record-keeping and reporting.

Integrating HRIS software into daily operations eliminates outdated paper-based methods, fostering a more efficient and seamless interaction between employees and their companies. 

But that's not where it ends.

The HRIS software industry is continuously developing, with new features (including Generative AI) being launched and the number of vendors continuously expanding. This means that a solid base understanding of HRIS is vital if you're in HR, Operations, or IT.

As we delve deeper into the article, we'll explore the core functions of HRIS, understand how an HRIS stands distinct from other systems, and the benefits of implementing such a system. 

Choosing the right HRIS software for your business is a vital step towards ushering in a new era of productivity and employee satisfaction. HRIS empowers employees to manage their own data, enhancing their experience throughout the employee life cycle. 

By the end of this article, you'll have a comprehensive understanding of HRIS and be equipped to select an HRIS solution that aligns with your business needs and future work trends.

For more about HRIS, please see my complete guide to the HRIS here.

Core Functions of an HRIS

Understanding an HRIS's core functions is crucial to appreciating its value to your company, just like understanding what is HRIS.

At its core, HRIS software serves as the backbone for efficiently and effectively managing a company's human resources operations. 

Here's a closer look at some of the key HRIS system functions:

Employee Data Management

• Demographic Information: Tracks employee details such as name, address, contact information, and emergency contacts.
• Job Titles and Pay Rates: Stores information on employees' roles, departments, and compensation.
• Org Chart and E-Signature Capabilities: Some platforms visually represent the organization's structure and streamline document signing processes. 

Payroll and Benefits Administration

• Payroll Processing: Automates the calculation of gross pay by factoring in pay rates, hours worked, benefits deductions, and tax liabilities. This complex matter is even more challenging when practicing remote work, which is why newer platforms like Rippling and Deel support this natively.
• Benefits Management: Simplifies the enrollment process for company-offered benefits, ensuring accurate payroll deduction.

Data and Self-Service

• People Analytics: Provides insights into workforce data, aiding strategic decision-making.
• Employee Self-Service: Empowers employees to access and update their personal information, fostering a sense of autonomy.

Besides these core functions, some HRIS software also supports:

Recruitment and Onboarding

• Job Posting and Applicant Tracking: Streamlines job postings to third-party boards and organizes applicant data, improving the recruitment process and the candidate experience, avoiding the need for a stand-alone ATS Software.
• New-Hire Paperwork: Facilitates the collection of necessary documents from new employees, making onboarding smoother.

Performance and Development

• Performance Management: Tracks employee performance goals, manages annual reviews, pulse surveys, and compliance training, and supports employee development.
• Learning Management System (LMS) Integration: Offers easy access to training resources and tracks employees' qualifications and skills.

Because of these features, an HRIS can save significantly on administrative tasks, with HR professionals potentially saving up to 2 hours per day on tasks.

Doing so frees HR people to focus on strategic initiatives and the essential human components of the job.

So whether you're a large organization tapping a platform like SAP SuccessFactors and Workday or a smaller business looking for a fitting and budget-friendly solution, HRIS systems improve your efficiency and the experience of your people. 

The HRIS Versus HRMS and HCM

HRIS isn't the only term you'll see: HRMS and HCM are also often mentioned in this context.

Now that you know what is HRIS system, understanding the distinctions between HRIS, HRMS (Human Resources Management System), and HCM (Human Capital Management) is crucial. 

While designed to enhance HR operations, these systems differ significantly in scope and functionality. 

Let me break down these differences to find the right fit for you:

HRIS (Human Resources Information System)

• Focuses primarily on automating routine HR tasks, leading to time and cost savings.
• Provides a unified approach to tracking and storing employee and compliance data, which is crucial for audits and legal compliance.
• Modern HRIS software is evolving to include AI for intuitive decision-making and comprehensive performance management.

HRMS (Human Resources Management System)

• HRMS systems (also: Human Resource Management Information Systems) offer a broader set of features compared to HRIS, including integrated analytics from workforce data to support strategic planning.
• Focuses on tracking employee lifecycle management processes such as performance management, recruitment, onboarding, reporting, and analytics.
• Designed to facilitate seamless integration of core HR capabilities into a single suite, allowing for employee self-service tasks linked to their personal information.

HCM (Human Capital Management)

• Emphasizes a strategic approach to managing people, focusing on acquiring, managing, and optimizing the workforce to maximize business value.
• Integrates with other elements of ERP software like finance.

In short, while Human Resources Information Systems provide the foundational support for HR operations, HRMS and HCM expand upon this by offering more advanced functionalities and a broader strategic focus. 

As you can imagine, the more comprehensive the platform, the higher the cost. This is why companies usually start with an HRIS and move up to an HRMS or HCM as they scale.

Data from providers like Enlyft shows that revenue and company size are good predictors of which platform type fits you best. 

Evaluate your specific needs to determine which system aligns best with your HR and business objectives.

Benefits of Implementing an HRIS

Implementing an HRIS (Human Resource Information System) within an organization unlocks many benefits for HR and beyond. 

From ensuring compliance with the latest regulations to enhancing the employee experience, the advantages of employing HRIS software are vast and varied. 

If you're thinking of adopting an HRIS or trying to build a case for it, consider some of these benefits:

Efficiency and Cost Savings

• Automated HR Tasks: HRIS systems automate routine HR tasks like time tracking and payroll processing, saving significant time and reducing errors. This automation leads to a more efficient workflow and lets your HR team focus on more strategic tasks.
• Centralized Data Management: With HRIS, all employee data is centralized in one place, making it easier to access and manage. This centralization reduces duplication of effort and leads to cost savings by streamlining processes and improving data accuracy.
• Reduced Administrative Costs: HRIS systems reduce the administrative costs associated with managing HR tasks by answering employee questions through self-serve features. 

Enhanced Decision Making and Compliance

• Real-Time Analytics and Reporting: Good HRIS software provides real-time access to data and analytics, enabling HR professionals and management to make informed decisions quickly. Improved reporting capabilities allow for a more impactful alignment of HR efforts with business goals.
• Compliance Management: Staying compliant with labor laws and regulations is simplified with an HRIS. The system can automate compliance-related tasks, reducing non-compliance risk and potential legal issues.

Improved Employee Experience

Some of these features may fall outside of the HRIS scope (see 'What is HRIS' above), but select systems may also offer:

• Onboarding and Self-Service Features: HRIS systems improve the onboarding process for new hires and offer self-service features for all employees. This empowers employees to manage their data, increasing satisfaction and engagement.
• Remote Access and Flexibility: Accessing HRIS platforms remotely facilitates flexibility in work arrangements, allowing companies and employees to enjoy the many benefits of remote work. 
• Career Planning Support: Some HRIS systems support career planning and development by providing access to training resources and performance management tools. This not only helps employees grow professionally but also aids in talent retention. 

In conclusion, implementing an HRIS in your organization can be transformational across various aspects of HR management. 

From automating mundane tasks to facilitating strategic decision-making and enhancing the employee experience, the right HRIS software can be a cornerstone to practicing HR most efficiently and effectively. 

Selecting the Right HRIS for Your Business

Selecting the right HRIS for your business is a critical decision that requires a thorough understanding of your organizational needs and a strategic approach to technology adoption. 

Now that you know what are HRIS systems, here's how to navigate the process of selecting the right one:

Understand Your Business Needs and HRIS Goals

• Evaluate your current HR processes and identify areas for improvement.
• Determine the HR functions most critical to your business operations, such as payroll, recruitment, or employee data management.
• Set clear objectives for your HRIS, whether it's improving efficiency, enhancing employee experience, or ensuring compliance.

Key Features and Integration Capabilities

• Must-have Features: List the essential features your HRIS must have. These could range from employee self-service portals, time and attendance tracking, to advanced analytics and reporting capabilities. In this process, ensure you tap into employees who will be the HRIS's daily users.
• Integration with Existing Systems: Ensure the HRIS can seamlessly integrate with your current tools and software, such as payroll systems or performance management platforms, to avoid data silos and enhance workflow efficiency. 

Vendor Evaluation and Selection

• Vendor Reputation and Support: Research vendors thoroughly, focusing on their reputation, customer support services, and the overall user experience they offer. 
• Customizability and Scalability: Choose an HRIS that can grow with your business. It should be customizable to adapt to your changing needs and scalable to accommodate your company's growth.
• Security and Compliance: Given the sensitivity of HR data, prioritize HRIS solutions that offer robust security features and compliance with relevant regulations.

By following these steps and considering your business's unique needs, you can select an HRIS that streamlines your HR operations and contributes to your organization's strategic goals. 

Remember, the right HRIS is a powerful tool that can transform how you manage human resources, making your work more organized, efficient, and aligned with the latest compliance standards. 

Choosing the right platform is crucial enough to involve everyone, from employees to the C-suite. Your company will run on an HRIS, so selecting the right platform is crucial.

HRIS Examples 

Even if you know what is HRIS, you may want to some HRIS examples.

Among hundreds of HRIS systems, some stand out in popularity, reliability, and ability to keep up with modern workforce trends like hybrid work and fractional roles.

These include:

Rippling

Rippling stands out in the HRIS field with "Rippling Unity," a pioneering platform that seamlessly marries HR, IT, and Finance into a unified system, highlighted by its advanced automation and user-focused design. 

HR Tech expert Josh Bersin lauds it as a "Trailblazer," noting its innovative structure and people-centric approach, despite its premium pricing, the platform's extensive integrations, and commitment to improving user experience make it a compelling choice for SMBs looking to streamline operations.

Check out our detailed review of Rippling.

BambooHR

BambooHR is considered the go-to HRIS for small businesses. It is praised for its intuitive interface and tailored functionalities, which cater especially to the evolving needs of scaling startups. 

Offering a comprehensive suite of tools in a user-friendly package enables a seamless shift from essential to sophisticated HR processes, setting itself apart as a more cost-effective alternative without sacrificing functionality.

Check out our detailed review of BambooHR.

Deel HR

Just one year ago, I never thought I'd have Deel as part of this list, but their recent investments into HR technology make them worth a mention.

Built for remote teams, Deel is a compelling choice for distributed small to midsized businesses, especially those with a global workforce.

And for up to 200 employees, Deel is completely free. 

So, while it may not boast the robustness or breadth of integrations found in more established platforms, Deel's seamless integration with global EOR services and modern self-service tools makes it an attractive option for businesses aiming to scale internationally without the hefty price tag.

Check out our detailed review of Deel HR.

Gusto

Gusto shines as a popular HRIS among small to medium-sized businesses. The platform evolved from a payroll-centric solution to a comprehensive suite that includes benefits administration, compliance, and employee experience. 

Lauded for its modern interface, automated payroll functionalities, and emphasis on compliance, Gusto simplifies HR processes with features like automatic tax filing and employee self-service. 

Affordability, ease of use, and strong customer service are some of the reasons why Gusto is loved by many SMBs. They prefer Gusto as a more focused and cost-effective alternative to competitors like Trinet HR and the ADP HRIS.

Check out our detailed review of Gusto.

Bob

Bob, a relative newcomer branded as HiBob, innovates by integrating core HR information systems functionalities with employee engagement tools, appealing particularly to smaller, modern companies. 

Bob emphasizes a user-friendly, social networking-inspired interface that enhances the end-user experience and supports hybrid and remote work.

While it may not offer payroll services natively or an integrated ATS, its global approach and focus on engagement—through features like celebrations, communities, and recognition.

Check out our detailed review of Bob.

For more, check our detailed guide to the leading HRIS Software.

AI and HRIS: What's New in 2024?

After ChatGPT launched in November 2022, the world hasn't been the same. AI in the Workplace is now more common than ever, and many companies are considering using AI in HR.

It's striking, however, that among the many impressive Top 40 AI for HR Platforms, none were in HRIS. As HRIS manages vast amounts of employee data, applying AI and making interfaces conversational could be extremely powerful.

However, most of the current success stories about AI in HR revolve around AI recruiting and talent intelligence. Especially in recruiting, AI recruiting software is taking over many menial tasks, improving the candidate experience while saving HR time and money.

In contrast, HRIS providers have yet to launch impactful AI features. However, as they do, we will be the first ones to report on it. 

Conclusion

The HRIS isn't what it used to be, and as HR becomes more data-driven than ever, choosing the right platform is key.

I hope this article on the meaning of HRIS has helped you sharpen your understanding of what is a HRIS system.

The right HRIS software not only automates mundane tasks but also empowers strategic decision-making, fostering a dynamic and compliant workplace tailored to employee and organizational needs.

If I can further support you, feel free to email or message me.