Human Resource Information System (HRIS): A Comprehensive Guide

One of the most-used software solutions in the management of HR processes is an HRIS. But, what exactly is it? What are the different HRIS systems available, what are the objectives they help fulfill, their functions, and importance? Well, to help you understand these in detail, we have compiled the article below. It contains all relevant information and answers to these questions to help you get started with the development of an HRIS as soon as possible.

Other than an HRIS, another important software used in HR is an HRMS. It is a common misconception that these software solutions are the same, but the truth is far from it. We also discuss the differences between an HRIS and an HRMS to help you understand the functionalities and objectives of both. Moving on, we will also talk about the complete design process of an HR information system to help you carefully plan your next decision.

So, what are you waiting for? Jump right into it and learn what an HRIS is all about and its principle functions, objectives, and importance! You can also get in touch with an expert HR software development company to receive a cost estimate and employ them for the development of a personalized HRIS for your business.

What Is An HRIS System?

An HRIS or a human resource information system is one of the top software solutions used by HRs for the proper management of different business processes. The primary objective of the system is to collect, organize, and maintain the employee data of a business. Most HRISs also consist of several features and functionalities that aid businesses in performing end-to-end Human Resource Management processes.

Generally, an HRIS system enables HRs to maintain recruitment details, manage the performance of existing employees, aid in their learning and development, and other important business processes. So, in essence, an HRIS can be said to be a complete software package that aids HRs and allows them to smoothly manage operations.

In simple terms, an HRIS can be thought to be a smart database of employee operations offering other advanced functionalities. The easier interaction and management of data and the added reporting capabilities help make the complete system more accessible and convenient. Ultimately, an HRIS (Human Resource Information System Software) helps ease the complication of different HR processes and allows them to efficiently fulfill their job responsibilities.

An HRIS can be run on the company’s own technical infrastructure (if it has the required capability) or on a cloud-based platform (the more convenient and frequently chosen option). In the second option, the company’s HRIS is hosted and run at a location that is outside the company premises, which makes it more accessible.

Types Of HRIS Systems Available

HR processes are at the core of the smooth functioning of companies across all verticals. This is why every company has a customized HRIS for the proper performance and management of their business process. However, it is obvious that not every company can have the same type of HRIS.

To accommodate the different needs and preferences of businesses across varying verticals, there are a number of HR information systems available in the market. A human resource information system and its functionalities also depend on the size of the business, i.e. an HRIS for a small business will differ from that of a mid-sized company.

Irrespective of the capabilities and functionalities offered by an HRIS, they must fulfill the set objectives of human resource information systems. Another important point to note is that an HRIS’ functionalities will also depend on the company’s offered services and verticals.

As a business, you do not need to be worried about the type of HRIS that best meets your business needs and fulfills current industry demands. You can get in touch with a professional software development company and transfer the burden to their shoulders. Ensure that the company has proper experience and knows how to develop the best HRIS according to industry standards.

Objectives Of Human Resource Information Systems

Now that you know what an HRIS is and the different types available, let us learn about the objectives of human resource information systems. This will help you better understand their needs and set the tone for the upcoming sections.

The prime objective of an HRIS is to assist and support a company’s human resource management and development team. An HRIS must help them operate efficiently, handle the different HR management processes, maintain and offer accurate information for better decision-making, and manage the business’ policy framework and analysis.

Some other objectives of human resource information systems are:-

• To identify the information needed by the HR for every team and business process
• To form and maintain a comprehensive data of employee information to fulfill different business needs and requirements
• To produce the data in the necessary format as and when needed to the appropriate personnel
• To develop complete technical and functional specifications to help the HR team
• To design the necessary information processing and updation algorithms
• To use the most efficient method and algorithms for data processing and analysis
• To identify what information needs to be retrieved and reported back
• To prepare relevant and supporting documentation for easier learning and management of the HRIS
• To provide the necessary security and protect confidential employee information
• To maintain the existing information and keep it up-to-date

From the numerous objectives of human resource information systems mentioned above, it is clear that the primary aim of an HR information system is to help the HR team function efficiently and better manage the different business processes. Let us now move on and look at the different functions of human resource information systems.

Functions Of Human Resource Information Systems

Since an HRIS functions as a primary HR tool and software solution, the system consists of a wide range of functionalities. These include:-

Applicant Tracking System

One of the most obvious functions of human resource information systems is an automated application tracking system that helps HRs manage applicant details and smoothly perform recruitment functions. The system allows HRs to store candidate information and resume to help them properly match their profile with the available roles and job requirements. This ensures that they efficiently screen applicants from the available pool and shortlist them for future rounds.

Payroll Automation And Management

Other than managing the data of applicants, a prime function of an HRIS is to automate and manage the payroll of existing employees. All HRs need to do is enter the new employee’s bank details, their employment details like contract type, and salary. Then, based on attendance, time logs, and other constraints, payment orders and payslips are automatically generated.

Employee Benefits Administration

Employee benefits like compensation and allowances are an important part of the hiring contract. Your HRIS must be able to handle, store, and manage employee benefits data to ensure they receive proper compensation. Advanced HRISs also implement employee self-service models (explained in detail in another section) to enable employees to look for and select the appropriate benefits. For example, one employee might be looking for details on the transportation benefits offered, while another might be looking for information on paternity leave.

Employee Time And Attendance Data

A relevant factor HRs must record, especially to ensure proper payment to shift workers and contractual employees, this module must record and store information related to employee attendance and the clock-in and clock-out times. Otherwise, it becomes quite hectic for managers and companies to keep track of the employee’s attendance for proper reimbursement. This process can also be automated with the help of biometric attendance which helps track accurate data and efficiently detect time issues.

Training

L&D is a key element of employee management and can help boost efficiency and productivity. The training module allows HRs to easily track employee certification and learning details along with information on their current skills and qualifications. This aids in better analysis of an employee’s capability and helps HRs better outline future courses or training modules. Most software development companies refer to this module as an LMS or a Learning Management System, which can also be created as stand-alone software.

Performance Management

A crucial part of employee management is the maintenance and analysis of their performance data. With this module, performance ratings can be easily generated as and when required, to ensure employees are up-to-date with technological advancements and skills. This can also help better identify probable issues to ensure problems can be detected at an earlier stage.

Succession And Replacement Planning

For the guaranteed success of any business process or project, the roles and responsibilities must be clearly divided among employees. Moreover, organizations must be equipped to handle any inconveniences and delays. A common problem that might arise is the absence of an employee or their transfer to other crucial processes. In this case, it is necessary to create a talent pipeline and have replacements readily available. This helps in the better management of the key roles and responsibilities of an organization and better guarantees project success.

Employee Self-Service And Management

Although we have discussed this functionality in short in a previous section, we feel it is necessary to discuss it in detail. Employee self-service modules are a step towards allowing employees and their direct supervisors to have direct control over their data and better manage it. For example, these modules allow employees to check their available leaves and put in requests all by themselves. As soon as the request is put in, the system saves the information and on approval, makes changes to the number of available leaves in the portal. This also helps in easier analysis of employee benefits to enable better tracking and maintenance of employee payroll and benefits data.

Reporting And Analytics

Although a rarely implemented module, the reporting and analytics feature in an HRIS can be of great help to organizations. They can help HRs automatically create in-depth HR reports to easily view information like employee performance, absence, turnover, and more. With advanced technologies like data analytics and AI, systems can also provide detailed insights that can help HRs make better decisions quickly.

Why Include Reporting And Analytics Functionalities?

As discussed, most HRISs do not include reporting and analytics functionalities, but these features can aid your business and help you take it to the next level. Before we discuss how it can help your business, let us learn how current HRIS systems work and the need for this feature.

Most HRIS systems work as transactional systems, meaning any changes to the database is recorded as a transaction. For example, the joining of an employee is an event and when their details are entered, a record is created, a transaction is recorded, and the employee is labeled as an active employee. When they leave the company, a new transaction is recorded that changes the person’s employee status to terminated/inactive.

It is difficult to analyze these transactions and create reports to better aid business processes and decisions. Moreover, not all HRIS systems implement all the discussed functions of human resource information systems on a single platform. For example, a company might create different portals for the maintenance of the employee’s payroll, LMS, and ATS details. This makes it all the more difficult for HRs to create all-in-one reports and make better business decisions.

Building an all-in-one HRIS that includes all the necessary functions of human resource information systems can aid in better reporting and analysis. Want to get such an HRIS developed to enjoy the added convenience and accessibility? Get in touch with us to get access to a team of IT professionals skilled in the development of the industry’s best HRIS systems.

Importance Of Human Resource Information System (HRIS)

As is clear from the sections discussing the functions and objectives of human resource information systems, an HRIS has a range of benefits that can help your business. This is why most companies implement a functional and advanced HRIS system irrespective of their size and business process complexity. Some reasons explaining the importance of human resource information systems are as follows:-

• Proper maintenance of records – A key function of an HRIS is the proper storage and management of employee data. The system also allows HRs to conveniently change employee data and track them as and when needed.
• Compliance – Companies need to comply with different policies and protocols in place, which is why they need to maintain relevant data. Some commonly-stored information includes – employee identification, resources and other materials that employees have access to, tax information, and mandatory certification expiration dates. This also helps the company handle situations like the theft of data or fraud and take the appropriate action.
• Efficiency – An HRIS stores necessary information in a single platform which not only helps save time but also ensures HRs can easily modify data. Using an HRIS to store and manage data is more efficient than using paperwork to do so.

The above benefits make the importance of human resource information systems clear and showcase their need. Another point to keep in mind is that although the relevant data for small companies can be managed with the help of Excel and spreadsheets, they can get quite cumbersome. Moreover, companies must stay prepared to efficiently scale their operations in the case of future business expansion.

Differences Between An HRIS And An HRMS

Although the terms HRIS and HRMS (Human Resource Management System) are used interchangeably, there are a few differences that HRs and companies must keep in mind. Generally, an HRMS provides greater functionality by implementing features like capital management and talent management.

Some common talent management functions that the software implements are:-

• Employee onboarding processes
• Succession Pipeline
• Career development and upskilling planning
• Learning management and analysis

The capital management functions an HRMS offers are:-

• Work tracking, management, and assignment
• Time entry, evaluation, and management
• Workforce management processes

Designing An HRIS System

The designing of an HRIS system will depend on the business niche, industry demands, and other factors. However, software development companies must follow a standard design and development process that is outlined below for your reference.

The steps and processes for the proper design and development of a functional HRIS system are as follows:-

• Planning And Research – Before developers directly jump into creating an HRIS system, they must identify the objectives of human resource information systems they need to fulfill. This will help them better understand the functionalities to be added and the processes to be carried out.
• Organizing Information Flow – The flow of information throughout the application needs to be systematic and methodical. This will help smooth communication and boost the efficiency of the end-user. The decision must be taken by the system designer before it is communicated to the design and development team.
• Implementation – The design flow discussed in the previous step must be properly implemented by skilled developers in this step. In case you are looking to upgrade your existing HRIS, ask your system design team to replace the old information flow with an updated one to allow the development team to understand the necessary changes and implement them.
• Feedback – Since businesses grow and industries evolve, an HRIS operation might also change. This is why it is necessary to obtain regular feedback and ensure the HRIS remains productive and benefits the HR team.

For more details about our Important Characteristics Of A Company’s HRM

Conclusion

HRIS systems are key to the proper maintenance and management of employee data for better functioning of the HR team. We hope the article helped you understand the objectives, functionalities, and benefits of an HRIS to help you decide on the features of your HRIS for added efficiency and productivity. Interested in getting a customized HRIS developed for your business? Get in touch with a professional software development company for the proper design and development of an HRIS that best suits your unique needs and demands!