Understanding the Basics of an HRIS

Having employees means that there’s a lot of information to keep up with. Without a human resource information system (HRIS), you’d have to keep track of paperwork, folders, numerous spreadsheets, and/or multiple software products that probably don’t talk to each other. Fortunately, using an HRIS provides a much easier solution to storing and accessing important employee data.  

Whether you work in HR or are a small business owner or founder, an HRIS can be a beneficial way to manage critical employee data, though exploring the many available options can seem a bit overwhelming. That’s why we’ve prepared this helpful guide. Learning more about the core functions of an HRIS makes it easy to see why this powerful HR tool is a must-have solution for every small business. 

What is an HRIS?

An HRIS is a human resource management software designed to store and organize employee data and manage and track various HR tasks, including performance reviews and payroll. It can also automate tasks, generate reports, and provide analytical insights for data analysis, predictive modeling, and strategic planning.  

It can be helpful to think of an HRIS as a digital hub for employee data that you can use to streamline processes, improve efficiency, and make data-driven business decisions. 

HRIS vs. HRMS vs. HCM

HRIS applications aren’t all the same; there are several different types of HR information systems. Based on their functionality, different acronyms are sometimes used to refer to different levels of systems. 

• HRIS: Systems referred to by the HRIS acronym typically focus on basic HR functions, such as employee data management, payroll, and benefits administration.

• HRMS: A human resource management system (HRMS) has all the features of an HRIS and talent management capabilities such as recruitment, onboarding, performance management, and learning and development.

• HCM: A human capital management system (HCMS) is the most comprehensive system. It includes all HRIS and HRMS features, plus strategic HR functions such as workforce planning, succession planning, and people analytics.

Software applications referred to by any of the acronyms above are examples of human resource information systems, but HRMS and HCM systems include additional features and functionality. 

Core HRIS Functions

An HRIS is a versatile tool that supports a wide range of HR functions. Its core functions include employee data management, self-service capabilities, payroll processing and recordkeeping, benefits administration, and compliance-related data tracking and reporting. 

Employee Data Management

An HRIS is a central repository for all employee data, including personal details, job information, and employment history. It ensures that this data—crucial for HR processes, reporting, and decision-making—stays organized and easily accessible.

Enhancing Employee Self-Service

A key benefit of an HRIS is the enhancement of employee self-service. Employees can access their personal data, update their information, request leave, and more. This not only empowers employees but also reduces the administrative burden on HR.

Payroll Processing and Recordkeeping

Payroll processing and recordkeeping are also key functions of an HRIS. An HRIS can automate calculating employee wages, deductions, and taxes, facilitate salary disbursement, generate payslips, and maintain accurate and up-to-date payroll records. This not only saves time but also reduces the risk of human error.

Benefits Administration

Benefits administration is a complex task that involves managing various employee benefits, such as health insurance, retirement plans, and paid time off. An HRIS simplifies this process by automating benefits enrollment, tracking, and reporting. It also provides employees with self-service access to their benefits information.

Compliance and Reporting

Compliance is a major HR concern. An HRIS can help ensure compliance with complex labor laws and ever-changing regulations by generating reports for audits, tracking compliance-related training, and maintaining records for legal purposes.

Additional HRIS Functions

Most HRIS applications include the core features listed above, and some have additional capabilities, such as: 

• Recruitment and onboarding 

• Performance and talent management

• Learning and development recordkeeping

• Time and attendance tracking

• Compliance and reporting

The Strategic Role of HRIS in Organizations

An HRIS is not just a tool for administrative tasks. With an HRIS, HR professionals can analyze data to identify trends, make forecasts, and develop strategies. This type of system can play a strategic role in an organization, helping to shape HR policies and business decisions in a way that leads to better practices, improved workforce management, and enhanced organizational performance.

HR Planning and Decision-Making

Strategic HR planning and decision-making are critical for organizational success. An HRIS supports these processes by providing accurate and timely data that can be used to analyze workforce trends, predict future needs, and make informed decisions. For example, an HRIS can help identify skills gaps, impact succession planning, and inform recruitment strategies.

Talent Acquisition and Onboarding

Talent acquisition and onboarding are other key HR processes that can be enhanced by an HRIS. For example, an HRIS can automate job postings, applicant tracking, and candidate assessments. It can also streamline the onboarding process, ensuring a smooth transition for new hires and, ultimately, leading to improved recruitment outcomes, faster time-to-hire, and higher employee retention rates.

Integration with Other HR Tools and Solutions

An HRIS does not operate in vacuum. It can integrate with other HR tools and solutions, such as employee benefits platforms, timekeeping applications, and learning management systems, to provide comprehensive HR data management.

Selecting the Right HRIS for Your Organization

Choosing the right HRIS for your organization is a critical decision that requires careful consideration of your organization's needs, budget, and future growth plans. Key factors to consider include: 

• Size of your organization

• Automation needs 

• Ease of use 

• Cross platform integration 

• Customer support

Software Scalability

Scalability is another important factor to consider. After all, as your organization grows, your HRIS should be able to grow with it. It’s best to choose a system that can accommodate more users and more complex HR functions when you need them, so that you don’t find yourself outgrowing the system you invest in now at some point in the future. 

Discover Justworks’ Scalable HRIS Solutions

If you’re ready to incorporate a scalable HRIS solution into your organization, Justworks has what you need. Whether you just want to start with a payroll processing solution or you’re looking for a robust system to handle all of your HR data management needs, we’ve got your back. We also provide other time-saving solutions, such as access to employee benefits, 24/7 customer support, and compliance assistance. 

Ready to explore your options and take control of your HR data? We’re here to help.