What is an HRIS & how do you know you’re using it the right way?

Without human resources information systems (HRIS), today’s organizations wouldn’t be able to scale. Once industry leaders began to recognize how HRIS and unique HR platforms could save them hours of administrative work, help them cut costs, and boost employee engagement and performance, companies of all sizes and fields started adopting HR solutions. Today, the HR tech market is worth an estimated US$28.3 million. (1)

However, the rapid proliferation of HR platforms introduced another hurdle: HR software sprawl (2). Companies end up with multiple platforms (frequently with overlapping capabilities or with functional gaps) and often don’t leverage all of their benefits; in fact, only 24% of HR professionals say their teams are getting the maximum value from their HR tech stack. (3)

Now that many organizations are in an era of cost-cutting (4), HR leaders are looking for more consolidated solutions. And if they can’t find alternatives quickly enough, they may even consider eliminating people-centric tools that have demonstrated a positive, year-over-year impact on employee engagement, retention, and performance — metrics that are essential to business growth.

Thankfully, in today’s context, there are more all-in-one HRIS platforms that can help you streamline the administrative aspects of HR and enhance the employee experience at the same time. But what do human resources information systems do? With help from experts, we define what an HRIS is — and how to know if you’re using it the right way — in this article. 

1. Future Market Insights, 2024
2. SHRM, 2024
3. Gartner, 2024
4. CNBC, 2024

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What is a human resources information system?

A human resources information system, or HRIS, is a kind of software that companies typically use to:

• Manage employee information
• Stay compliant with labor and security regulations 
• Automate processes like benefits administration, payroll, time tracking, and training

Even more crucially, robust HR information systems can analyze engagement, performance, employee training, and demographic records, so C-level leaders and people managers can develop more data-driven people strategies.

The overall goal of the modern-day HRIS is to improve the employee experience rather than create more bureaucratic busywork that creates barriers between leadership and other team members. 

And what do team members need besides a user-friendly HRIS interface? As employee experience expert Joris Luijke explained, team members need HR platforms that are:

• Employee-centric — Create intuitive and user-friendly systems that are integrated into the flow of work. Understand and design with the employee journey in mind.

• Personalized — Only notify someone when it’s really relevant to them. Offer features that are tailored to individual needs.

• Proactive — Use deterministic systems and AI to predict and address employee needs, transforming the experience from good to exceptional.

• Seamless — Ensure HR systems integrate with or leverage other technologies for a cohesive ecosystem.
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What do human resources information systems do?

Today’s HR information systems can do a lot more than their predecessors, and they’re moving in a more employee-centric direction. 

“In the 80s, systems like ADP and PeopleSoft introduced the HRIS to better manage complex HR tasks related to payroll and employee records,” says Joris Luijke. “They were designed for HR (and finance), not for employees. Over time, HRIS platforms added HRM modules, like performance management and recruiting.” 

Today, the HRIS has a more strategic role to play for managers and organizations.

According to Senior People Ops Manager Samantha Sterkenburg (Leapsome), “HRIS platforms are not just being used to track time off and run payroll; these systems now help leaders make informed, data-driven decisions and engage their teams.”

Let’s see how these HRIS features solve specific business problems for companies today. 
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Employee information management

HRIS platforms allow you to upload, organize, streamline, and protect crucial employee information in one central place: like name, address, email, phone number, as well as relevant tax, benefits, and payment data. Employee information systems have become even more useful with the globalization of the workplace and the rise of dispersed teams. 

For instance, many HRIS databases offer configurable rules, allowing global companies to work with international employees and freelance contractors seamlessly and in compliance with their local regulations. 
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Onboarding

When companies are looking to scale quickly, they often use an HRIS management system with onboarding features to automate the process of everything from getting set up with hardware to reading and signing essential documents. They also leverage onboarding tools to set employees up with the self-paced training and tasks they’ll need to complete in order to adapt to their new role quickly and seamlessly.
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Training & development

HR information systems may also offer training and career development tools that you can use to create customizable, self-paced learning paths for team members.

So, instead of outsourcing employee development and hiring an expert to train team members in person, you can design multimedia development experiences that are truly engaging — using quizzes, videos, reflection tasks, and gamification elements.

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Performance management

Enterprises like Apple and Block have adjusted their performance review process in favor of ongoing “performance enablement” that prioritizes employee development. Companies are increasingly looking to emulate this approach to performance management. 

That’s one reason why we’re seeing more HRIS software that allows you to streamline the entire performance management system. For instance, HR platforms like Leapsome allow you to handle the various moving parts of the performance enablement process — like collaborating on performance goals, scheduling career development meetings, and automating regular 360° reviews to see if team members need support to meet their development targets.
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Payroll management

When you’re handling employee tax information and trying to pay people accurately and promptly on a large scale or for a global organization, one small mishap could cost you more than the salaries. It might even lead to costly legal complications with local regulatory bodies.  

With an HRIS payroll tool, though, companies can store relevant tax documents and pay employees from one platform. Team members can also typically access their pay stubs and payment information from anywhere with their HRIS payroll system to keep better track of their own finances.
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Time & attendance

It’s much simpler for team members to take vacation or sick days when there’s a simple, standardized approval procedure for everyone to follow. 

That’s why many HR information systems include automated time and attendance features for requesting and approving paid time off (PTO). They’ll also automatically upload this data to a centralized calendar so everyone can keep track of who’s in and out of the office. Best of all, this makes it easier for HR teams and managers to track how many of their employees are making full use of their PTO and who they need to check up on (to ensure they take time away from work!).
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How do you know your HR information system is working for you?

According to HR practitioners, an HRIS should make less, not more, work for employees. “You know you did things right when everyone in the organization can navigate the system with ease and find the data they need, and when workflows become increasingly automated,” shared Samantha Sterkenburg. 

However, the people ops expert acknowledges that procuring and implementing the right HRIS can take time. 

“There are so many products out there that it can be overwhelming! I think a business really needs to first understand its budget, size, office locations, how much it plans to scale, etc.” Samantha added. “Once you find the tool that checks all the boxes, implementation takes lots of custom configuration, testing, training, solid communications, and ongoing support.”

Most importantly, your HRIS should help you improve your employee engagement and performance metrics. While it may be tempting to nix performance management and survey features when streamlining your HR tech stack, you risk damaging employee experience in the long term. 

“It’s for sure disappointing,” Samantha says of companies cutting engagement and performance tools for budgetary reasons, even when these solutions have proven their value year over year. “Employees who are engaged and high-performing keep a business moving forward. Why wouldn’t you want to retain and track those metrics?” 
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What to consider before implementing an HRIS

“Make sure you know your core people processes and how those would have to run in an ideal world to support all users best, automate as much as possible, and reduce unnecessary tasks for all stakeholders. Set this idea as a benchmark for your HRIS implementation.”— Leapsome’s People Partner & Senior People Ops Manager Michelle Severin on how to choose the right HRIS for your organization 

If you’re looking to pare down your HR tech stack in favor of a consolidated, multi-feature HRIS platform, it’s essential to think about:

• Your goals for using an HRIS — What objectives, besides saving time and money, are motivating your need to invest in an HRIS? If you’re unsure, it time to conduct a analysis to audit your current people strategies and procedures to identify areas for improvement. Use those gaps to inform your short-term implementation plan.

• Your current process for internal governance — According to co-founder and principal HR analyst at RedThread Research Stacia Garr, you want to avoid the issue of shadow IT — this happens when someone in your company purchases software solutions “without coordinating with a central body.”
  
  Rather than creating a strict approval system that could stifle innovation, Garr recommends “a two-track strategy of pilots and experimentation, with some tech on one track, which can be decentralized, and then bigger, managed and centrally aligned tech investments where the use cases have been proven.”

• How you’ll prove and track return on investment (ROI) — Other than the provable time and resources you’ll save, get specific about the indicators you’ll look for to determine if your HRIS is worthwhile(such as engagement and performance).
  
  ‍“Pick a couple of KPIs or impactful initiatives from your OKRs that stemmed from engagement survey results and present their success,” Leapsome’s Senior People Ops Manager Michelle Severin suggests.
  
  “Over time, you can prove ROI with numbers by looking at the engagement scores. You’ll also be able to learn more about who your top and lower performers are — so emphasize their increased productivity, or time saved through performance management, and how much you’re saving by retaining top performers.”

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A solid HRIS solution can ease your administrative burden and allow you to streamline everything from onboarding to time tracking in one place. But with integrated payroll and other administration tools, HRIS platforms can also give you peace of mind that you’re staying compliant with local labor and tax regulations.

Still, we know you have a few more strategic aspirations for your people beyond saving time and money. You also have ambitious retention and employee experience targets to meet and want to make work more enjoyable for all team members.

Leapsome can help. Our holistic HR platform for employee enablement is about to become a truly all-in-one solution that unifies people data, shoulders your administrative load, and streamlines your HR tech stack. On top of all the HRIS features you need, Leapsome offers tools for goal setting, performance management, engagement surveys, employee learning, and more.
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FAQs about human resources information systems

What’s the difference between an HRIS, an HRMS, and an HCM?

A human capital management (HCM) system — also called a human capital information system — typically offers a full suite of HR and spend management tools, like expense tracking and corporate cards.

On the other hand, an HRIS traditionally focuses on employee information management. A human resource management system (HRMS) is typically designed to manage entire employee lifecycle workflows for recruitment, onboarding, and development. 

It’s important to note, however, that it’s common to see overlapping features among all of these types of platforms, and we’re starting to see more consolidated versions on the market.
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What are the five different types of human resources information software

The five kinds of HR software are:

• Operational, supporting HR teams with functions like hiring, promotions, transitions, and overall talent management.
• Strategic, focusing on analysis, decision-making, and goal-setting tasks.
• Tactical, offering data to help with overall efficiency, resource allocation, and compliance concerns 
• Limited-scope or specialized, targeting one area like payroll or benefits administration
• Comprehensive, as an “all-in-one” solution that supports a wide range of HR functions