Today’s businesses face a competitive, complex and evolving environment. And a company’s people is a defining factor of success. HR software makes human resource management and operations easier and more efficient. Companies use HRIS applications for everything from helping staff members complete everyday tasks to effectively managing their workforce.
In this article, we’ll look at three key applications of HRIS platforms: core HR, workforce management and strategic HR. We’ll also cover some benefits and tips for choosing the right solution.
Here’s our roadmap:
- Core HR overview
- Core HR features
- Workforce management overview
- Workforce management features
- Strategic HR overview
- Strategic HR features
- Benefits of HRIS applications
- Selection tips
- Summary and next steps
What Are HRIS Applications?
HRIS (human resources information system) is a type of business software that enables companies to store employee information, manage common HR functions, and execute critical HR activities such as processing payroll and administering benefits.
Features of HRIS applications include an employee self-service portal, payroll, workforce management, recruitment and hiring, benefits administration, and talent management. These capabilities are often delivered through individual modules that form a unified suite of HR tools.
HRIS vs. HRMS vs. HCM
If you’re searching for HR software, you’ll inevitably run across various acronyms. The most common besides HRIS are HRMS (human resources management system) and HCM (human capital management). But are they the same thing?
It can be difficult to discern where one type of system ends and another begins. Further complicating the matter, there’s no consistency to how vendors brand their products. They might have different titles on the surface but the same underlying features.
As a software buyer, this can lead to uncertainty. After all, how are you supposed to know which type of software will have the features you need? Is an HCM solution better than an HRMS platform?
We covered this topic in depth in our article HCM vs HRIS vs HRMS: A Comprehensive Comparison of the Difference Between Them. It’s a good starting point for navigating the often perplexing world of HR software.
Applications of HRIS: Building a Strong HR Foundation
As mentioned, HRIS applications are valuable for supporting critical HR operations and initiatives. Let’s look at how you can apply HRIS capabilities in your business to deliver value.
Core HR Overview
Core HR provides software features for overseeing the operations HR departments traditionally managed. These functions include personnel tracking, payroll processing and benefits administration.
Owners or managers of small companies often handle HR functions personally. But as your small business grows, it becomes more likely that other important responsibilities will suffer as the tasks pile up. There comes a point where you can only juggle so many hats.
How can you know when it’s time for core HR features? If your business has become too large to handle the staff’s payroll and oversee the day-to-day administrative tasks, it’s probably time for an upgrade.
In some cases, businesses don’t have any dedicated system in place. Yes, they probably have software for running payroll — and possibly a spreadsheet for tracking employee info — but that may be the extent of their HR software.
On the flip side, you might have an HRIS that you’ve outgrown. It was great when there were only 20 employees to manage, but now that you’ve reached 70, the software doesn’t have nearly enough functionality.
No matter your situation, we recommend building a list of requirements to help pinpoint the key capabilities you should look for.
Core HR Features
When preparing to invest in an HRIS, it’s good to know what you’ll be getting at the basic level.
Keep in mind that products will vary by vendor and that the range of functionality offered is often determined by the size of business the solution is meant for. A product targeted at a global enterprise contains a lot more features than one aimed at a local small business.
For that reason, the list below is meant as a general guideline to give you a framework that can inform your search.
- Employee database. One of the fundamental features of HRIS applications is their ability to store each employee’s data. This consists of social security numbers, past employment details and each worker’s contact information.
- Benefits administration. A core platform also has features for managing employee benefits. This includes 401K enrollment, life insurance policies, and healthcare programs like medical and dental plans.
- Employee self-service portal. This is a pretty common feature. It allows employees to access and update their information. For example, they can enroll in benefits, track their PTO or pay stubs and change personal details like their address if they move.
- Payroll management. The system can manage employee salaries, contributions made to a retirement program, bonus information and healthcare deductions. It will also facilitate tax payments and direct deposits. Every company needs to run payroll, so this is a non-negotiable feature for those who don’t already have the process managed.
Workforce Management Overview
Workforce management (WFM) adds another layer to core capabilities. It revolves around supporting the daily aspects of managing your employees.
It also bridges the gap between core HR and strategic HR. The former focuses more on processes, while the latter focuses more on people. WFM blends both.
For instance, WFM enables your business to schedule and track employee work hours. At the same time, it delves into strategy by letting managers examine various what-if scenarios to optimize the workforce.
These are some of the main features that help you effectively manage your workforce:
- Scheduling. This is particularly important for companies that schedule shift workers. Juggling dozens or even hundreds of different employees can be overwhelming if done manually. Features range from automatic scheduling to schedule optimization. It can also alert employees of scheduling changes and notify management when staffing levels are insufficient.
- Employee attendance. The time and attendance component of workforce management allows hourly employees to clock in and clock out, often using a variety of methods. The system collects time reports for billing purposes as well.
- PTO tracking. Everyone needs time off. This feature tracks each employee’s sick or paid time off accruals and use. Furthermore, managers can receive notifications for missed or accomplished work goals.
- Compliance management. This feature ensures any necessary compliance documentation is kept on record for reports or audits. It can be as simple as a preset workflow for standard records (W4s, I9s, etc.) or as complex as a system that handles tax compliance, privacy laws and healthcare regulations like ACA.
- Employee performance. Supervisors or managers can conduct employee reviews (360-degree, annual, pulse, etc.) and track goals. Dashboards and other visualizations make it easy for managers and employees to view performance metrics.
Strategic HR Overview
HR is both operational and strategic. It requires day-to-day activities that help keep your company running smoothly. But it also provides the ability to develop and execute key strategies that promote the long-term welfare of your business.
The strategic side of HR software centers on your people and enables your company to promote growth. It does this by attracting and developing top talent for your business.
Platforms that focus on the strategic function of HR include a blend of applicant recruiting and analytics tools, along with features for supporting employee growth and development. This helps improve employee satisfaction and retention rates.
Strategic HR Features
The depth of functionality offered (and needed) depends on the type of business. Large organizations likely require advanced features such as succession planning (also called workforce planning), global support and sophisticated data analysis.
We’ll consider a few of the primary features that fall into the strategic HR category:
- Applicant tracking system. Tools that aid with the recruitment process include social recruiting, interview scheduling, a database for storing applicant information, candidate tracking, and metrics like cost per hire. Some products include features like the ability to perform background checks. And AI capability is becoming more and more interwoven into this process.
- Onboarding. While easy to overlook, the onboarding phase is a critical part of developing a strong relationship with new hires. The features here ensure they have a smooth experience — digital forms that support e-signature, automatic placement in required training courses, and welcome materials, to name a few.
- Learning management system (LMS). This allows you to oversee training programs that equip new hires with critical job skills and certifications. It’s also helpful for providing career development and continuous learning opportunities. LMS features include assessments, content libraries, third-party courses, social learning, gamification elements and learning paths.
- Analytics. Hard data is one of the most essential pieces of any HR strategy. To that end, HRIS solutions let you analyze a range of KPIs through visual tools such as dashboards and charts. Training courses completed, headcounts, top performers, budget forecasts and payroll summaries are a few sample metrics you can track.
4 Benefits of HRIS Applications
We’ve looked at what HRIS applications entail. Now it’s time to see how that translates to real-world benefits.
1. Increase Efficiency
One of the biggest advantages of using an HRIS is the boost in productivity that you’ll see — especially if your operations were manual before. Taking everything online improves how efficiently your company can run.
No more filling out stacks of paperwork by hand. No more need to update information in multiple places manually.
You can expect a learning curve if this is the first HRIS you’ve implemented. Even upgrading to a new system will require everyone to become accustomed to the new layout, features and so on. But having a system to do the heavy lifting in areas you lacked in before will greatly reduce the burden of responsibility on HR staff.
2. Reduce Errors
Removing manual entry greatly helps reduce the chance for errors to creep into records and other key sets of data.
Whether you choose a single platform or a set of integrated solutions, you’ll gain a seamless flow of data. For example, the payroll module can pull in employees’ timesheets to accurately calculate hourly wages.
This can eliminate everything from incorrect employee contact info to more grievous errors such as accidentally adding an extra zero to the end of an employee’s monthly paycheck.
It also helps you tackle compliance with confidence. Ensuring your company is in line with local and national laws surrounding employment and taxes is much easier with a system that performs calculations automatically.
3. Track Data More Easily
Keeping your company’s information organized is critical. And, in a lot of cases, it’s difficult.
We’ve all been there — spending way too long looking for some piece of information. Digging through file cabinets to find employee forms. Searching through email threads to locate time off requests and approvals. The list goes on.
HRIS applications centralize all this information and the tasks surrounding them. With everything stored in a single database, accessing and tracking information becomes much more manageable. And with a self-service portal added to the mix, employees can find and update their info with ease.
4. Provide a Better Employee Experience
HRIS applications help your company operate at a higher level. But they also come with a wealth of benefits for your employees:
- A fast, smooth hiring process from start to finish
- Control over things like benefits enrollment
- Opportunities to hone or expand their skills
- The ability to plan for and pursue their chosen career path
- Individual growth due to consistent feedback
That’s just the tip of the iceberg. With the right system in place, your employees — and your HR staff — can expect plenty of other benefits.
Selection Tips: How to Make Sure Your HRIS Is a Good Fit
It’s far too easy to pick a solution based on a checklist and force it into your daily operations. Yes, creating a requirements list is necessary, but you need a big-picture approach when evaluating your needs.
Here are a few considerations to help guide you:
- Is the system easy to understand and navigate? Employees should be able to use the self-service portal even if they’re non-technical. And the other tools in the platform should support manager and admin duties rather than hinder them.
- Does it lead to the benefits listed above? The benefits you see from an HRIS application will depend on your situation, but at the very least, it should improve productivity, cut down on errors and make your data easier to keep track of. And, of course, provide a top-notch experience for your employees.
- Can you justify the cost? Some systems, particularly those with extended capabilities, will feel like a lethal threat to your bank account. You need to have a clear idea of the ROI in order to compare it against the total cost of ownership (TCO).
- Will you receive the necessary support? Look beyond the software — make sure the vendor offers whatever training and support you need for a successful implementation.
The list above is just a starting point. Check out our article on HRIS questions for a full rundown of what to ask before you choose a new system.
Summary and Next Steps
HRIS applications have a lot to offer businesses of all sizes. From streamlining operations to supporting strategic initiatives, they’re vital in managing and maintaining your company’s most important asset: your people.
Core features enable companies to manage employee information while providing necessary services. Workforce management platforms go a step further into areas such as scheduling, attendance, reporting and compliance. Finally, strategic elements such as talent management
But finding that perfect match can feel like Russian Roulette — risky and unpredictable. There are a hundred different factors to consider, not to mention wading through all the marketing and sales jargon to figure out what a product can actually do.
Our free comparison report can help you make a smart, informed decision so you end up with exactly what you need.
What struggles are you facing in choosing an HRIS application? Let us know in the comments — we’d love to help!