A human resource information system (HRIS) is an application that collects, processes, stores, and manages an organization’s employee data. It is widely used by human resource (HR) departments, enabling staff to perform essential functions, such as recruitment and performance management.

Most HRIS solutions are cloud-based, meaning the data they contain can be accessed through the Internet and they run outside the company’s perimeters. But some HRIS applications are also installed directly within an organization’s premises. For this setup, employees have to be on-site to access the system.

Read More about a Human Resource Information System (HRIS)

Aside from obtaining basic knowledge of what a human resource information system is, it’s also important to learn its functions and benefits. We discussed these in detail below.

What Are the Functions of an HRIS Solution?

Integral to what a human resource information system is are these five components:

Functions of an HRIS
  • Time and labor management: An HRIS application must monitor every employee’s working hours. Workers usually have to complete a set number of hours per week, and they log this information by punching in either biometrically or manually. The HRIS software must be able to capture this data.
  • Payroll processing: An HRIS software can automatically compute salaries since it can access employees’ completed work hours. It also includes taxes, benefits, and rewards in the computation, doing away with manual payroll processing.
  • Data management: The primary function of an HRIS is to centralize all employee information in a readily accessible database. The employee data stored in an HRIS includes work and education background, performance review, emergency contact, and compensation details.
  • Talent acquisition, onboarding, and retention: Organizations must be able to systematically bring in new employees, train them, and provide rewards and career growth plans. An HRIS application can help the HR and recruitment teams with this function by making it easier to monitor employee progress and provide training.
  • Employee interfacing: Most HRIS applications allow employees limited access to the system. They can log in to view and update their personal information, select retirement benefits, and change their bank details. Giving them the ability to do these functions helps save time since they don’t have to reach out to an HR representative whenever they need to change their records.

What Are the Benefits of an HRIS?

Given the five primary functions of an HRIS discussed above, we can see how it makes HR tasks easier. Some specific benefits of having HRIS software include:

  • Fewer errors in payroll processing
  • Streamlined workflow and work scheduling
  • Faster recruitment process
  • Employee performance monitoring
  • Centralized employee database access
  • Easier compliance with tax and benefit regulations

What Are the Differences between an HRIS and an HRMS?

Now that you know what a human resource information system is, you may be wondering how it compares to a HR management system (HRMS). The two terms are often used interchangeably and have become the same over the years.

However, they originally differed. An HRIS was initially used for record keeping but later involved more complex HR functions like payroll and recruitment management.

On the other hand, an HRMS can perform everything an HRIS can, with the addition of automation. HR personnel can automate payroll processing, scheduling, and labor management.

What Are Some Examples of HRISs?

The HRIS market is enormous, with experts estimating it will reach a value of US$33.57 billion by 2030. That means there are countless HRIS providers, but among the most popular and dominant are:

  • SAP SE (Germany)
  • Workday, Inc. (U.S.)
  • Kronos, Inc. (U.S.)
  • Automatic Data Processing LCC (U.S.)
  • Oracle Corporation (U.S.)
  • Talentsoft (France)
  • Accenture PLC (Ireland)
  • Ultimate Software Group, Inc. (U.S.)
  • Cezanne HR Ltd. (U.K.)
  • Ultimate Software (U.S.)
  • IBM Corporation (U.S.)
  • PricewaterhouseCoopers (India)
  • Mercer LLC (U.S.)
  • NetSuite, Inc. (U.S.)
  • Ceridian HCM, Inc. (U.S.)

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It’s difficult to imagine medium-sized and large enterprises without an HRIS solution. Using spreadsheets to compute the work hours and process the payroll of dozens of employees would be time-consuming and prone to mistakes.

An HRIS has become an integral part of HR, allowing staff to automate critical processes to save time and avoid human errors.

Key Takeaways

  • An HRIS is any software that stores employee information, captures actual work hours, processes payrolls, and tracks employee performance and other tasks.
  • HRIS applications can be on-premises or cloud-based, but most organizations use cloud-based HRIS solutions.
  • HRIS and HRMS interchangeably refer to systems that help HR departments with their functions.
  • The five basic components of an HRIS are time and labor management, payroll processing, data management, talent acquisition, and employee interfacing.
  • The benefits of an HRIS include easier tax compliance, increased HR productivity due to a streamlined workflow and management, and fewer errors when processing employee salaries.
  • Examples of HRIS providers are Accenture, IBM, Oracle, and Workday.