Elements of a Strong HRIS

by J.B. Maverick

4 min read

For your company’s human resources information system (HRIS) software to be successful and your entire business to thrive, it’s vital all the components of your human resources department work together effectively.

Human Resource Information System

HRIS, also commonly referred to as a human resource management system (HRMS), is the place where information technology and human resources cross paths, making it easy for you to manage worker-involved activities electronically. Your company can use an HRIS to oversee activities and job functions related to accounting, human resources, payroll, taxes, and management. HRIS software is ideal for small businesses because it simplifies multitasking, allowing owners to control those factors without dedicating much time and money.

Selecting the Right HRIS for Your Company

There are several elements to consider when looking for the right HRIS for your business. The selection process can get complicated due to the large volume of HRIS software available to choose from. Take your time to find the combination of options that best meets the particular needs of your small business. Make sure you know the areas where you need the most assistance, cross-referencing each HRIS and its services with your list of requirements. Explore HRIS options with more than one source. You may benefit from asking customers for suggestions or checking out online reviews. Make sure whatever system you choose has some type of built-in security, such as requiring a password to gain access, to protect the privacy and safety of your company and employees. Different systems have different security controls, so factor this aspect into your selection process. If you have the necessary space and manpower, you might designate one employee to watch over who accesses your HRIS, which helps ensure your company’s information doesn’t leak or get used inappropriately. Choose a system that can adapt to changes in your company. As a small business, you might only have a staff of five now, but that’s likely to change over time. Try to envision likely future HRIS needs alongside your current requirements.

Successful Implementation

Successfully implementing an HRIS system requires some specific steps to make the process go as smoothly as possible. To start, you need to personalize the system to work with your company’s standard operating policies and procedures for things such as payroll. You may need to connect the HRIS with other data systems, and this can require some extra training for employees. When you first connect the HRIS with existing systems, you can assign specific individuals to deal with interfacing each individual system, including ERP and payroll. Putting an HRIS into action can also serve as a good opportunity to get current information from all your employees. These systems require you to input some basic information, such as employee hire dates, illnesses/injuries, vacations, emergency contact information, payroll history, disciplinary action history, and training records. Collect all this information, which you probably have stored in different formats, and transfer it into one primary format in the new HRIS system. Make sure to collect and store updated and accurate information to ensure your new HRIS works at maximum efficiency levels. Keep in mind that preparing, implementing, and using a new HRIS comes with some significant costs. Before you consider setting up this system, be sure your company has sufficient cash flow to handle unexpected additional expenses that may arise from the initial implementation. Also, plan for the time and resources required for the initial HRIS data collection and setup.

Benefits for Small Business Owners

For small businesses, having an HRIS saves a major amount of time and hassle. Without such a system, you have to devote a significant amount of time you could otherwise spend growing your business to keeping up with information the HRIS can track automatically. With an HRIS, you have easy access to all pertinent information about tax withholding information, vacation time, payroll data, background cheque information, identification numbers, and current employee addresses and contact information. When you keep accurate records of employees’ vital information, it helps your company remain in compliance with all applicable employment and tax laws. Using an HRIS system can also be a major benefit when prepare company taxes because it consolidates much necessary information in a single place.

Holistic versus Standalone HRIS

There are two commonly used approaches to human resource management. If your company only has a few HR issues, then a standalone HRIS might be most appropriate for you. This approach lets you implement a few practices or tools to keep your HR department in check. An advantage here is you can effectively devote more time and energy when you have a limited number of focus areas. It also shortens the length of time between development and implementation, and this standalone approach typically causes less distraction to your business as a whole. The more involved holistic HRIS approach can benefit you if your small business has a fairly large number of employees and different departments. You should keep in mind, however, that totally redesigning and overhauling your company’s HR department can be costly, both in money and time. It can also cause serious temporary disruptions as you transfer data into the system. Before you consider the holistic approach, understand all the implications for your company and determine if the positives outweigh the negatives. One of the most important activities of running your company is managing all the aspects of human resources. Having a strong HRIS can ultimately help you handle human resources-related tasks more smoothly and efficiently, conserving both time and money.

References & Resources

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