Choosing the Best HRIS For Your Company: 8 Important Factors

A Human Resource Information System (HRIS) can be a powerful solution to manage your organization’s employee data. But that’s not all it can do.

In addition to serving as the central hub for employee data, an HRIS can seamlessly manage your payroll, benefits administration, onboarding, performance management and other core HR workflows.

What Else Can an HRIS Do for You?

HRIS software applications can store and organize employee information, automate tasks and improve communication. Benefits of an HRIS include:

• Boosted efficiency. Automating repetitive tasks like payroll processing and benefits enrollment frees up valuable time for HR teams, reduces human errors from manual data entry and improves accuracy.
• Centralized information. Besides improving access to employee data, an HRIS becomes the go-to place to find company policies, announcements and contact details. This eliminates sending unnecessary emails, outdated documents and confusion about where to find important info.
• Company-wide announcements and targeted communication. HRIS systems can broadcast company-wide announcements or targeted communications to specific departments or teams. This ensures everyone receives important updates and information promptly and consistently.
• Improved compliance. An HRIS helps with compliance efforts by automating tasks like tracking completed training and generating audit-ready documents. It also streamlines data management, making reporting more efficient.
• Data-driven decisions. HRIS reporting tools provide valuable insights into workforce trends, such as turnover rates, skills gaps and compensation analysis. This allows for data-driven decision-making in talent management and strategic planning.

Criteria For Selecting HRIS

With so many options available, selecting the HRIS that’s right for you can feel overwhelming. Here are eight criteria to help you choose an HRIS with confidence.

1. Company Size and Needs

Scalability — or a platform’s ability to align with future needs as your business grows — and features tailored to your specific needs are crucial.

2. Core Functionalities

It’s important to identify all the HR processes you want to automate. For instance, do you want a system that offers applicant tracking, in addition to payroll, benefits administration and performance management?

3. Integration Capabilities

If an HRIS can’t properly integrate with your existing payroll or accounting software, your data will be in silos. In practical terms, this means you may end up having to use spreadsheets to make the systems talk to each other — a real productivity killer.

Instead, look for a system that can seamlessly integrate with your existing software, with the ability to send and receive data without manual entries or delays.

4. Employee Self-Service

A system with a user-friendly portal for employees to access pay stubs, update personal information and request time off will significantly reduce the burden on your HR team. Moreover, it gives employees the ability to monitor their own information.

5. Data Security

The U.S. doesn’t have a comprehensive national data privacy law — not yet anyway. The American Privacy Rights Act of 2024, if passed, may bring sweeping changes to HR.

For now, various state-level data privacy laws create a patchwork of laws, which can get a bit tricky for multistate employers. As a result, you’ll need to verify the system’s security protocols and compliance with relevant data privacy regulations, such as the California Privacy Rights Act, Colorado Privacy Act and Utah Consumer Privacy Act.

6. Implementation and Support

A reliable vendor ensures a smooth transition and provides timely assistance with technical issues. Choose a vendor with a track record of excellent implementation assistance and ongoing customer support. If you missed it, check out the Best HR Tech Vendors for Small Businesses.

7. Mobile Accessibility

An HRIS with a mobile app is a must-have for a lot of companies. Mobile apps improve the employee experience by offering a more intuitive interface, providing flexible communication options and supporting remote and hybrid work arrangements.

8. AI Functionalities

Some advanced HRIS options leverage AI for functionalities, such as automated resume screening, chatbot-powered employee support or predictive analytics. Ask HR tech vendors if their platforms offer any AI functionalities — because they can really make your life easier.

Expert Discusses HR Tech Upgrades

On the HRMorning podcast “Voices of HR,” Patrick Sayers, president of Newcastle Research, acknowledges that choosing the right system can be a difficult task.

He pointed out that an important part of selecting an HRIS is figuring out:

• what you want to do with it
• what problems you’re currently having, and
• what — if any — existing technology you’re already using.

For more advice from Sayers, check out the full Voices of HR episode.