HRIS: For which companies an HR information system is worthwhile

© / Adobe Stock

HRIS: For which companies is an HR information system worthwhile

Imagine if there was a system that bundled all important HR information in one central location and at the same time enabled the automation of tasks such as payroll, time recording, duty scheduling and onboarding. This is exactly where HRIS comes into play! This acronym stands for the Human Resources Information System, a digital tool that optimizes HR work and at the same time takes the employee experience to a new level.

In this article, you will learn what an HRIS is and what it can do. We provide examples of applications and show which companies would benefit from an HRIS – and which would not.

Along with tips on setting up an HRIS, we also list some common mistakes to avoid.

Examples: How an HRIS is used in a company

Before we look at the details of HRIS, let’s first look at some examples that show what these systems can do for companies and their employees.

Example 1: Small company automates recruiting and onboarding

A small startup with 50 employees wants to digitalize its HR processes and increase its attractiveness as an employer at the same time. With a cloud-based HRIS system, they can easily publish job advertisements on various platforms and manage applicant data centrally. The system helps them to structure the application process and simplify communication with candidates. Automated workflows in the onboarding process allow new employees to be trained quickly without overloading the HR department with paperwork. New employees feel welcome and well looked after, which strengthens employee loyalty.

Example 2: Large corporation uses HRIS for talent management and strategic decisions

A large corporation with several thousand employees wants to improve its talent management strategy and make data-based decisions in HR. With an HRIS, performance appraisals can be carried out digitally and development plans can be created for employees. The system collects and analyzes employee data that provides information on turnover rates, employee satisfaction and the effectiveness of personnel development measures. These findings help the company to optimize its HR strategy and ensure its long-term competitiveness.

Example 3: Educational institution optimizes benefits analysis

An educational institution with many teachers and administrative staff wants to increase its attractiveness for potential employees. They use HRIS to analyze which benefits are most attractive to employees. This information helps the educational institution to put together a competitive benefits package to attract the best talent.

Following these examples, we will now give a brief definition of an HRIS and differentiate the term from similar constructs.

Brief definition: What is an HRIS?

An HRIS is software that supports the HR department in its tasks. It serves as a central database and platform for all important employee information and enables the automation of various HR processes such as payroll accounting or time recording. This allows HR employees to work more efficiently and concentrate on strategic tasks. An HRIS offers employees convenient self-service options. For example, they can submit vacation requests or view payslips.

What is the difference between HRIS, HRMS and HCM?

HRIS, HRMS and HCM – these terms are often used interchangeably, but there are subtle differences.

HRIS is the basic element. It forms the foundation for digital HR management and bundles all important employee data in one place. HRIS and personnel information system (PIS) are essentially the same thing. Both terms refer to a software solution that supports companies in managing their employee data and HR processes.

HRMS (Human Resources Management System) goes one step further and includes additional functions that go beyond pure data management. These include, for example, modules for payroll accounting or performance management.

HCM (Human Capital Management) is the most comprehensive term. It describes a holistic strategy for the management of human resources.

It includes all processes and technologies that are used to optimize human capital. HCM therefore goes beyond a pure software solution and also includes strategic aspects such as HR development, talent management and organizational development.

Put simply: HRIS is the foundation, HRMS builds on it and HCM is the big picture.

The following infographic compares HRIS, HRMS and HCM and describes the most important features of each:

What are the reasons for using an HRIS?

Implementing an HRIS offers companies a variety of benefits that make HR work more efficient and transparent.

Reduction of bureaucracy

An HRIS automates numerous administrative tasks that traditionally require a lot of time and paper. This allows HR staff to be relieved of routine tasks and focus on strategic tasks such as personnel development or improving employee retention. The automation of processes such as payroll, time recording and onboarding reduces sources of error and ensures that all important information is always up-to-date and correct.

Predicting trends

With an HRIS, companies can analyze key performance indicators such as employee turnover, absenteeism and performance and identify trends. This information helps HR managers to make informed decisions and take proactive measures to avoid potential problems. For example, HR teams can recognize early on when turnover rates are rising in certain departments and develop targeted measures to retain employees.

Bias-free HR decisions

By using an HRIS, companies can ensure that HR decisions such as promotions are based on objective data and not personal preferences or biases. For example, an HRIS can transparently display performance data for all employees and thus support the selection of candidates for promotions based on their proven performance.

Tailored further training offers

An HRIS enables the creation of personalized further training plans that are tailored to the individual needs and career goals of employees. By analyzing performance data and skills gaps, the system can suggest suitable training measures to help employees develop their careers.

Workforce management

An HRIS can improve the integration of on-site and remote employees by providing a centralized platform for communication, task management and time tracking. This enables more efficient collaboration and ensures that all employees are integrated into company processes, regardless of where they work.

Self Service

An HRIS offers employees the opportunity to access their personal data, submit vacation requests, view pay slips and complete other HR-related tasks independently. This reduces the administrative workload for the HR department and increases employee satisfaction at the same time.

Advantages of a cloud-based HRIS

Cloud-based HRIS systems offer several decisive advantages compared to locally installed systems (on-premise). Probably the biggest advantage is flexibility and scalability. You can access your data at any time from anywhere with Internet access and, if necessary, adapt the system to the changing needs of your company. As your company grows, you can easily add new users and expand functions without having to invest in expensive hardware.

Another important advantage is the high level of security. Reputable providers of cloud HRIS solutions such as Papershift invest in state-of-the-art security technologies to protect your data from loss and unauthorized access.
Regular security updates and backups provide additional security and minimize the risk of data loss.

The simple implementation also speaks in favor of cloud-based HRIS systems. Instead of having to carry out complex installations on their own servers, companies can usually set up and use the software online within a very short time. Most providers also offer comprehensive training and support services to help you get started.

Cloud-based HRIS solutions are also generally more cost-effective than on-premise systems. You save on the purchase and maintenance of expensive server hardware and the cost of IT staff. Most providers offer flexible pricing models that are tailored to your individual needs.

An HRIS that impresses: you should expect these functions

A modern HRIS should offer a wide range of functions that cover the entire employee life cycle and simplify HR work. At the heart of this is a central database that stores all important employee information securely and clearly. Various modules build on this, which can be individually adapted and expanded as required.

Efficient personnel management

The administration of personnel data is at the heart of every HRIS. Here you should expect all important information such as name, address, contact details, salary information, working hours, vacation entitlements, qualifications and much more to be recorded and managed digitally

Easy to use

A good HRIS offers an intuitive user interface that makes it easy to enter and update data. The system should be easy to learn so that new employees can work productively with the system without a great deal of training.

Recruiting support

A good HRIS can be expected to significantly speed up and simplify the recruiting process. Job advertisements can be published on various platforms with just a few clicks, applicant data can be clearly managed and communication with candidates is centralized. AI-supported systems can even automatically analyze CVs and suggest suitable candidates.

Convincing onboarding

An HRIS should make it easy to integrate new employees into your company from day one. Digital forms and automated workflows simplify the onboarding process and reduce paperwork. Personalized onboarding plans ensure that new employees receive all important information and quickly find their way around their new working environment.
Training materials and programs can also be managed via HRIS.

Structured offboarding

When an employee leaves your company, it is important to organize their departure professionally. An HRIS supports you in handling the offboarding process in a structured and efficient manner.

Exit interviews can be conducted digitally, the return of company property can be monitored automatically and the final payslip is easily generated by the system.

All important documents and information on leaving are stored centrally in HRIS and can be accessed at any time. This makes the offboarding process transparent and smooth, and you can ensure that all important steps are followed.

Time management and payroll

A modern HRIS should offer functions for time recording, creating rosters and absence management. Employees can record working hours and leave requests digitally and supervisors can approve them easily. Some HRIS systems also integrate payroll and ensure that all employees are paid on time and correctly.

Talent management and employee development

An HRIS can support companies in recognizing and promoting the potential of their employees. Performance appraisals can be carried out digitally and development plans can be created. A good HRIS can also manage training opportunities and track employees’ learning progress.

Self-service for more personal responsibility

Employee self-service portals (ESS) are an important component of a modern HRIS. Employees can access their personal data here at any time, update it, submit vacation requests, view payslips and even schedule themselves into shifts. This encourages employees to take responsibility and at the same time relieves the HR department.

Data analysis for strategic decisions

An HRIS collects and analyzes a wealth of employee data that can be used for strategic decisions in HR management. For example, you can identify trends in employee turnover, analyze the effectiveness of recruiting channels or track the development of employee satisfaction over time.

Security and compliance

An HRIS should offer high security standards to protect sensitive employee data from unauthorized access.Compliance with data protection regulations is of central importance here. HRIS should also help companies follow all the relevant laws and regulations related to HR, such as the German Federal Data Protection Act and the General Data Protection Regulation (GDPR).

Flexibility and scalability

Last but not least, an HRIS should be flexibly adaptable to the individual needs of your company and be able to grow with your business. Cloud-based solutions offer particular advantages here, as they are easy to scale and can be accessed from anywhere.

HRIS: Employee opinions and experiences

In practice, employees appreciate the benefits that an HRIS can offer. However, satisfaction depends heavily on the quality of the HRIS system and its implementation. At the same time, there are concerns about systems that are not intuitive to use and require a great deal of training

Employees particularly appreciate the self-service functions of HRIS, which enable them to access their personal data at any time, update it, submit vacation requests and view pay slips.

On the other hand, some employees report negative experiences with HRIS systems, which they find complicated, unintuitive and not very user-friendly. This can lead to frustration and affect acceptance of the system.

In some cases, there was a lack of sufficient training and support for employees who have to work with the HRIS system. This can lead to employees being unsure of how to use the system and errors occurring.

People also worried about data protection because HRIS systems store sensitive employee data.

It is therefore important that companies use HRIS solutions like Papershift. These solutions must comply with applicable data protection standards. They should also be easy to use and learn.

HRIS: the perfect solution for every company?

An HRIS can be a valuable tool for many companies, but it is important to understand who it is really suitable for. Not every company will benefit equally from the functions of an HRIS.

HRIS systems are ideal for:

• Companies with complex HR processes: The more employees a company has and the more complicated the HR processes are, the more sense it makes to use an HRIS. The automation of tasks such as payroll accounting, time management or applicant management saves time and resources.
• Growth-oriented companies: An HRIS is flexible and scalable. If the company grows, the system can be easily adapted. This is particularly interesting for start-ups and fast-growing companies.
• Companies with a focus on data analysis: HRIS systems collect and analyze employee data that provides valuable insights into personnel development, employee satisfaction and fluctuation. Companies that want to use this data to make strategic decisions will benefit from an HRIS.

HRIS systems may be less suitable for:

• Very small companies: For companies with only a few employees, an HRIS may be too complex and expensive. Simple HR software or Excel spreadsheets are sometimes sufficient.
• Companies with very specific requirements: Some companies have very specific HR processes that are not covered by standard HRIS systems. In these cases, a customized software solution may make more sense.

Important in any case:

• A careful analysis of your own needs: Before purchasing an HRIS, companies should analyze their HR processes in detail and compare the system’s functions with their requirements.
• Choosing the right system: The market offers a wide range of HRIS solutions. It is important to choose a system that fits the size, industry and specific needs of the company.
• A planned and well thought-out implementation: The introduction of an HRIS system should be well planned and executed. Employees should be involved and trained at an early stage to ensure acceptance and smooth use.

Choosing the right HRIS: a guide for companies

Choosing the right HRIS is an important decision that requires careful consideration. After all, the software should simplify HR work in the company and not become an additional burden. Here is a guide to help companies make the right choice:

 

1. Inventory: Where do we currently stand?

Before you start looking for an HRIS, you should first analyze the current situation in your company. Which HR processes are already running digitally? Which software solutions are in use? Where is there potential for improvement? What challenges and problems exist in the HR area? This analysis helps to define your own needs and requirements for an HRIS.

2. Define goals: What do we want to achieve?

In the next step, companies should clearly define their goals. What should the HRIS achieve? Should it increase efficiency, improve data quality, increase employee satisfaction or support strategic HR planning? The objectives help with the selection of the relevant HRIS functions and modules.

3. Define requirements: Which functions do we need?

Which HR tasks should be covered by the HRIS? Do we need a system for recruiting, personnel administration, time management, payroll accounting, talent management or everything together? We should also think about what we will need in the future.
Are there additional software modules that can be integrated later?

4. Determine the budget: How much can we invest?

The cost of an HRIS can vary greatly depending on the provider and the range of functions. Companies should set themselves a budget in advance and weigh up the costs against the expected benefits.

5. Explore the market: What systems are available?

The market offers a wide range of HRIS solutions. Companies should get an overview of the various providers and systems and compare them based on their requirements and budget. Online comparison portals, trade fairs and testimonials from other companies can help with orientation.

6. Obtain references: What do other users say?

Before deciding on an HRIS, you should ask for references from other companies that are already using the system. Their experiences and feedback can provide valuable information.

7. Test and compare systems

Most providers offer free trial versions or demos of their HRIS systems. Companies should use this opportunity to test the systems in practice and get an idea of the user-friendliness, range of functions and integration options.

8. Check data protection and security

HRIS systems store sensitive employee data. Companies should ensure this,
that the selected system complies with data protection regulations and has appropriate security measures in place.

9. Ensure support and maintenance

Even after the HRIS has been implemented, it is important to ensure reliable support and regular maintenance of the system. This allows problems to be resolved quickly and the system to be kept up to date.

10. Plan implementation: What happens next?

The implementation of an HRIS should be well planned. It is important to create a timetable, involve and train employees at an early stage and carefully prepare the data migration from existing systems.

Typical HRIS mistakes and how to avoid them

Using an HRIS has its benefits, but there are also some disadvantages.. Here are typical mistakes and how to avoid them.

Unclear goals and requirements

Sometimes companies rush into implementation too quickly without first defining clear objectives. What should the HRIS achieve? Which processes should be improved? Without this clarity, the selection of the system becomes difficult and there is a risk that you end up with software that does not optimally meet your needs.

Solution: Before selecting a system, companies should carry out a thorough needs analysis and clearly define their objectives.

Lack of employee involvement

An HRIS affects all employees in the company. If they are not involved in the selection and implementation process at an early stage, this can lead to resistance and acceptance problems. After all, employees are supposed to use the system later and benefit from it.

Solution: Involve employees from the outset, take their needs and wishes into account and prepare them for the new system through training.

Poor data quality

An HRIS is only as good as the data it processes. If the data is incomplete, incorrect or inconsistent, the quality of the evaluations and reports suffers. This can lead to incorrect decisions and inefficiency.

Solution: Check and clean up data quality before implementation. Define standards for data entry and maintenance and train employees accordingly.

Lack of integration into the IT landscape and other systems

An HRIS should be able to be seamlessly integrated into the company’s existing IT landscape. If this is not the case, data silos and media disruptions arise, which reduce efficiency.

It’s not a good idea to create separate solutions for different HR tasks. For example, it’s not a good idea to use separate systems for time recording, duty rostering, and absence management. Ideally, all tasks should be integrated into one system.

Solution: At the very least, ensure that the HRIS is compatible with other important systems such as ERP, payroll accounting or time recording and offers interfaces for data exchange. Ideally, use software such as Papershift, which integrates various functions.

Insufficient planning of the implementation

Implementing an HRIS is a complex project that needs to be carefully planned. A lack of planning and resources can lead to delays, cost overruns and frustration.

Solution: Create a detailed implementation plan, allocate sufficient time and resources and bring in experienced experts to assist with the implementation.

Neglecting support and maintenance

An HRIS is software that needs to be regularly maintained and updated. A lack of support and maintenance can lead to security gaps, malfunctions and data loss.

Solution: Sign a reliable support contract with the provider and ensure that regular updates and security checks are carried out. Train employees in how to use the system and provide them with contact persons for questions and problems.

Outlook and the future of HRIS: more than just data management

The future of HRIS is promising and will be characterized by trends such as artificial intelligence (AI), automation and, against the backdrop of New Work, a clear focus on the employee experience. HRIS systems will evolve from pure data management systems to intelligent platforms that support HR professionals in making strategic decisions and improving the employee experience.

AI will play an increasingly important role in HRIS. It will automate routine tasks, such as pre-screening applicants or responding to employee queries. Personalized learning paths will promote professional development. Increasingly powerful analytics will enable HR professionals to analyze data in real time, identify trends and make informed decisions.