HR Management & Compliance

HRIS 101: Selecting the Right System for Your Organization

Selecting an HRIS can be a daunting task, says consultant Amy Letke, SPHR, GPHR, but careful preplanning, including developing a clear picture of your needs, can make it go relatively smoothly.

Letke, who is the founder and CEO of the HR consulting and HR outsourcing company HR Integrity, Inc., offered her tips at a recent webinar sponsored by BLR® and HRHero®.

What is an HRIS?

A Human Resources Information System is an integrated system for providing information used by HR management in decision making. It tracks information about all of an organization’s employees, usually in a database or a series of interrelated databases.

Importance of an HRIS

People are the largest part of most organizations’ operating costs, says Letke. However, they are also among the most difficult resources to manage. One big challenge is collecting, managing, and reporting data about people. A good HRIS will make this a simple process, Letke says.

Information Stored in an HRIS

What Letke typically sees stored in an HRIS:

  • Employee name, gender, address, SSN
  • Department
  • Job title
  • Grade
  • Salary
  • Salary history
  • Position history
  • Supervisor and perhaps a few levels up
  • Training completed
  • Special qualifications, licensing, certification
  • Ethnicity for the EEOC and understanding makeup of employee populace
  • Date of birth
  • Disabilities
  • EEO and veterans status
  • Visa status
  • Applicant tracking, interviewing, and selection
  • FMLA and leave tracking
  • Benefits selected
  • Performance data
  • Disciplinary action received
  • High potential employee
  • Succession plan status
  • Attendance and PTO use

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Capabilities of High Performing HRIS

  • Management of all employee data as well as information.
  • Means for reporting and analysis of employee information—including calculation of data and customized reporting (standard reports from a menu or custom reporting).
  • Hosting of company-related documents such as employee handbooks, procedures, and safety guidelines.
  • Benefits administration, including enrollment, status changes, and personal information updating (for example, open enrollment, new child).
  • Complete integration with payroll and other company financial software and accounting systems, ERP, Intranets, Extranets, and other solutions. (During planning, it’s critical to check with other departments.)
  • Recruitment components, including applicant and résumé data management.
  • Reporting, including EEO and custom reports.

Why Use an HRIS?

An HRIS is more efficient at many tasks, thereby freeing up HR staff for more strategic functions, says Letke. For example:

  • Employees may update personal data and address changes, etc. without involving HR staff.
  • Data are stored in one place, producing time-efficient reporting for compliance, employee development, and strategic objectives.
  • Executive and management reporting capabilities are “on the fly” for employment data by department, location, or any number of other variables.
  • Managers can access the information quickly and easily for employee development, performance improvement, and wage detail.

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Getting Ready—What You Should Do …

  • Improve your HRIS software knowledge. Start investing your time in seminars and looking at systems. Consider calling your peers. What works or doesn’t for their organizations?
  • Determine your needs. Evaluate the needs of your business. What do you need/want? What does management want to track? What sort of metrics and reporting capabilities are desired?
  • Create a checklist. You’ll need a detailed HRIS software needs and requirements checklist or spreadsheet.
  • Clarify your budget. Know how much can you spend.
  • Determine involvement. Know who needs to be involved for evaluation and for approval.
  • Have a resource for help. Third party consultants can be used to help with the selection process. They can help you with the specifications and assist you in asking the right questions.
  • Consider a request for proposal (RFP) process. It may be appropriate for your situation.
  • Evaluate a handful. Pick a handful of HRIS software systems to evaluate (a handful only).
  • Demo the selected systems. Compare the HRIS to your requirements spreadsheet. Be ready to spend some significant time on evaluation, warns Letke.
  • Research the short list. Get references and talk with them about their experiences.
  • Determine the implementation scope. Carefully define who does what.
  • Make the decision.

In tomorrow’s Advisor, Letke’s HRIS vendor Evaluation checklist, plus an introduction to a unique guide for small—or even one-person—HR department.