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A human resources information system [HRIS] is a software solution that maintains, manages, and processes detailed employee information and human resources-related policies and procedures. As an interactive system of information management, the HRIS standardizes human resources [HR] tasks and processes while facilitating accurate record keeping and reporting.
Essentially, an HRIS is a “two-way street” in which information about employees is delivered into the organization and, conversely, back out to employees. By eliminating paper-based and manual HR-related processes, an HRIS offers more seamless, streamlined, and efficient interactions between employees and the companies they work for while freeing HR professionals to perform more strategic and high-value work.
HRIS vs HRMS vs HCM - What are the differences?
The terms HRIS, human resources management system [HRMS], and human capital management [HCM] are often used interchangeably. However, there can be subtle differences between the three, depending on which features a company chooses to enable.
HRIS
Originally referred to a basic system of keeping administrative employee records. As HR functions became more complex, HRIS incorporates processes such as talent acquisition, recruitment, and ongoing employee data management and processing.
HRMS
Came into use as organizations began to use increasingly sophisticated software and automated tasks to perform their HR functions—though it is still used interchangeably with HRIS. Today’s HRIS may include payroll management and time and labor.
HCM
Refers to a broader or umbrella solution that covers every aspect of the HR function and workforce management. Additional functionality includes advanced talent management tasks such as performance management, succession planning, compensation planning, strategic workforce planning, and every other HR planning activity. HCM covers the range of HR functions whether they are data-based, transactional, or strategic.
What is an HRIS System? The Two Pillars
An HRIS is built on two pillars that create the foundation for managing people and policies to support overall organizational effectiveness.
Organizational design
From a structural perspective, HRIS includes roles, functions, and reporting hierarchies. By defining the organizational structure, HRIS provides recognizable accountability and a pathway for operational functionality and consistency.
The right HRIS helps you address business challenges by helping you put the right talent in place. Through the consistent, automated management of acquisition and recruiting data, your HRIS can help you build a workforce that has the right people with the right skills, working in the right functions and under the right structure, to meet your strategic goals.
Learn more about Strategic Workforce Planning [PDF]
Employee data management
Similar to customer relationship management but within an employer/employee setting, the HRIS provides a comprehensive view of every employee including name, address, date of hire, compensation, benefit selections, and much more. With the right data, you’ll be better able to connect with your employees, help them develop career plans, find the right training, and take their performance to the next level.
The HRIS enables automated and standardized record keeping, reporting, and self-service functionality. This can lead to more accurate and up-to-date information management that drives greater efficiency while providing convenience and ease of use for employees.
Learn more about Talent Management
HRIS Features, Functions, and Users
A typical HRIS will include basic features that assist with recruiting and talent acquisition, compensation, organizational management, and absence management [such as vacation, sick leave, and personal time off]. Additional features can be layered on to meet business needs.
By automating HR-related tasks and providing self-service access to procedures and policies, the system creates standardization and consistency across the organization while increasing HR operational efficiency and providing a better employee experience.
Although everyone within the company is an HRIS user simply by being an employee, the power users of the HRIS are HR administrators, payroll specialists, talent management specialists, and recruiters. A significant portion of these employees’ jobs involves interacting with the HRIS on a regular basis.
The Challenges of Human Resources Systems
Every business is unique and has its own set of challenges. Your HRIS should address those concerns. Here are some of the most common HRIS challenges.
- Data privacy and security. One of the biggest concerns with managing an HRIS is ensuring employee data privacy and security. These systems contain voluminous amounts of sensitive and confidential data that must be protected. A key HRIS challenge organizations face is how to implement a solution that is sophisticated enough that every user who accesses the system can get exactly the information they need to perform a task without accessing information they do not have permission to see.
- Regulations and compliance. HRIS data access rules must also align with regulatory statutes. Every organization must ensure
that its HRIS remains compliant with ever-changing regulations. This is particularly challenging to companies that have a global presence. Usefulness and functionality depend on every user being able to quickly and easily perform transactions through the system without breaching confidentiality or violating the law.
Learn more about an all-in-one HR system you can deploy globally
- Business
disruption. Ongoing changes to HRIS features can present challenges as well. In an era of continuous disruptive innovation, organizations sometimes struggle to keep up with HRIS upgrades and refinements. Similarly, selecting the right HRIS for your business can be complicated. With so many options and features available, it’s important that you choose a system that best aligns with your business goals and not be distracted by components that may not prove to be useful.
Learn more about an all-in-one HR system you can deploy globally [PDF]
What are the Benefits of Moving a HRIS to the Cloud?
Deploying an HRIS in the cloud has numerous benefits over an on-premise HRIS, including the following:
- Easy scalability. In the cloud, you can easily scale up or down as business needs change. You also gain greater financial flexibility and can better manage costs as you enhance or reduce your operations.
- Greater control over operational versus capital expenditures. In the cloud, you pay only for what you use, and you don’t have to invest in expensive infrastructure. Your expenses are operational rather than capital.
- Quick and easy access to innovation. Because development and deployment happen very quickly in the cloud, you have access to upgrades and innovations much sooner.
Ten reasons for migrating your HRIS to the cloud
On-premise HRIS solutions simply cannot match the capabilities of the cloud. Here are ten reasons for making the move to the cloud.
- 1. Simple, intuitive, customized-to-need user experiences
- 2. Flexible architecture that adapts to changing circumstances
- 3. Intelligent applications that boost insights and operational efficiency, built with an AI-first approach
- 4. Easy upgrades that provide better business value
- 5. Ongoing innovation through emerging technologies
- 6. Best-in-class multilayered data security and privacy features
- 7. Best practice sharing through an engaged and vibrant HR community
- 8. Expert partnership in every step of your cloud journey
- 9. Design that supports a global reach
- 10. Complete HR coverage from one solution partner
Key Considerations on Choosing the Best HRIS
To meet your company’s specific needs, you should customize your HRIS solution. However, there are two main areas of functionality that every company should ensure are available from the HRIS solution provider they choose.
- 1. The solution should be capable of covering all facets of HR management. This includes recruiting, onboarding, learning, succession planning, and HR help desk. You’ll need access to a complete, end-to-end solution that covers all of your needs, as those needs change. What is right for you today may not be enough for you tomorrow.
- 2. The solution should be part of a broader enterprise solution that connects HR with finance. Labor is one of the highest cost factors in any organization. Any decision that pertains to people has a financial implication. It’s essential that your company have complete visibility into both its people and its finances—and the relationship between the two. The best HRIS is one that is closely connected to the finance function. Ideally, that system will be on the same platform and use the same technology as the company’s finances.
The Future of HRIS
As automated technologies advance, the workplace is changing dramatically. Increasingly, humans are working alongside technology in ever more sophisticated ways. While this creates many business advantages, one of the risks it poses is the dehumanization of the workplace. Ironically, in the HR arena, technology advancement is creating the opportunity to transform the HRIS from an impersonal people-data management system to a system that creates a more human experience in the workplace.
The HRIS of the future will be more helpful and intuitive, making it easier for employees to achieve their objectives more easily, faster, and with better results. These systems will use AI and machine learning [ML] to “sense” what employees are trying to accomplish and proactively offer solutions―from making an address change to enrolling in the best training option. From the back-end operational perspective, HRIS innovations will become more manageable. Installation of upgrades and new releases will be easier and tailored to customer needs.
Organizations that embrace new and emerging technologies in their HRIS will be part of the move to transform the workplace into an environment where technology and humans work together to create better outcomes for all. The HR function is at the heart of this transformation. Let us help you move your HRIS to the cloud so your workplace can become more human while you achieve higher levels of technology-driven performance.
A complete HR solution
Look for a solution that provides a complete view across your entire HR system, including the linkage between finance and HCM. Oracle built its HCM and ERP solutions on the same Oracle Cloud Platform, making Oracle Cloud HCM the only HCM solution that provides such capability.