HRIS System: Definition, Key Benefits, and Buyer's Guide

HR managers are burned out. The pandemic has brought numerous new and constantly changing tasks to the HR department. This includes the feeling of having to be constantly available and recruiting in a constantly changing labor market. In addition to this complexity and stress, 73% of HR professionals report not having the necessary resources to do their job well.

Fortunately, there are Human Resource Information Systems (HRIS) that provide relief. An HRIS helps companies capture, organize, and analyze important data about their employees across all key HR functions, including:

Recruitment and onboarding
Payroll, personnel administration, and leave management
Performance management
Training and development
Employee retention

An HRIS is not just for the HR department. Finance, accounting, and operations teams also benefit from the real-time data and reporting features of an HRIS.

In this article, you will learn everything important about HRIS:

What an HRIS can do
Which companies need it
How to choose the right system
How to use it to make more informed decisions about your most valuable asset – your employees

If you are looking for a user-friendly HRIS, IceHrm is the right choice. It supports you through all processes from onboarding to offboarding your employees with powerful automation, intuitive tools, and comprehensive reporting features.

What does HRIS stand for? HRIS stands for Human Resources Information System or Human Resource Information Software – both are common terms. HR departments use an HRIS to manage, store, organize, and track employee and organizational information. This allows them to rely less on paper records, work more efficiently, and make data-driven decisions.

HRIS Meaning: What is an HRIS and why is it useful for the entire company?

An HRIS is a personnel database that helps your company capture, organize, and manage important employee data, including:

Name and contact details
Demographic data (e.g., date of birth, gender, and employee number)
Job information such as supervisor, department, and employment status (e.g., full-time, part-time, freelance, etc.)
Selected benefits and compensation
Leave balances and requests

The strength of HRIS systems lies in the fact that they provide a central source of accurate data about all employees in the company. The functions of HRIS systems are diverse, but the most common include:

Employee database and directory
Payroll and benefits management
Recruiting and hiring
Onboarding of new employees
Time tracking and leave management
Employee self-service

Not all HRIS systems are the same. Depending on a company's needs, data complexity, and growth goals, there is a wide range of HRIS solutions.

More advanced HRIS systems offer more than just simple data collection and reporting functions; they help HR teams understand the employee experience and shape it strategically.

IceHrm, for example, provides actionable analytics that help companies identify key trends, make data-driven decisions, and develop employee-focused strategies. IceHrm also offers features that reduce manual processes and ensure smooth use for both employees and HR teams, including:

Applicant Tracking System (ATS): Find and hire the right candidate for your position – with all resumes in one place, automatic ranking, and keyword search.
Self-paced onboarding for new employees: Give new employees onboarding tasks they can complete at their own pace – for an optimal start.
Electronic signatures: Make it easier for your employees to fill out forms and for your HR team to digitally track and store completed documents.
Performance management: Collect feedback from and about your team members to support them in their roles and advance their careers.

HRIS, HRIS system, HRIS software, and HRM software: What is the difference?

There are many terms for HRIS – including HRIS system, HRIS software, and HRM software – but essentially, they are synonymous.

7 key benefits of an HRIS

1. Your payroll becomes more accurate.

Since all employee data is stored centrally, an HRIS with an integrated payroll function can improve accuracy and compliance, save time, and reduce the risk of errors. Integrated payroll is beneficial for companies of all sizes, but especially important for larger companies with complex payroll processes and regulatory requirements.

2. Your data is available at any time.

With an HRIS, you never have to sift through filing cabinets and spreadsheets again, and you can save yourself from manually entering data into different systems. All employee data is stored in a central database, allowing you to capture, track, update, and search all the information you need in seconds.

3. You don't have to worry about compliance with legal regulations.

A good HRIS provider is always aware of applicable regulations, such as the General Data Protection Regulation (GDPR), that affect HR departments. This helps companies meet compliance requirements easily and securely.

4. You save a lot of time.

Even manual, time-consuming HR tasks can be completed quickly and easily with an HRIS. For example, employees take an average of three unplanned vacation days per year. This may not seem like much at first, but with an average hourly wage of $22.12, three unplanned vacation days quickly add up to $530.88 per employee per year.

An HRIS makes it much easier for employees to follow the vacation request process: thanks to employee self-service, employees can view their vacation entitlement and no longer need to hand paper forms to their supervisors. The HRIS forwards the request, and the supervisor reviews and approves the vacation in the system.

5. You gain freedom for strategic action.

With fewer manual operational tasks, you can invest your valuable skills and time in strategic HR initiatives that provide real value to the company. This includes improving employee retention, increasing team productivity, and shaping your company culture.

6. Your employees benefit from a better work experience.

Whether it’s an effective and pleasant onboarding process, a solid performance review cycle with documented feedback, or the easy application for leave – smooth interaction with your HR information system (HRIS) can enhance your employees’ overall work experience.

7. Your reporting becomes more effective.

When reporting on HR performance to your leadership team, an HRIS can help you gather data that aligns your actions with company goals. Providing accurate and timely data from across your entire organization—including key metrics such as employee engagement and retention—can help leaders better support HR initiatives and make more informed strategic decisions.

How to Choose the Right HRIS

Choosing the right HRIS can be a challenge. There are countless options, each with its own features and benefits.

To ensure that an HRIS meets your company's needs today and in the future, we recommend focusing on three core areas: your company's growth strategy, the integration of the HRIS into your existing IT infrastructure, and making optimal use of the system.

1. Consider your future growth.

The number of your employees is one of the most important factors when choosing an HRIS system. Different HRIS systems are designed for different company sizes. Therefore, choose a system that meets your current needs and future growth.

Small businesses: For managing employee data, leave requests, and basic payroll functions, you may only need a simple HRIS. These systems are usually cost-effective and user-friendly, whether or not you have a formal HR department.
Larger organizations: With hundreds or thousands of employees, you need an HRIS that covers more complex HR functions such as benefits management, compliance, and performance management. Although these more complex systems require higher investment, they offer flexibility and customization options that can be tailored to the specific needs of your growing organization.
Future growth: If you expect a significant increase in personnel in the near future, it may be worth investing in a more powerful HRIS now to ensure that your system does not have to keep up with demands too quickly.
International workforce: Another important aspect is your HRIS's ability to manage employees in different countries. If you are planning international expansion, you will need an HRIS that supports multiple languages, currencies, and compliance requirements. Look for systems with experience working with global companies that can provide you with the necessary support and expertise to manage your international workforce.

2. Understand how your HRIS can integrate into your existing IT infrastructure.

When selecting an HRIS, it is important to understand which other business applications need to send data to the system or receive data from it.

Here are some questions to help you prepare:

Which existing applications will be replaced by your HRIS?
Which other teams will access data from the HRIS?
What does the technical integration process look like?
What integration support will you receive from the vendor?

Integrations can vary greatly depending on the HRIS and the specific needs of your company. Some providers offer pre-configured integrations with common HR systems such as payroll software or personnel management platforms. Others may require custom integrations, which can be more time-consuming and costly.

Look for providers with dedicated support teams and a clear, step-by-step integration process.

3. Start creating rollout plans to increase adoption.

Choosing an HRIS is an important and often costly decision. However, the benefits and ROI of the new system far outweigh the initial challenges of setup and onboarding.

Here are some suggestions on how to make the most of your new system:

Create a plan for migrating all your data, taking into account the needs of the different teams in your organization.
Define, communicate, and implement new processes. Don’t forget to share the plan with your employees and leadership team and report on progress regularly!
Design an onboarding plan including training sessions to help your team get started with the HRIS system and understand its related functions and expectations.
Rely on your HRIS provider. They are your partner and should have a thorough understanding of the challenges in human resources and support you in achieving your goals.

Which HRM software is the best?

IceHrm is widely regarded as the best HRM software on the market. The intuitive, cloud-based platform simplifies HR processes such as employee data management and reporting, leave requests, payroll and performance management, as well as hiring and onboarding.

Next Steps: Find the Right HRIS for Your Company

Choosing an HRIS should be well thought out. The right system can solve your company's biggest challenges and give your HR team the freedom to make a crucial strategic contribution.

If you have questions during your HRIS research, for example, whether an HRIS is the best solution for your company, we are happy to help. Talk to our expert team and schedule a IceHrm demo today!