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Understanding HRIS: Benefits & Functions

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Human resource management (HRM) is about managing people in a corporate environment. You've probably heard of human resources, but you may be wondering what an HRIS is? The term HRIS stands for Human Resources Information System and refers to the use of information technology to build an HR system that allows greater control over processes and greater organizational efficiency.

By using an HRIS system, companies can automate various processes such as: E.g. hiring, onboarding, performance management and payroll. By accessing digital employee data, HR managers can make more effective and timely decisions. Over time, the influence of HRIS in human resources has led to the business of employees being driven by data rather than emotions. As a result, companies can make company-wide updates or even address geographic challenges through specific steps with local context.

HRIS is an umbrella term that refers to the hardware, software, people, forms, policies, procedures, and data that provide efficiency to the system. If you are responsible for managing the flow of information or have a role in influencing HR policy in your company and are keen to understand how HRIS works, then this blog post is for you.

Main goals of HRIS systems

Technology has transformed almost every industry - from the breakfast we wake up to to the last meal we order at night and the commute in between. HR is no different. Layers of technology have blended with proven HR principles to make our industry “smarter” – in the sense that it listens, learns, adapts and influences decision-making based on data. However, there are some key areas where HR information systems add value to businesses, as listed below:

HR automation

It helps HR teams automate frequently repetitive tasks such as:  onboarding employees, setting up new email and bank accounts, and makes vacation management more efficient.

Information Sharing

HRIS helps HR professionals collect data and track trends within the organization more easily and conveniently.

Mission oriented

One of the most important tasks of HR managers is to ensure that talent is aligned with the company's purpose. When teams work in silos, it can have a negative impact on the entire company culture. HRIS provides access to information and the feedback necessary to overcome these challenges and refocus the organization on its original purpose. This is particularly important in mergers or acquisitions where two companies with different cultures need to sit down at the table and work together.

Six components of HRIS

Overall, there are six key components in typical HRIS systems:

1.HRIS database

This is where HR teams store important employee information such as payroll, emergency contact information, and performance reviews. It serves as a digital backup of the information that ultimately drives the company.

2.Time and work management with HRIS

HRIS systems simplify time and workforce management. It offers employees the opportunity to record their working hours themselves. In addition, their superiors can easily review and approve vacation requests. All this with a transparency that ensures that payroll is carried out correctly without delays.

3.HRIS payroll function

Payroll is undoubtedly the most important function for HR managers. Not receiving the reassuring SMS notification that your salary has been credited is very annoying for most of us. This includes tracking and processing attendance, issuing checks, reconciling salaries to bank accounts - all while complying with tax regulations. HRIS systems increase efficiency in all of these areas.

4.Administration of social benefits

HRIS systems also enable employers to manage medical benefits and retirement investments more effectively. In addition to salary, employees often receive benefits to save higher taxable income. Employees pay a lot of attention to social benefits, so it is necessary to manage them efficiently. Managing benefits via HRIS systems provides HR managers with a central point of contact to avoid friction among employees.

5.Employee self-service in HRIS

Modern HR systems offer employees the opportunity to check and ensure the accuracy of their personal data. As a result, HRIS systems significantly increase the efficiency of the system while providing greater transparency regarding compensation, leave usage, facilities and benefits.

6.Recruiting and Retaining Employees Using HRIS

Recruitment and retention are two sides of the HR coin. HR's job is to find great talent, hire them, retain them on day one and week one, mentor them further, and ultimately retain them. HRIS systems help streamline systems and processes to ensure these operations are more data-driven.

Functions of a human resources information system

It is now clear that implementing a human resources information system can accelerate your HRM efforts. At this point we want to take a closer look at the role of HRIS in HRM. It influences almost every aspect of HR work, such as: the integration of business processes, better control or the provision of tools for forecasting and planning.

Overall, HRIS tools make workforce planning, budgeting, and even posting job openings easier. As candidate applications come in, the HRIS process allows these applications to be scanned and stored. Reports on employee training, planned learning sessions, performance reviews, compensation, benefits, competencies and development plans are also stored for planning future programs.

With a data-driven approach, employees see that their employers are taking their growth concerns seriously, they feel a sense of belonging, and see value in their professional development. Gartner's 2024 HR Focus Areas report also showed that in a survey of 800 HR leaders, 44 percent believe their companies cannot offer compelling career paths to their employees. These features also allow managers to review work performance and track their teams' resource usage.

You can divide the activities of the HRIS system into the following three categories:

These are everyday transactions related to record keeping, such as: Payroll and employee status changes.

Traditional activities

These always involve strategic HR activities such as planning, recruiting, selection, training, compensation and performance management.

These are activities that HR managers perform when they have time for repetitive tasks. These activities include cultural or organizational change, structural realignment, strategic realignment and innovation.

It is estimated that HR managers spend between 65 and 75 percent of their time on transactional activities. The remaining quarter of their time (between 15 and 30 percent) is spent on traditional activities. Finally, if they have time or energy left, they spend between 5 and 15 percent of their time on transformational activities. An HRIS system frees up a lot of time and energy to have a lasting, positive impact on the company.

Difference between HRIS and HRM

The rise of HRIS has also given rise to the world of electronic human resources management (eHRM). Some HR managers believe that in the future, employees will increasingly communicate with an HR portal instead of a human. Time will tell whether this approach is utopian or dystopian. But for now, it's probably a safe assumption that HR managers with more time on their hands can build happier teams.

The role of eHRM is to support human resources by changing information flows, communication processes and social interaction patterns through the efficient use of technology. It enables the implementation and delivery of HR functions through an HRIS system that connects employees, applicants and managers and communicates decisions more transparently. While eHRM focuses on delivering HR functions, HRIS is the underlying technology that supports it.

A typical HRIS can include multiple technologies, such as: databases, small functional systems (specific HR applications) or a large integrated Enterprise Resource Planning (ERP). Today, HRIS can even include smartphones for remote access to data and social networking tools to connect distributed workforces.

Advantages of HRIS

An HRIS system offers the following advantages for human resources work:

Comprehensive information

It provides a centralized, integrated database that facilitates structural connectivity and faster information transactions across all units and activities.

Improved HR operations

Improving HR management processes increases competitiveness and enables faster and higher quality decisions.

Streamlined efficiency

The administrative functions of HR are streamlined and made more efficient, leaving more time for strategic HR management rather than transaction processing.

Increased employee satisfaction

Fast and accurate service delivery through a human resources information system improves employee satisfaction.

In addition, it leads to significant cost and time savings, e.g. by reducing salary planning cycles, headcount, recruiting time, hiring costs and training costs.

However, it is important to note that technology alone is not a guarantee of improved HR outcomes. The success of an HRIS implementation depends on factors such as the size of the company, top management support, available resources, HR philosophy, company vision, organizational culture, structure, systems, leadership competency and willingness Employees for change.

Although there are risks associated with adoption, these can be managed through awareness and risk mitigation strategies. There is also a potential downside to the coin, which is that the instrument becomes increasingly important due to over-reliance on the technology. Added to this are concerns about privacy, system rigidity, employee resistance to electronic performance monitoring, and reduced performance on complex tasks due to performance monitoring systems.

By understanding the benefits and risks, companies can harness the power of HRIS to transform their HR practices and achieve greater efficiency, effectiveness and employee satisfaction.

Traditional vs. modern HRIS

More than a decade ago, it was common for HR departments to keep a room full of paper-based employee files. These were kept for several years because this was required by law. These records included employee information, salary data, benefits, training, attendance and performance data. However, this traditional approach was not sustainable.

The modern conception of HRIS is now heavily focused on the art of human resources management. A company's ability to attract, develop and retain top talent is more important than its use of technology and ultimately influences the company's success. To gain a competitive advantage, companies need fast and accurate information about current and potential employees. This is exactly where modern HRIS comes into play.

With the advancements in computer technology, companies are now realizing the need for HRIS. With the introduction of computer-based systems such as Such as Human Resource Information Systems (HRIS), companies can maintain accurate and up-to-date records. This way they can better prepare for future growth. Thanks to the reduction in manual tasks and paperwork, as well as the creation of a centralized platform for all HR information, companies are now discovering the importance of HRIS systems.

So how does an HR information system help the company?

A modern HRIS is designed to control and optimize employees' movements throughout their career within the company. It helps streamline HR processes and reduces reliance on paper forms and reports. By using HRIS, HR managers can access comprehensive data, track employee progress, manage benefits, facilitate training and support strategic decisions.

The shift from traditional to modern HRIS has changed the way companies manage their human resources. With the help of technology, HR managers can use HRIS to improve the efficiency, accuracy and effectiveness of their daily work. By leveraging these advances, young HR professionals can improve their work and contribute to the overall success of their companies.

Implementing HRIS like IceHrm revolutionizes HR practices, driving efficiency and informed decision-making. Upgrade your HR management today.

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