The Key Benefits Of HRIS Software (2023)

The more employee data a company captures, manages, and analyzes for its entire workforce, the more it stands to reap the benefits of human resources information system (HRIS) software.

An HRIS serves as a centralized repository for employee data, such as name, address, and salary, as well as organizational data, such as policies and a directory. An HRIS also serves as a foundation to layer on more advanced human resources management system (HRMS) and human capital management (HCM) capabilities, such as recruiting and performance management.

An HRIS is more than a mere database. HRIS software comes with several benefits to help streamline HR functions and free up time for HR teams and employees to do more value-added tasks.

Also read: The 5 Main Types of Human Resources Information Systems

8 essential HRIS benefits

What can your HR team achieve by implementing an HRIS?

1. Real-time information access

Unlike paper files, spreadsheets, and on-premises software, an HRIS as a cloud-based database means one source of truth for all authorized users, primarily employees and HR. An HRIS helps with version control for documents that HR updates routinely because it syncs changes in real time. That way, HR team members accessing the same document don’t have to worry about whether they’re viewing or updating its most recent version.

2. Reduced manual effort

An HRIS can automate HR tasks that staff would otherwise have to perform manually. Automating an onboarding workflow, for example, saves both HR staff and new employees time. HR staff can then focus on more mentally-demanding, value-generating projects—like rolling out a new learning management system (LMS) or setting up a mentorship program—rather than getting bogged down with manual data entry or reconciliation. And employees can focus on the tasks more immediately relative to their role instead of asking HR how to get their benefits set up.

Automated approvals keep projects moving forward, so stakeholders don’t have to wait for someone else to complete their task and check off a box manually. For example, when processing an employee reimbursement, the employee can simply upload documentation, and the software can take it from there to sync up with accounting and payroll. If there’s an issue, it can alert someone in either of those departments.

Need an HRIS that earns high marks on automation? We suggest checking out BambooHR.

3. Increased efficiency

An HRIS enables companies to streamline HR data and processes in one place instead of investing in individual tools stitched together via an application programming interface (API). HR software vendors usually allow companies to bundle tools for cost savings.

Once a company builds and analyzes historical data in an HRIS, reports reveal opportunities for cost savings without sacrificing function or employee experience. For instance, a company can utilize HRIS reporting to track the cost of benefits and potentially renegotiate pricing with carriers.

The upshot of centralized real-time data, automation, and streamlined processes is cost savings for the company.

4. Pattern and insight discovery

An HRIS without added HRMS and HCM modules doesn’t deliver the highest level of analytics possible, but since it contains a lot of employee and organizational data, it can deliver basic reports that are nevertheless useful.

For example, HR can view benefits enrollment data to determine which benefits to expand and which to scale back. An HRIS like Rippling can also pull payroll data to generate a comprehensive compensation report the user can filter by department or role.

As a company adds on HRMS and HCM tools, the reporting becomes even more complex, even predictive, and the data contained within the HRIS powers those analytics. The more modules that get added, the more data HR teams and company leaders can leverage to proactively make well-informed decisions about its workforce.

5. Higher employee satisfaction

Having the right HRIS in place makes HR and employees’ jobs easier by helping new employees get started with less guidance and by allowing employees to update their own information when necessary.

An HRIS like the one at the heart of ADP Workforce Now, for example, automates onboarding workflows. This not only saves HR staff time, but it also puts employees in control of onboarding tasks to complete, such as e-signatures for documents. A clear workflow also makes a good first impression on new hires because they understand what they need to do and when.

The HRIS continues to serve as an important touchstone for new and tenured employees alike to return to as they manage their own data throughout the employee life cycle, such as benefits, time off, or tax documents.

6. Better compliance

Storing and managing data in an HRIS helps a business stay compliant with industry and government regulations because there’s an electronic paper trail to refer to if the need arises. Plus, some HRIS solutions have built-in, automated compliance features.

Regardless of the industry, a business manages sensitive employee and organizational information. Storing it in an HRIS means less chance of data getting lost or stolen, since an HRIS administrator can configure access controls. Moreover, in the event of an audit or a legal investigation, the HRIS contains all of the necessary data a company must legally store and maintain for a certain period of time.

Businesses must also adhere to local, state, and federal regulations, such as FMLA for paid time off, ACA for benefits management, or minimum wage requirements in payroll. Some solutions’ foundational HRIS modules are capable of automated compliance to ensure compliant payroll and benefits administration.

Need a solution that helps with automated compliance? We recommend Gusto or Zenefits.

7. Access to improved features

When using paper-based or on-premises systems for storing and updating employee information, companies miss out not only on the benefits already mentioned but also the advanced features HRIS vendors release in their cloud-based solutions.

With an HRIS comes customer support and routine updates to improve system performance. Some new features may even be added. Rippling, for example, is adding scheduled report runs to its core HRIS platform.

8. Scalability

An HRMS or HCM system can’t function without the core HRIS, so investing in an HRIS paves the way for greater scalability as a company’s workforce needs become more strategic and more interconnected with other areas of the company.

After investing in an HRIS like Zoho People, for example, customers can add modules on top of it as needed, such as Zoho Payroll, Zoho Shifts, and Zoho Recruit. Adding these directly to the HRIS avoids a sprawling ecosystem of disparate tools and the potential security risks that accompany a patchwork-style tech stack.

Moreover, having an HRIS upon which to build improves user experience because users don’t have to navigate and integrate various software tools; they’re all managed and accessible via one central platform.

Elevate your HR processes with an HRIS

Businesses of all sizes benefit from an HRIS. As a unified data repository, it automates repetitive tasks, generates reports, enables self-service, and more. Businesses with a hybrid or fully remote workforce particularly benefit from HRIS software because employees and HR can access critical, up-to-date information whenever and wherever they are.

The best part is that companies can expand upon the HRIS database to include more sophisticated capabilities that match their needs. Your company might need an HRIS, HRMS, or an HCMS depending on the following characteristics:

• Your company’s current size.
• People management pain points.
• What kind of data it wants to collect and analyze.
• What it wants to accomplish with that data.

Check out our explanation of the differences between an HRIS, HRMS, and an HCM to understand which type of HR system is best for you. Or, explore our HR Software Guide to browse top vendors across all three categories.