How to choose an HRIS

Whether you’re looking to streamline your HR processes to increase efficiency, make strategic changes that will help your business grow, improve the employee experience at your company, or all of the above, HR software can help.

A Human Resources Information System (HRIS) is a good place to start. HRIS software acts as a centralized database for all your company’s employee information, so your HR department can easily store, access, manage, and analyze employee records and data.

While an HRIS system can’t do things like onboard employees, run payroll, or administer benefits on its own, it can help you streamline and automate those tasks by integrating with other HR tools and providing them with the employee information they need to run those processes. Ultimately, this eliminates the need for manual data entry and tedious administrative tasks for your HR team.

Choosing the right HRIS can be confusing for a few reasons: 

• First, there are a ton of options out there, so finding the right HRIS solution that aligns with your business and HR needs can be a monumental task.
• Second, there are other types of HR software that might be a better fit, and people often use the term HRIS as a catch-all to refer to all of them, even though that isn’t quite accurate.

The five considerations below will help you choose the best HR platform for your needs—whether that’s an HRIS or a more robust workforce management platform like Rippling, which offers integrated HR, IT, and Finance tools all in one unified system.

1. Understand your HR and business needs

The first step in the selection process is understanding your needs—both from an HR perspective and from a broader business perspective. Put another way: What do you need your HR technology to achieve?

There are a few different areas of consideration here. First, think about who all of the different stakeholders are. There’s your HR department, of course. But are there other departments or employees at your company who will be affected by the software you choose? Managers? Your IT department? Make sure to consult them and get their buy-in as well. Then, consider how your HR technology may have ripple effects beyond just the HR department and impact your overall business. Consider whether you can choose a tool that fits into and supports your bigger-picture, strategic goals for your company.

Next, try to get a bit more granular about what your new system should do for you. Consider:

• What types of employee data do you need help storing, organizing, managing, and analyzing?
• What repetitive tasks do you find the most time-consuming? What are some of your current HR processes you want to improve? Which workflows in your business are the least efficient? What do you want to automate?
• Do you have other tools for HR tasks like onboarding and offboarding, payroll, and benefits administration? Do you need your new HRIS to integrate with those tools, or are you looking for a more all-in-one solution where they’re built into the platform?

These questions will start to help you determine whether an HRIS is the missing piece to your tech stack—or if a more expansive HR software solution might be a better fit for your needs (more on that later in this article).

2. Set a budget

Your budget is likely to be one of the main factors you’ll have to consider when comparing different HRIS vendors and other software solutions.

Typically, HR software is priced per employee per month. That means that not only is the cost dependent on your company size, but if you have plans to scale rapidly, you can expect costs to increase quickly and significantly.

There are other pricing factors to consider, as well. HRIS implementation can come with upfront costs, as some vendors charge setup or data migration fees. Also, consider the cost of training all your employees to use the new software. And keep in mind that many SaaS tools advertise features that aren’t always included in the base price—there may be additional costs for add-on features, especially if you need to add new modules or HR functions as your business grows and scales.

3. Consider your plans to scale

When choosing the best HRIS or other HR solution for your business, it’s important to consider your future growth plans. Choosing software that meets your needs right now won’t help if it doesn’t meet your needs in the future; it’s costly and inefficient to keep migrating to different HR management solutions as you outgrow them. The better choice is a software solution that’s built to scale with you—even if it means paying more or investing in features you don’t need now but anticipate needing in the future.

Another important factor to consider is whether your business has aspirations to grow globally (or already has a global team in place). While some HR solutions are able to manage tasks like international data security and compliance, paying employees in different currencies, and localizing paperwork, onboarding processes, and other HR data based on employees’ locations, not all HR software is made for managing a global workforce.

Rippling’s global workforce management solution is an all-in-one platform with everything you need to run HR, IT, and Finance globally. Rippling brings all your employee data from around the world into a single system, localizes everything based on employee location, and provides a single, user-friendly system where you can support a global workforce out of the box.

4.  Evaluate your existing tech stack

We alluded to this earlier in this article, but HRIS features are limited—they don’t actually perform HR tasks like payroll processing and benefits administration; they just integrate with other HR tools and provide the employee data they need to run those processes. They also make automation and streamlining of HR tasks a lot easier—since all the employee data is digitized in the HRIS, you don’t need to retrieve it from paper files or spreadsheets and manually enter it into your payroll or benefits administration systems. 

In that way, an HRIS can help you eliminate much of the manual and administrative burden of common HR tasks, freeing up your team’s time for more strategic work.

But that means an HRIS solution is only a good fit if you want to integrate it with other HR tools. That’s why the next step is to evaluate your existing tech stack.

For example, if you already have standalone payroll software you love, adding an HRIS could help you automate your payroll process by eliminating manual data entry.

Suppose you want your HRIS and other HR tools, like payroll, benefits administration, talent management, and more, in one platform. In that case, you’ll want to consider another, more robust type of HR software.

5.  Decide which type of HR software is right for your needs

That brings us to the final step in the selection process: deciding which type of HR software is actually the right fit for your organization’s needs. While many people (including most HR professionals) use “HRIS” as a catch-all term for all kinds of solutions, there are other options, each with distinct features and use cases.

The three main types of HR software are:

• HRIS: Human Resource Information System 
• HRMS: Human Resources Management System
• HCM: Human Capital Management 

HRIS software came in the 1950s when HR departments first started moving from paper files to electronic employee data.

HRMS software came in the early 2000s as more modern software companies started building solutions that included suites of HR tools in the same platforms. HRMS software often includes new hire onboarding, time and attendance tracking, payroll, benefits administration, talent management, and more—but it’s all built on top of a foundational HRIS that provides the employee data needed to run its HR functions.

In more recent years, we’ve seen the emergence of HCM software, a more complex, sophisticated set of cloud-based HR tools. HCM solutions often include the same tools as HRMS solutions—onboarding, time and attendance tracking, payroll, benefits administration, performance management, learning management, etc.—but they’re more complex. HCMs may also include more advanced tools like AI, data analytics, and talent management to help drive employee engagement.

Rippling: A fully integrated workforce management solution

Just like HRMS software evolved from HRIS solutions and HCM software evolved from HRMS solutions, Rippling represents the next iteration of HR technology.

Rippling is more than an HRIS, HRMS, or HCM—it’s a fully integrated workforce management solution, bringing HR, IT, and Finance into a single, unified platform.

With Rippling, your employee data isn’t stuck in a silo or trapped in apps or third-party tools; it’s in a single source of truth that’s the same across payroll, time and attendance, learning management, performance management, devices, expenses, app management, and more.

Everything in Rippling is automated—when an employee’s information changes, like when they get promoted or move to a new state, the software automatically triggers every downstream change, from updating PTO policies to changing their security permissions, without your HR team having to reenter any information in any system.

Rippling comes stocked with over 100 out-of-the-box workflow automations—plus, you can create custom ones to meet your company’s unique needs. Rippling helps you eliminate repetitive, manual tasks, freeing up your HR team’s time to focus on solving hard problems.

Plus, when all that employee data is in a single, centralized source of truth, your reporting capabilities become virtually unlimited. You can create any reports you want—using any employee, HR, IT, or Finance data—then calculate, filter, and visualize that data in endless ways. Now you’re armed with powerful insights to make data-driven decisions across your entire organization.

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.