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Five Types of HRIS Systems
There are five main types of HRIS systems. When you purchase an HRIS system, understanding the different types will help you weigh your options and choose the system that best suits your company’s specific needs.
Three types—operational, tactical, and strategic HRIS systems—are classified based on the type of HR functions they perform. Operating systems automate core HR processes, while other systems add more advanced functionality. The remaining two types (comprehensive and limited) depend on whether the functionality provided by the system is broad or narrow. Which type is best for your company depends on the nature of your business, company size, budget, and the tasks you want to automate.
operate
An operational HRIS system handles core HR functions and data management tasks, including the day-to-day operations of the HR department. Such systems can help process payroll and manage and track employee data, using automation to save time and improve accuracy. These systems often work with programs you already use, making them more efficient and useful. If you currently handle these tasks manually or use multiple disconnected software programs, an operating system can help you make your HR workflow more efficient and free up your HR staff to handle fewer routine tasks.
Operating systems are often a more cost-effective HR software solution. They are a good option for small and medium-sized businesses with a limited budget who want to focus on the most basic HR functions.
tactical
Tactical HRIS systems include key HR processes and go one step further. They provide HR data that managers and owners can use to make decisions and improve efficiency. They typically focus on recruiting, development, and training. Tactical systems provide information that helps managers make the most of their employees’ talents.
Tactical systems often include applicant tracking systems, which help you recruit the best people to fill your vacancies. These systems can make the recruitment process smoother and assist with all aspects of recruitment and screening. Also typically included is a performance management system, which stores performance appraisal data and helps managers make informed decisions about employee performance, connect them to other opportunities within the company, or provide them with additional support.
Tactical Systems can also analyze data about other providers in your industry. Another typical feature is analyzing how your employees use their benefits, which can help you make decisions about benefits package offerings to help save money and increase employee satisfaction.
Tactical systems are great for companies that are worried about getting the most out of their workforce.
Strategy
A strategic HRIS system also includes core HR processes and adds higher-order functionality. The analytics provided by these employee systems can help companies set goals and make informed decisions. They help managers and owners with big-picture planning.
A typical use of strategic human resource information systems is workforce planning. They assist HR professionals in determining what new roles the company needs to create and assist in defining jobs, including salary, required skills and job functions. Strategic systems also often provide learning management systems that provide development and training for employees to meet their new responsibilities and enhance their learning capabilities.
Policy systems are a good choice for companies that want to apply the benefits of technology to high-level decisions.
Comprehensive
A comprehensive plan will support all or nearly all critical HR processes, including operational, tactical and strategic needs. Synergy occurs when multiple functions are combined in a system because the functions influence each other. The sum of an integrated HR platform is greater than its parts.
Comprehensive plans are a good option for larger businesses that require many HR functions and have the budget to pay for them.
Limited functionality
HRIS systems with limited functionality focus on one or more core functions, such as payroll and benefits administration. Setup and maintenance costs will be lower than comprehensive systems.
For small businesses with tight budgets and lean HR teams, Limited Features plans are often the best HR technology platform.
Things to consider when choosing an HRIS system
Now, let’s review some of the factors your company should consider when selecting an HRIS.
Company Size
The larger your company is, the more likely you are to budget for HRIS setup and maintenance costs. If you’re a small to medium-sized business, look for a system that focuses on the features you need and avoid paying extra for features you don’t need.
The type of HR services you need
In addition to being able to pay more, larger companies often require a wider range of services. Smaller companies should decide what services, if any, they need beyond core HR processes before choosing a system.
Compliance requirements
Companies of all sizes and types must ensure that their payroll procedures and recordkeeping comply with local, state and federal laws and other human resources requirements. In addition to this, you should also consider your company’s specific compliance needs, which will depend in part on the type of business you run and the activities you engage in.
Budget and ROI
Your budget will influence whether you should purchase a full-scale or limited HRIS system, and what features you can include beyond core operational functions. You can also compare plans by estimating the return on investment you will receive. Divide the cost of the HRIS (set costs plus fees) by the amount you estimate it will save you to calculate ROI.
Integration
If you already use HR software and want to integrate it into a new HRIS system, make sure the integration works with the HRIS you choose.
Scalability
Looking to the future, do you expect your company to grow? If so, how much and how fast is it growing? If you anticipate an increase in headcount, look for an HRIS that can adapt to your changing needs.
Safety
When you entrust your human resources management system with sensitive employee data, the security of your system is paramount. Before making a decision, please understand how the HRIS handles data security.
Is an HRIS right for you?
HRIS can help almost any business with employees save money and time. There are many types of HRIS systems to choose from, so no matter the size of your company or what type of business you are in, you can find one that meets your specific needs.
The TriNet HR platform provides powerful technology for companies looking to run their HR functions in-house. It’s an all-in-one HR toolkit that helps you reduce payroll processing and benefits administration time by 90%, cut onboarding time in half, and save up to a week of HR administration time per year.
Features include workforce management, payroll processing, and streamlined benefits administration. Want to know more? Contact TriNet today to schedule a demo and see for yourself how HRIS can change the way you handle your human resources operations.
This communication is for informational purposes only and is not legal, tax or accounting advice, nor is it an offer to sell, buy or purchase insurance.
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