Table of contents
  1. What Is the Main Functionality of an HRIS? 
  2. What Are the Risks of Not Having an HRIS? 
  3. What Is the Difference Between an HRIS, an HRMS, and an HCM system? 
  4. How To Choose the Best HRIS for Your Business
  5. When Should I Start Using an HRIS?
  6. How To Effectively Implement an HRIS
  7. HRIS Data Security and Privacy
  8. Conclusion

A Human Resources Information System (HRIS) is software that enables businesses to electronically store and manage their employees’ data in a secure way. It removes the need for complicated spreadsheets or paper-based systems, allowing for an easy and streamlined way to access data as and when you need it. 

An HRIS can also generate reports on workforce metrics, which is essential for a business to flourish. Furthermore, a fit-for-purpose HRIS will enhance the employee experience whilst managing the full employee lifecycle. 

What Is the Main Functionality of an HRIS? 

Different HRIS software platforms will have varying functionality. However, an HRIS will generally enable you to do the following:

  • Store employee personal information (address, contact details, etc.) and sensitive data such as nationality, ethnicity, religion, marital status, and medical issues
  • Store job information (title, start dates, working pattern) and contractual documentation
  • Hold employee emergency contact information in a central location
  • Record annual leave entitlement within each employee profile, as well as booked/taken annual leave dates
  • Record sickness absences
  • Report on basic employee metrics, such as absences, employee turnover, etc. 
  • Record performance review information, including objectives or key performance indicators
  • Hold information relating to remuneration and benefits
  • Allow employees to update their own personal information and submit requests, such as for annual leave

What Are the Risks of Not Having an HRIS? 

As your business grows, so will the size of your team, and the absence of an HRIS may impact your organization’s ability to operate smoothly. Any holes in your data security processes could risk information being lost or shared with unauthorized personnel. Furthermore, failing to follow local or national regulatory requirements in data protection can have serious consequences, such as prosecution.

What Is the Difference Between an HRIS, an HRMS, and an HCM system? 

  • An HRIS is the simplest way to hold all essential information regarding the employee lifecycle. It tends to be provided via cloud-based software-as-a-service platforms that incur a monthly fee. This means it’s easier to maintain and usually comes at a much lower cost. 
  • An HR management system (HRMS), can generally manage more complex information and has more reporting capabilities. They tend to be used by larger organizations, as they can usually cope with a greater number of employee profiles. 
  • Human capital management (HCM) software has the most advanced functionality of all three. An HCM system is an integrated suite of applications, whilst an HRIS is more like a database. As well as holding data, HCM systems have more complex reporting functionality that businesses can use to drive strategic HR initiatives. However, HCM systems usually come at a far higher cost and aren’t always worth the investment for smaller organizations. 

How To Choose the Best HRIS for Your Business

To choose the best HRIS that meets the needs of your organization, you should consider the following:

  • The size of your business: some systems will become glitchy with too many employee profiles held within them. 
  • The functionality you require: what employee metrics do you rely upon to inform your business decisions? Do you need reporting capability within the system? 
  • The way your employees work: if some or all of your employees work remotely, it will be important to have a cloud-based system that is accessible to the whole workforce via personal devices. 
  • The cost of the HRIS: you’ll need to set a monthly budget for this.
  • The responsiveness of the HRIS support/technical team: it’s important to know you’ll have the help you need if there are any problems with the system. 
  • The needs of the employees accessing the system: the HRIS should be intuitive and easy to navigate, or you’ll be continually fielding the same questions about how to update a contact number, for example. 
  • Any necessary integrations with other software platforms, such as payroll. 

When Should I Start Using an HRIS?

You can begin using an HRIS from day one, even if your business might have only a handful of employees. It’s important to start as you mean to go on, by demonstrating best practices concerning issues such as data security. 

As a general rule, however, many businesses opt for an HRIS once they have over 20 employees. An HRIS will enable you to automate a wide range of processes; having streamlined workflows will save considerable time that you can then invest in further developing your growing business. 

How To Effectively Implement an HRIS

Implementing an HRIS can be a complex process, as it will impact stakeholders across the organization. Here are some essential steps to follow to ensure the process runs smoothly and it has a positive impact on the employee experience:  

  • Define a project plan and timeline for implementation.
  • Communicate with the workforce in advance: begin a two-way dialogue to gain a deeper understanding of their needs in relation to an HRIS. 
  • Delegate responsibility for key deliverables of the project, and identify who has overall accountability for delivery.
  • Ensure that data is cleansed before migration to the new HRIS so that only current data will be transferred. The transfer time will be much faster, and you will be able to perform more efficient searches when using the new system. 
  • Train all employees on the capabilities of the new system and how to use it.
  • Appoint someone as the main point of contact during the initial days and weeks following implementation, to field questions in a timely fashion. 

HRIS Data Security and Privacy

It is imperative that access rights to your new HRIS sit within the HR function or the senior leadership team. You must carefully control who has access to the data that’s held on the system—the sensitive data should not be shared among an administrative team, for instance.

Before choosing your HRIS provider, it’s also worthwhile reviewing its company policies on data retention. The provider’s data retention policy will outline how it stores your data securely and how long it is held within its servers. An awareness of this means you’ll be able to confidently confirm your processes are in line with data protection regulations. 


The use of an HRIS is key to the smooth and effective running of any organization. It’s important to approach the implementation of a new HRIS in a considered way, from the careful selection of the most suitable HRIS to training staff on how to use the new system. An awareness of data protection regulations is also imperative during this process to ensure that your organization is compliant with the relevant legislation.