The 5 Types of HRIS Systems and What They Offer

Human resources information systems (HRIS) are among the hottest HR tech trends today. And for good reason. Many types of HRIS systems are available to help businesses better manage their HR functions. HR pros use them to automate routine tasks, improve the results from their employee recruitment and development efforts, and identify and define the company’s need for new roles. Business owners and managers use the systems to make better-informed plans and decisions using advanced data on employee performance and external competition. Employees can access the systems at any time to get information and update their data, which is convenient for them and also a timesaver for HR staff.

An HRIS system brings value to a business by:

• Centralizing employee data, including contact information and work history
• Making hiring and onboarding more efficient and effective
• Creating individualized employee development plans
• Streamlining employee benefits administration
• Tracking work hours and time off
• Automating payroll processing and recordkeeping and improving accuracy
• Increasing employee engagement and satisfaction
• Helping you to comply with HR requirements

The five types of HRIS systems

There are five main types of HRIS systems. When you are shopping for an HRIS system, knowing about the different types will help you weigh your options and select a system that best suits your company’s specific needs.

Three types — operational, tactical, and strategic HRIS systems — are categorized according to the types of HR functions they perform. Operational systems automate core HR processes, and the others add on more advanced features. The remaining two types – comprehensive and limited-function – are based on whether the systems provide a wide or narrow range of features. Which type will work best for your company depends on the nature of your business, the size of your company, your budget, and which tasks you want to automate.

Operational

An operational HRIS system handles core HR capabilities and data management tasks, including the day-to-day operations of the HR department. This type of system can help process payroll and manage and track employee data, using automation to save time and improve accuracy. These systems will typically work with the procedures you are already using, making them more efficient and more useful. If you currently handle these tasks by hand or use several unconnected software programs, an operational system can help make your HR workflow more efficient and free up HR staff to handle less routine matters.

Operational systems are often a more cost-effective HR software solution. They are a good choice for small and medium-sized businesses that have limited budgets and want to focus on the most essential HR functions.

Tactical

Tactical HRIS systems include key HR processes and go a step beyond. They provide HR data that managers and owners can use to make decisions and increase efficiency. They typically focus on recruitment, development, and training. The information that tactical systems provide helps managers make the best use of employees’ talents.

Tactical systems typically include applicant tracking systems, which help you recruit the best fit people to fill your openings. These systems can make the hiring process run more smoothly and assist with all aspects of recruitment and screening. Also typically included are performance management systems, which store performance evaluation data and help managers make informed decisions on employee performance, offer them other opportunities within the company, or provide them with extra support.

Tactical systems may also analyze data about other providers in your industry. Another typical function is analyzing how your employees are using their benefits, which can help you make decisions about your benefits package offerings to help save money and increase employee satisfaction.

Tactical systems are well-suited for companies that have concerns about getting the most out of their workforce.

Strategic

Strategic HRIS systems also include core HR processes and add advanced features. These employee systems provide analytics that help companies set goals and make informed decisions. They help managers and owners with big-picture planning.

The typical use for a strategic human resources information system is in workforce planning. They assist HR professionals in determining what new roles need to be created in the company and help define the jobs, including pay, required skills, and job functions. Strategic systems also typically offer learning management systems, which offers employee development and training to meet their new responsibilities and empower their learning.

Strategic systems are a good choice for companies that want to apply the benefits of technology to high-level decision-making.

Comprehensive

Comprehensive plans will support all or almost all important HR processes, including operational, tactical, and strategic needs. When you have multiple functions combined in one system, there’s a synergistic effect because the functions interact with each other. The sum of an all-in-one HR platform becomes greater than the parts.

Comprehensive plans are a good choice for larger businesses that need many HR functions and have the budget to pay for them.

Limited-function

Limited-function HRIS systems focus on one or a few core functions, such as payroll and benefits administration. Set-up and maintenance costs will be lower than for comprehensive systems.

Limited-function plans are often the best HR technology platform for smaller businesses that have tighter budgets and lean HR teams.

Things to consider when selecting an HRIS system

Now, let's review some of the factors to consider when your company is choosing an HRIS.

Company size

The larger your company, the more likely you are to have a bigger budget for HRIS set-up and maintenance costs. If you’re a small or medium-sized business, look for a system that focuses on the features you need and avoid paying extra for those that you don’t.

Type of HR services you need

Larger companies, in addition to being able to pay more, tend to need a broader range of services. Smaller companies should decide which services, if any, they need beyond the core HR processes before they choose a system.

Compliance needs

Companies of all sizes and types must keep their payroll procedures and recordkeeping in compliance with local, state and federal laws among other HR requirements. Beyond that, you should consider the specific compliance needs of your company, which will depend, in part, on what type of business you are running and what activities you engage in.

Budget and ROI

Your budget will influence whether you should get a comprehensive or limited HRIS system and which features you can include beyond core operational functions. You can also compare plans by estimating the ROI you will receive. Divide the cost of the HRIS (set-up costs plus fees) by the amount you estimate it will save you to calculate the ROI.

Integration

If you are already using human resources software that you would like to integrate into your new HRIS system, make sure that the integration will work with the HRIS you choose.

Scalability

Thinking to the future, do you expect your company to grow and, if so, how much and how quickly? If you expect your workforce to increase, look for an HRIS that can adapt to your changing needs.

Security

When you entrust your sensitive employee data to a human resources management system, it’s crucial that the system be secure. Before deciding, find out about how an HRIS handles data security.

Is an HRIS right for you?

An HRIS can help almost any business that has employees save money and time. With so many types of HRIS systems available, you can find one to meet your specific needs no matter what your company’s size or what type of business you conduct.

The TriNet HR platform provides powerful technology for companies that want to run their HR functions in-house. It’s an all-in-one HR toolkit that can help reduce the time you spend on payroll processing and benefits administration by 90%, cut onboarding time in half, and shave up to a week off of HR administration time per year.

Features include workforce management, payroll processing, and simplified benefits administration. Want to know more? Contact TriNet to book a demo today and see for yourself how an HRIS can transform the way you handle HR operations.

This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.