As startups look to build out their HR function, one of the first things they normally require is a Human Resources Information System (“HRIS”). At its most basic level, an HRIS houses all your employee data in an organized and reportable database. The most robust systems offer modules supporting virtually every function of human resources AND connect to other systems such as payroll, benefits, and IT to ease the administrative burden.
When should a startup implement an HRIS
Startups could start with an excel sheet as a homegrown HRIS and then move to a system when they have a handful of employees. Having a system ensures the basic employee and company needs are covered and reduces the manual nature of an excel sheet. For example, for time off, tracking this in a spreadsheet is a manual effort but it’s necessary for determining how many days employees have left and what the financial liability is. If employees leave, they would need to be paid anything that has been accrued but not used. If you’re not tracking it, you’ll have no idea what you need to pay out. Not paying it out has legal implications.
Things to consider when choosing the right HRIS for your startup
There are a lot of HRIS vendor options to choose from and prices vary considerably. Some boast a free HRIS that are coupled with other products. Some offer a core set of tools and optional modules you can buy when ready. Others offer different packages based on your stage and size. It’s important to consider what you need from your HRIS now, in the short term and in the long term. This tool will be something that your HR team, leaders and employees will interact with regularly, so it needs to be user-friendly, dependable, and support your culture.
- Organization of Core Data
When selecting an HRIS, one of the most critical factors to consider is how the system organizes and manages your core HR data. A well-structured HRIS should provide a centralized, easily accessible repository for employee information, including personal details, employment history, benefits, and payroll records. Effective data organization within the HRIS not only ensures that information is accurate and up to date but also facilitates compliance with regulatory requirements and enhances decision-making processes. Look for systems that offer customizable data fields, intuitive navigation, and robust reporting capabilities to meet the specific needs of your organization. - Reporting
You want your HRIS to be able to meet your reporting needs. What kinds of standard reports exist? Can you create custom reports? Are there automated reports and notifications. - Time Tracking
What sort of time tracking does the HRIS provide? Does it support salary and hourly time off, holidays, shared calendar, project tracking, and attendance? - Security
Understanding your HRIS’ security capabilities will be critical. Does the system allow for different roles and permissions? i.e. admin, managers, contractors? Does it support with 2FA and SSO? Where is the data stored? Who is responsible if there is a breach? - Recruitment
If you are planning to grow quickly, you will want a system that can facilitate your recruitment process and potentially have an Applicant Tracking System (“ATS”). Questions to ask, include; Are there limits to the number of open positions? Does the tool connect to key job sites? What’s the reporting like? Are there automated emails for stages of recruitment. - Compliance
Ideally, your HRIS will facilitate your Company’s compliance requirements, whether it be surrounding having executed docs or mandatory training. If this is important to you, your HRIS should have required training and tracking, policies, e-signatures, document storage and permissions. - Performance Management
As a company grows, implementing performance management becomes critical. Will you use this system for performance management? Does its structure support your vision of feedback? How much customization is available to support performance management. - Compensation
Beyond data changes, will it house your compensation framework? Will it tie to payroll, benefits, options, and finance tools? - Contract Terms
What is the pricing model and how does it scale with growth? What is the time commitment? Can you opt in and out of modules easily? How do you extract your data if needed? What kind of customer support is included? What is done with the data upon termination? - Other Modules and System Integrations
Think learning management, eNPS and other employee surveys, benefits admin. Consider how it integrates with other non-HR systems. i.e. finance, expense management, payroll and IT. This isn’t always critical in the early days but becomes more important as you grow.
It’s important to remember that an HRIS is only as good as the data in it. As information changes, new people are added, and more features are built out, it’s imperative that someone is accountable for regular updates to the system. As most systems now have real time reporting, having the most current data in system will ensure the data is reliable. Whether it is someone in HR (fractional or full-time) or another team member who manages the data, ensure there is a resource whose job it is to update the system as information changes.
If you’re looking to implement an HRIS and build out your HR infrastructure, BrightIron’s HR team can help you choose the right solution and implement it. We have demoed a lot of systems, and we can save you time by shortlisting the ones best suited for your company, stage, and culture. We can also save you money on the implementation costs and you can leverage our experience to build out the system quickly. Our goal is to help companies land on the right tool for them and empower leaders, employees and administrators to work in the system with confidence.