This post is co-authored by Cristina Silingardi and Molly Trottier.
Assessing, Selecting, and Implementing a Human Resources Information System (HRIS)
Fast growing businesses often hit their own walls in terms of processes and systems that have not kept up with the changes in their operations. Production problems and cash flow challenges get more press and immediate attention, however, the processes that impact your most valuable asset, your employees, should be critically assessed as well. Self-constructed tools, paper-laden processes, disparate spreadsheets, and simplified basics-only solutions are often found in growing companies. This quickly and increasingly produces pain points that become a barrier to achieving business objectives, and simply put, do not offer a great experience to employees. Inadequate systems can negatively impact the employee experience in general, from recruiting processes to onboarding, to retention, all of which impact the growth of the workforce.
Organizations need to implement or update an HRIS (Human Resources Information System) when they experience significant growth or related milestones that change their requirements for human resources functionality and focus.
What is an HRIS? An HRIS is a Human Resources Information System, a software solution or platform that enables the effective management of data and service elements of an organization’s HR function.
Putting the right HRIS system and accompanying processes in place requires careful consideration and dedicated follow-through. It is not a process to take lightly. Our work with clients to find the right HRIS for them spans three distinct phases – Diagnostic, System Selection, and Implementation. Below, we’ll explore each of the phases and the activities and considerations that comprise them.
Diagnosing HR Pain Points and Conditions
When it comes to HRIS, diagnosis entails a comprehensive assessment of an organization’s needs beyond the HR pain points and current processes and systems. The key focus is on the company’s growth trajectory and objectives, as well as broader organizational or departmental requirements or needs that extend beyond the HR Department. The latter element is especially important because the HR department is a business partner to all parts of the organization. The key to this approach is to focus on how HR can best serve the organization, what do they need to deliver to their internal customers (employees, department heads, executive leadership), from data to solutions to resources (the right people).
HR Pain Points and Processes
Just as every organization is different, so too are each organization’s pain points and processes. Typically, pain points are felt more or less acutely by different departments and employee groups within the company. Common refrains regarding the pain points associated with HRIS assessment include:
- We can’t quickly get to the information that we need and don’t have full confidence in the accuracy of the information that’s already there.
- Our HR team has to complete a lot of manual tasks and actions for employees that could easily be taken care of if we had self-service capabilities in place.
- The systems we have now don’t connect to one another which costs us a lot of time and siloes off departments.
- We don’t have as much confidence as we should that we’re 100% compliant with all the different requirements that we have to adhere to.
Growth Objectives and Their Impact on HRIS
Ideally, an HRIS will be able to grow and scale with the company. Selecting the right HRIS requires clear answers and alignment on questions such as:
- What is the anticipated pace for bringing new employees into the organization?
- Are there plans to expand operations into new markets or geographic areas?
- Will new employee capabilities or areas of expertise be needed to achieve the organization’s goals?
- What new elements or benefits need to be considered or added to attract talent??
- What are the best communication channels for the current demographic/location/work environment?
Organizational Requirements and HRIS
An HRIS’ role is to support all business operations. It is a tool that enables HR to be an effective business partner. The HR team will be managing the system in order to serve all other areas of the organization. The needs of those areas are key to determining what is needed from an HRIS. An effective HRIS selection process must get the perspectives of all stakeholders, not just the HR team. Before choosing an HRIS, it is also critical to look at the future needs of the organization and what would be valued from a cross-section of stakeholders, including:
- Operational Managers, who are often responsible for administering performance reviews, employee development, and delivering required training. They also need visibility into the candidate pool and progress in the hiring process, and payroll/personnel expenses to manage their departmental budgets.
- Executive Stakeholders such as CFOs who need employee cost data to form accurate projections. Information from the HRIS will guide decisions, assist with the management of the organization’s progress on diversity, equity, and inclusion and provide information on other initiatives that inform actions and goal setting.
- Frontline employees who are directly impacted form their onboarding experience to routine processes as submitting vacation requests, changes in addresses, managing benefit choices, signing up for training and development, submitting grievances, and other matters.
Selecting the Right HRIS
The thoroughness of diagnosing HR pain points and processes and the clarity achieved in identifying operational needs will determine the success of the HRIS selection. It’s important to recognize that there is no one perfect HRIS. The challenge is to select the best possible HRIS fit to get the organization where it wants to go. Four key elements of HRIS selection include:
- Features and Functionality – Put simply, can the system enable or perform the range of functions that it needs to? Vendors or platforms may say that they can tackle everything but come up short when put into practice. Check reference accounts!
- Cost Considerations – Cost goes far beyond the initial “sticker” price of a new HRIS. Implementation fees, training, ongoing support, licensing tiers, and feature-specific fees are among the other cost factors that must be considered. Additionally, organizations should consider the savings and reductions in liability they may realize from implementing a new HRIS.
- Configurability – Configurability refers to the range of options and variations that one can easily adjust in the HRIS to meet unique requirements (e.g., multiple languages, adding new cost codes, changing naming conventions, interfacing with current systems used, etc.). This is different from customization which requires changes to the core product.
- Complexity and Intuitiveness – Determine the level of understanding and training that will be required for employees to be able to use the HRIS as intended. The best systems (like today’s smartphones) are simple and natural for employees to use.
An additional facet of selecting the right HRIS is knowledge of the individual or team reviewing the available options. Hundreds of products and companies suggest that they provide an HRIS solution. Generally, they each think their own product is the best one for you. Be sure that your selection team includes deep HRIS experience and expertise that can cut through the array of vendor noise and lead the organization to a sound decision.
Many HRIS initiatives fail because organizations do not devote the time or resources required for successful implementation and ongoing adoption. When this occurs, it’s common for individuals to blame the system instead of looking inward. This is true for all system implementations, not just HRIS. Best practices for HRIS implementation include (but are by no means limited to):
- Map out workflows from start to finish (including employee touchpoints) that the HRIS will enable, automate, or support.
- Select “super users” that can put the system through its paces in testing and provide ongoing support to other users in the organization.
- Conduct rigorous pre-launch testing to identify process mismatches, further configuration needs, and proper connections to other systems.
- Prepare and deliver clear, well-timed, and phased communications to employees that convey the “why” for the new HRIS, what will be expected of them, and how they will be supported.
- Develop the right mix of dashboards and reports to make the newly available data actionable and ensure users know how to access and configure them to their needs.
- Encourage sustained adoption of the HRIS with measures such as training refreshes, on-demand access to support, and user feedback mechanisms (e.g., satisfaction surveys).
Not surprisingly, proper HRIS implementation depends on properly planning for it at the outset of an HRIS initiative. All too often, the desire to say that go-live was achieved before a certain date or the rush to get users up and running once a selection is made unnecessarily accelerates and short-changes the implementation process. Don’t let that happen in your organization.
Getting HRIS Right
Assessing, selecting, and implementing an HRIS is a significant investment and undertaking for any organization. Getting this right will result in tangible and intangible positive returns on the investment made. The right HRIS significantly lessens the time spent on tactical and administrative activities, enables HR to focus instead on more strategic initiatives for employees, and helps employees feel more valued and centered on their work and personal goals.
In short, the right HRIS provides an incredibly powerful lever for helping organizations maximize their most valuable resource, their employees.
Are you struggling with these or similar issues? If you wonder sometimes what you don’t know, or need assistance preparing your business for new levels of growth, request a complimentary consultation today from a vcfo expert. We have worked with more than 5,000 business teams in our 25 years. We would love to talk with you, hear your story and concerns, and share our experience and collective wisdom to see how we can help.