Selecting an HR Information System (HRIS)

Selecting an HR Information System (HRIS) application was a task that our company just completed.  This software will not replace people, but will need to close the gap on previously identified shortcomings.  It will automate several of our current processes which should enable us to scale our business.  The Society for Human Resource Management (SHRM) gave us excellent tips on how to assess and select an HRIS software. The following is an excerpt from a SHRM article on the process to use for identifying the right software:

Step 1: Initial Assessment

First, an organization must make the determination whether the selection process will be carried out by internal HR resources or if the organization would be better served to engage a consultant from the beginning. For smaller HR departments or HR professionals who have not experienced this process before, it can be a bit overwhelming and involve a huge time commitment. Therefore, if the department has the need but does not have the time available to take on the data-gathering and evaluation process, hiring a consultant to assist with this process may be a wise choice.

SHRM helped us to select the right HRIS application for our company.
Sandi Webster, C2G Partners

Step 2:  Assessing Organizational Needs

When beginning the process of selecting an HRIS system for an organization, HR professionals should look beyond the needs of the HR department and consider the strategic plans of the organization. An organization on the precipice of an aggressive growth period will have different needs than one that is “right sizing” or condensing operations. Taking these strategic plans into consideration will help ensure that the system selected will be the right choice for the organization beyond the short term.

Assessing the organizational and departmental needs will be a company-specific endeavor. Generally speaking, the size and breadth of responsibilities that the HR department has will be different from organization to organization. Some departments will be responsible for payroll, and some will not. Some will have a fully functioning recruiting department with dedicated personnel, and some will not. Therefore, the minimum system requirements for each organization will differ to some degree. However, each organization will need a system that will gather, organize and securely maintain employee data. Additionally, the system must provide standardized reports such as turnover, terminations, new hires, EEO-1, VETS-100 and other compliance-related reports.

We selected an HRIS software that worked with our current payroll and benefits modules which allowed us to enroll, track and process benefits as well as produce notices.  We also selected the timekeeping and employee self-service (ESS) modules.

In making a choice between needed and desired features, organizations must consider the ways in which the system may improve current procedures such as new-hire processing and internal transfers. The greater the value that the organization will see from the module, the more likely it could be considered a need versus a want.

Additional modules that organizations may wish to consider as part of their HRIS package are performance management modules, training and development modules, organizational chart modules, position control capabilities, attendance modules, time-keeping modules, recruiting and applicant tracking modules, and e-forms.

Step 3:  Assessing the Project Parameters

Once the organization has fully developed a list of minimum requirements and a list of additional desired features, determining the parameters of the project is the next step.

Budgetary constraints

An organization must determine the budgetary limitations of the project. HR systems are available at various price points to fit within the budgetary constraints of differently sized organizations.

Technological constraints

Consideration must also be given to the technological limitations of the organization. The HR department should confer with the IT department to obtain the necessary information related to the technological constraints of the organization. Does the organization have the necessary server space and infrastructure to handle a purchased software product?

In our case, we selected an application that was Software-as-a-Service (SaaS) to avoid additional IT support.  It was costlier, but will be less expensive over time.

Step 4: Other suggested requirements

Time constraints – Other projects on the HR calendar or annual events such as open enrollment and performance evaluations may limit the availability of HR staff to work through the implementation process.

Select the operations team – Operations team members may provide important day-to-day perspectives of both the value and challenge of using these tools and may bring concerns to light that could become issues at the time of implementation.

Demonstration and Evaluation – HR should select three to four vendors to come onsite to present a demonstration. The complexity of the system and the list of minimum requirements will have an effect on the length of time that HR should schedule for the demonstration. Each member of the project committee should be able to attend the presentations and to ask relevant questions. Team members will also discuss how the software meets or exceeds the requirements of the organization. This evaluation and debriefing process is repeated for each software package demonstration.

In negotiating with the service provider, organizations should secure a service contract providing ongoing maintenance, updates to address changing compliance needs and software updates to ensure compatibility with other software packages (e.g., Windows updates, payroll system updates, accounting system updates). Now that HR has completed the arduous process of selecting an HRIS system, HR managers’ work is just beginning as they prepare for the implementation of the software.