Selecting the Right HRIS Technology for Human Capital Management

It has become ever clearer over the past decade that human capital management is most effective through the use of a Human Resource Management System (HRMS). A more litigious population and a more regulatory government demand that a company dot every “I” and cross every “T” when it comes to these two, potentially crippling areas.
In addition, HCM technology is necessary to find, recruit and hire the right talent, train them properly and get the most out of them. In short, an HRIS is necessary for any 21st century company to remain competitive. Finding the right system is the first step and asking the right questions is essential to accomplishing this task as easily and affordably as possible. The following are seven, very pertinent questions that every small business owner or HR director should ask before deciding on any HR Information System for their company:

Is the system flexible and scalable?
- No business remains static. With luck, it grows and adds new capabilities that demand new employees with new skills. To cope with this business evolution, a good HR system will combine scalability and flexibility. In addition, the software package must not only be able to import the latest spreadsheet and database formats, it must also be able to incorporate any needed legacy data from old company systems.

Can it accept data from multiple input sources?
- Similarly, employees, health care providers, insurance companies and others have differing data fields. A good HRIS must filter these inputs, populate the right fields and do it all in a precise, reliable and efficient manner. Some poorer systems require human intervention before an HRIS can interface with other necessary computer systems, thus defeating the whole purpose of the HR system.

Can the system be rules-programmed?
– The acceptance of data is one thing but the evaluation of the data is fundamentally more important. For instance, in the enrollment process, there any number of possibilities for an enrollee. A valuable HRIS, through the use of rules, messages, prompts, and options will exactly determine the eligibility requirements and thus facilitate the enrollment process. The alternative is a lengthy (and costly) phone call with either your own HR personnel or your providers. Either way, your company will end up paying.

Can the system be used in an enterprise-wide manner?
– Efficiently communicating with vendor systems is obviously necessary but the real advantage of an HRIS to a company is when it can integrate across the company’s internal systems. Payroll, benefits and operations share much of the same data on employees. Obviously, it is far easier to input new data and changes in a single instance than to repeat the process for multiple departments.

Who will implement the system and train the users? – While many small business owners may see the implementation of an HR application as the simple buying of a hardware/software package that can be implemented by his own personnel, others will rightfully see that there are usually extensive customizations that must be made to the system and some serious training that must be done. The determination of who is responsible for these activities is essential before the software package is actually purchased. In a similar vein, the installation of upgrades, the level of technical assistance available and what maintenance is included should also be determined ahead of the purchase.

How is security handled? – While a business owner can physically secure his terminals and servers, there is still the possibility of hackers accessing the system. A good HRIS, that is available online, must have the appropriate safeguards to ensure the privacy of your employee’s data and your company’s. In addition, the system should be backed up, at the very least, on a daily basis with more critical data backed up more often. On a related note, security privileges are another issue that should be discussed before the purchase.

Who owns the data? - On a more esoteric but incredibly important note, a company must establish who owns the data on any HRIS platform. While this issue is not a problem if the servers are kept in-house, the issue is likely to be problematic in a cloud-based solution. The end of a business relationship is not the time that you want to be negotiating for the return of valuable and proprietary company information.

Making the decision to implement an HRIS should be easy for a company of almost any size. But, as you can see, finding the right one is not so easy. Hopefully, these few questions will get you started in the right direction and, ultimately, help you determine the right HRIS to keep your business growing and successful.

About the Author
Carolyn Sokol writes about issues that may affect small businesses such as human resources, HR management software, and HRIS systems. She is a founder of and contributor to, both of which help match businesses to the right HR or payroll service provider for their particular needs. Her background is in marketing and communications, employee education and training, development of policies and procedures and the ongoing delivery of outstanding customer service.