How to Build a Human Resources Information System

Human resources management systems are game changers in managing and tracking employee data. They are a better way to manage human resources, which helps fast-track everything. What does HRIS mean in the context of human resources?

What is an HRIS?

HRIS stands for Human Resources Information System. It is a software package designed to meet the needs of employees. It automates tasks that are traditionally manually, such as recruitment, leave administration, attendance tracking, productivity evaluation, and payroll management. It includes a variety of features like a training platform or the ability to submit requests. HRIS is the most commonly used software in HR to collect, store, and manage employee information within a company, as well as to complete financial management processes.

Types of HRIS software

While different types of HRIS solutions share many of their features, modern HRIS systems are not completely identical. Here are the most common HRIS types you can encounter today.

  • Strategic. Strategic HRIS tools help the company evaluate the current state of affairs in the HR department, create short-term and long-term goals and projections, and correct the course if necessary.
  • Operational. Operational HRIS solutions are designed to assist with various tasks related to talent management and are often viewed as the enhancement of the current system’s capabilities.
  • Tactical. Tactical solutions are created to make managing existing resources easier, more effective, and fully compliant with the company’s policies and all applicable legislation.
  • Comprehensive. A comprehensive HRIS is a one-stop-shop regarding HR management and typically combines the features of strategic, operational, and tactical systems for better results.
  • Specialized. A specialized HRIS typically deals with limited HR tasks, such as benefits management, applicant tracking, payroll, or attendance records.

HRIS vs. HRMS

Human Resource Information System software is widely used across organizations globally, but it’s not the only type of HR software to know about. HRM, or Human Resource Management software, is also popular among businesses, and not only at the enterprise level. It goes without saying that these terms should not be used interchangeably, as they stand for different things. But what is the difference between the two and their most common uses?

You already know that the Human Resource Information System mainly deals with employee-centered features, such as compensation, benefits administration, and talent management. A Human Resource Management system, on the other hand, represents a wider range of data and features, including recruitment, applicant tracking, employee engagement, time and attendance data, learning management, performance reviews, internal promotions, and more.

An HR department may use both or use only an HRIS solution to manage all relevant needs. HRIS is usually the more lightweight solution of the two, and often, HRIS becomes the one HR management software solution the company uses on a daily basis.

Is HRIS implementation the right move for you?

When an organization uses a more old-fashioned solution for managing its HR needs, HRIS implementation and management may seem like a costly, resource-intensive endeavor that requires effort and participation from every employee. So, before you decide to invest in HRIS software development or implement a ready-made HRIS solution, you need to know it’s the right decision in the first place. Here are the key signs that the development and implementation of HRIS will work for your organization:

  • You’ve outgrown your current HR management solution. Whether it’s a simple spreadsheet or a small web-based HRIS, there can come a time when you realize it’s not enough and that your organization’s needs have grown beyond the available tools.
  • There are too many single-purpose tools. Organizations sometimes go the route of introducing a separate tool for every task as a quick way to fix things, which results in having to simultaneously manage a growing number of tools that won’t always seamlessly exchange information. The need for consolidated management is a key reason to adopt HRIS.
  • You’re missing the bigger picture. The ability to evaluate the entire state of the HR operations is a big argument in favor of an HRIS. With an ability to generate detailed reports in a matter of seconds that will tell you everything you need to know, you will never miss a window of opportunity and will always get a complete idea of where your HR department stands.
  • Important data gets lost. When your employees request vacation days over email, use a corporate chat to notify you of a sick day, and use printed-out timetables to plan their shifts, it’s only a matter of time before crucial data gets misplaced. The only working solution is to transfer all data exchange into a functional HRIS and help employees adapt to it.

Hiring and onboarding got challenging. The job market is constantly changing, and in some industries, applicants no longer have to chase the recruiter — it’s the other way around. However, when the hiring process is mostly run manually, some of the best candidates can drop out of the pipeline. Onboarding a growing number of candidates is also difficult when there is no specialized tool to support it.

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Key benefits of a Human Resource Information System

HRIS has a bunch of features that streamline HR work processes. It provides a cloud system with everything stored in a collection of databases to assist the department in managing people, policies, and procedures within a company.

The primary advantages of building HRIS applications are as follows.

  • Improved productivity. By reducing the amount of manual work, HRIS simplifies employee data tracking and reporting. As a result, data processing speed increases, and information accuracy improves.
  • Higher efficiency and better internal company processes. Tasks that used to take hours to complete can now be done in a matter of minutes or seconds. You get better employee engagement and team coordination. And the procedures are better organized.
  • Stronger decision-making strategy. Human resources information systems produce reports that can be easily shared between different departments to allow other members of a team to make better and faster decisions with a far-reaching effect on a company.
  • Employee-self management and boosted satisfaction. HRIS makes a difference not only for HR specialists but also for any other member of a team, including new hires. A self-service HR system simplifies onboarding processes and talent acquisition, allowing every employee to request time off or update their information through the system.

A visual platform like HRIS is a big investment decision for a company with a positive effect on cost efficiency. The system can be either a small database or a complex visual platform built from multiple modules. In the next chapters of the article, we will talk about how to get it done right.

Must-have features of a strong HRIS: Reporting, analytics, and more

Before you can move on to the HRIS implementation steps or even begin the development phase, you need to know for a fact what you want your HRIS solution to do. Modern HRIS systems can deal with a wide range of tasks, but not all of them may have the same priority for your organization. Here is the list of the most popular features to consider including in your HRIS solution.

  • Recruitment management. This feature allows for streamlining the entire recruitment process, from the point where the organization realizes the need to hire additional personnel to the point where the most successful applicant accepts the offer.
  • Onboarding and learning. Entrusting the onboarding process to an HRIS can save a lot of valuable HR team’s time and help achieve better employee retention. Companies can also introduce learning programs for new and existing employees to ensure a higher quality of work.
  • Attendance. HRIS is a powerful tool for tracking and monitoring time and attendance. When implemented correctly via integrations with physical technologies like key card entry systems, this feature eliminates the risk of employees interfering with their own records, and also helps the managers see the trends and unusual occurrences in the attendance data.
  • Payroll. Adding the payroll feature to the HRIS solution has multiple benefits for the organization: it significantly speeds up the salary calculation process, helps reduce the risk of error with the help of automated processes, and accurately estimates taxes and other related expenses.
  • Benefits. Sick days, vacation days, parental leave, and health insurance are just some of the benefits modern employees have come to expect. With the help of an HRIS, benefits administration becomes an easy and foolproof task no matter how many employees there are.
  • Employee self-service. A well-planned HRIS can make the job even easier for the HR department by introducing the self-service feature. Employees will be able to request time off, apply for benefits and promotions, approve management proposals, send out a resume for internal promotions, and more, all within one system.
  • Performance management. With the right metrics, an HRIS system can help the organization know for a fact that all employees are consistently working towards achieving the company’s business goals. It also helps identify employees who are underperforming and introduce measures to improve their work.
  • Employee satisfaction. Using various surveys and feedback mechanisms, organizations can successfully measure and improve worker satisfaction, reducing staff turnover and leading to better productivity across the whole organization.
  • Reporting and analytics. This may be one of the most integral HRIS features that can help advance every HR-related operation at a company. Every type of data, from systematic late clock-in of a particular employee to how the productivity of a certain department has changed over time, can be generated into robust reports in a matter of seconds.

Off-the-shelf HRIS vs. a custom solution: Which one to go for?

When you find yourself in need of an HRIS application, you typically have two options. One is to hire an HRIS developer to build the product from scratch, and the other one is to buy a ready-made solution from a vendor. Whether to choose an off-the-shelf HRIS solution or develop one from scratch is usually the question of the company’s specific needs and available resources.

The benefits of an off-the-shelf solution are clear: it’s affordable, fast to implement, and usually easy to integrate with third-party applications. The limitations of ready-made HRIS tools are also clear: they cannot always be personalized the way the client wants, are not always compatible with the HR solutions you’re already using, and there is a risk of vendor lock-in or the vendor discontinuing the support for the product.

With a custom HRIS, the main benefits include endless customization and scaling opportunities, so you can build a solution to fit your organization’s needs down to the smallest detail. The drawbacks of a custom system mainly revolve around the fact that it requires a more considerable upfront investment and will take at least a few months to build and implement. Custom solutions also don’t always easily integrate with other systems, and there are sometimes security concerns as well.

Overall, off-the-shelf solutions are typically recommended to small and medium organizations whose HRIS needs don’t venture beyond the standard functionality. A custom HRIS, on the other hand, is best suited for medium to large organizations and enterprises who are looking to streamline their HR operations and want a solution that is perfectly tailored to their needs.

Get the solution you need with custom HRIS development by QArea.

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How to define your needs with HRIS

To successfully create a human resource information system, first, identify the goals and expectations of the future platform.

1. Set project goals

What is the main purpose of implementing a custom HR information system in your company? The model you choose depends on what you expect to get. It can be anything from a transparent hiring process to a simpler way of handling payroll and people management. Determine the necessary functions and desired results.

2. Research the market

Who are you going to create HRIS for? What audience is going to benefit from using it? Different HRIS users may need different types of information in the system. For example, managers use it mostly to improve their decision-making strategy. Applicants use it to view available job opportunities.

3. Identify key stakeholders

Always communicate with executives and those who are going to develop a new HRIS platform to eliminate the possibility of internal conflicts and create a product that equally elevates design and function.

4. Analyze your HR processes

Evaluate your critical HR processes. Where and how is your HR data stored? In what way is it part of a workflow? Where do problems and interruptions in the flow occur? You may need assistance from professional business analysts to get all the HR processes, and practices analyzed effectively.

Factors to consider when developing HRIS

  • Objectives. The main goal is to enhance the ability of human resources management, which increases efficiency and reduces costs by providing access to a centralized database with up-to-date information. To create a more productive workplace and improve communication between departments, consider HRIS a hub for both HR staff and employees.
  • Functionality. Every HR management system focuses on talent pooling and recruitment by constantly keeping track of employee profiles. More comprehensive systems match profiles to the available positions and offer training where required or indicate where a replacement for a position is possible if the company needs it.
  • Security. Security and privacy are critical factors to consider when deciding to create a custom HRIS software solution. Sensitive employee and corporate data stored in a system should be protected by passwords and usernames. Access to information must be limited to authorized parties only.
  • Implementation. The implementation of a new system should not interfere with any operations inside a company. For a smooth changeover, create an implementation timeline and keep the old system functioning in case any historical data is required.

Best tech stack for HRIS development

The role of the technical stack in an HRIS development project cannot be overrated: the right technologies can elevate the project and help you quickly reach the goals, while the wrong technologies can sink even an excellent product idea. To answer the question of which technologies to use for HRIS development, let’s first answer the question of what is expected of a good HRIS.

In our experience, a solid HRIS solution must be fast, scalable, secure, compatible with different hardware and software, suited for various integrations, and maintainable. Given all that, the right HRIS tech stack can include the following technologies.

Back-end

  • .NET
  • Node.js
  • PHP

Front-end

  • React.js
  • Vue.js
  • Angular

Mobile development

  • React Native
  • Flutter

Steps to build an HR information system

The process of custom HRIS solution development is based on a comprehensive plan with a defined timeline and budget. The process of developing and implementing an HRIS includes the following steps.

1. Choose the tech provider for an HRIS project

The results you get are determined by having a product from start to finish developed by professionals who have prior experience in HR systems. A comprehensive implementation plan requires an appropriate vendor. The overall team requirements vary depending on the HRIS project you have, but the core of the team is always the same: business analysts, developers, and testers. An outsourced development team is an option if you want to select a team model tailored specifically to your project.

2. Develop a Minimum Viable Product for HRIS

It is better to create the smallest viable product, or MVP, with only a few critical features so that users can provide their early feedback and help validate a product before releasing a final version. A significant amount of money can be saved in this manner. The team gets direct insights into users’ expectations and experiences with HRIS. It is achieved without marketing hypotheses about how the product is going to be perceived when it is launched.

3. Consider both mobile and web applications

Consider mobile accessibility as an alternative to a web application for your future HR system because it is more convenient to use on the go. Typically, the decision to build HRIS software in the form of a mobile application results from MVP. It demonstrates that the majority of candidates prefer smartphones to computers.

4. HRIS product development

After collecting data and testing small pieces, complete product development begins. All features are created and gathered. At this stage, the product is tested to see if there are any gaps between the requirements and the results.

5. Continue HRIS maintenance

It is not enough to create HRIS software to add value to your business. Once the system is built, it must be regularly maintained and monitored. Any software, especially one with numerous integrations and modifications, requires updates. Maintenance should never be overlooked if you want to get the most out of your system and address current needs. The best HR systems are live systems. They are adaptable and expand as the company grows. As a result, ongoing support is required.

For more effectiveness, find a software development team that can cover all the aspects altogether and build a fully functional HRIS application.

How much does it cost to build an HRIS?

The cost of developing an HRIS application depends on many different factors: the scale and complexity of the project, the high-level and low-level requirements, the people the development team will consist of, the number and complexity of integrations, the additional services like support and maintenance, and so on.

Let’s say we are planning to build a basic HRIS that includes the following modules:

  • Recruitment
  • Talent management
  • Attendance
  • Payroll
  • Benefits

Presuming that the entire development project will be outsourced to a software development company and there are no in-house specialists, the typical composition of the team will include:

  • A business analyst
  • A UI/UX designer
  • A project manager
  • A solution architect
  • Two back-end developers
  • A front-end developer
  • Two manual QAs

We’ll note that some of these specialists, like a business analyst or a solution architect, may be employed on your project part-time or only during its certain phases. 

On average, it takes six months to develop a comprehensive HRIS application. The average hourly rate of the specialists involved ranges from $25 to $50. With each full-time specialist working on the project for approximately 1,000 hours, each one can cost from $25,000 to $50,000 for the entire duration of the project. Therefore, the overall cost of the development project can range from about $180,000 to $250,000 and beyond, depending on whether you skip some features or services and what you expect to get in the end.

Our experience with switching to an HRIS

As a software development and testing company, QArea employs over 350 engineers and regularly has new job openings that need to be filled quickly and with maximum efficiency. Moreover, for a few years straight, our organization has needed a universal solution for storing and managing employee data after using several different solutions for different purposes. This is how we made the decision to implement an HRIS.

Given that we were already using Odoo, a popular ERP and CRM tool, for a variety of internal tasks, building our HRIS using Odoo was a no-brainer. Odoo is fast, reliable, secure, and highly customizable, which is exactly what we are looking for in a human resource information system.

Here is what our Deputy Head of HR, Polina Stoliazh, who oversaw the transition, has to say about the move:

“The new Odoo-based HRIS became instrumental in facilitating centralized employee information management. Before that, we used several different solutions, which made it harder to quickly locate the necessary information, often led to misplaced or lost data, and prevented employees from accessing self-service features that are typically offered by web-based HRIS systems.

With HRIS implementation using Odoo, our employee data processing has become streamlined and much more user-friendly for everyone involved. We were finally able to store all staff-centered information, from attendance records and payroll to benefits and compliance, in one place. We also introduced self-service functionality, where employees can review their own profiles, log work hours, request time off, and contact their team lead, project manager, people partner, and other management team members. And when an employee is away from the computer, they can use one of the AI-powered chat bots we’ve developed for popular mobile messengers to request time off, and the information will instantly be recorded by our HRIS.

Overall, the switch to an HRIS has brought nothing but positive changes to the entire operation at QArea. The new solution is not just for the HR department and development and testing teams, but also for the financial and legal departments, who use data from the HRIS for a whole range of essential tasks. Right now, we would never go back to the way we used to do these things.”

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Final thoughts

A comprehensive HRIS tool is not something you desperately need to launch an organization. In fact, many organizations realize their need to implement an HRIS long after the company goes live. However, the introduction of an HRIS can make a world of difference in the efficient, error-free, compliant, and straightforward human resource management process. As organizations grow and evolve, an HRIS turns from an option into a necessity, so the sooner you begin to map out the future solution and look for a reliable development partner, the better.

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