HRIS Selection Guide: How to Choose the Right HR Tech

People Tech, Software / By
HRIS Selection Guide

So you are in the market for a new HR technology … HRIS selection is on the horizon, and you’re going at it alone.

Whether you are moving from spreadsheets, or upgrading from a small payroll provider to a full HR tech system, you will need to structure your search. It’s one of the most important software selections your business will have to make, as it carries the tools and workflows to enable the operations of getting people to do work effectively, hire and retain employees, and manage the payments of employees and contractors – one of the largest expenses for most businesses.

An HRIS not only streamlines HR operations but also impacts employee engagement, compliance, and overall productivity. This guide is designed to walk you through the essential steps to make an informed HRIS selection that’s best for your company for the foreseeable future.

Why You Need an HRIS

Before diving into how to choose, let’s understand why an HRIS is indispensable:

  • Streamlined Operations: Automate repetitive tasks like payroll calculations and attendance tracking. As headcount grows, these tasks become soul-destroying labor.
  • Data-Driven Decisions: Access to real-time data helps in making informed decisions and locate financial waste in labor mismanagement.
  • Compliance: Keeps you up-to-date with labor laws and regulations, and changes are built into the tech. You can find and interrupt long term compliance problems.
  • Centralization: Your data will all be in one place – as will the key features you expect in the HR function – Performance Management, Time and Attendance, Compensation and Benefits, Payroll, Preboarding, Onboarding, Offboarding, and Expense Management.
  • Best Practices: Takes the guesswork out of the “how” particular tasks should be done, with base configurations and process flows that move you in the right direction without having to design it entirely yourself.
  • Automatic Notifications: You don’t have to manually keep up with important deadlines and occurrences that have to do with HR.

Note:

In the context of searching for a core HR system, the following terms are generally interchangeable and can be interpreted to be largely the same, though the Account Executives selling the software may argue otherwise, and the way they market these software confuses the buyers anyway.

HRIS (Human Resource Management System): Used to manage internal HR functions like payroll, benefits administration, and employee data. There is a greater focus on centralized data and HR metrics.

HRMS (Human Resource Management System): Generally the same as HRIS, and can be meant to be more focused on Talent Management and Recruiting as features.

HCMS (Human Capital Management System): Emphasizes the management and optimization of the workforce as a capital asset, and often includes global HR and payroll.

WFMS (Workforce Management System): You will hear this less commonly, as workforce management software features (headcount planning, employee scheduling, and human capital budgeting) has generally been integrated into larger core HR technologies.

ERP (Enterprise Resource Planning): This generally refers to a total enterprise business solution, in which the HR and Payroll technology is only a small piece of the total feature set.

Key Features to Look For in HRIS Selection

Data Management

Ensure the system can handle various types of HR data, from employee records to time-tracking. A competent platform should have date effective audit trails with accompanying reporting that administrators can easily access.

Sample Questions for Vendors:

  • How do I track down the user who made a certain change to the configurations, and is the data time-stamped?
  • Is every data point in the system available to be used in custom reporting?
  • Can employees enter their own demographic data? Can they add their own skills, certifications, employee documents,
  • How does this platform handle historical HR data?
  • How can I mass upload any type of data for employees?
  • How are documents categorized? Which document formats can be uploaded?
  • Is this a cloud system or on-premises? Is it integrated with a larger ERP system or a standalone HR tech system?

User Experience

A system that’s hard to navigate will deter usage. Look for intuitive design and user-friendly interfaces.

  • Is there a dedicated support specialist?
  • How many layers of automated communication does it take before I get a person?
  • How many clicks does it take to achieve [describe your HR process step].
  • Does the product allow the admin or HR user to cycle between employee records quickly and with minimal load times?
  • Which of your features are built by the company and fully integrated with the software, and which features are “white label” product from another HR tech vendor?
  • Does the product feature Single Sign-on capability?
  • Does the interface match the org’s work styles, culture, and tech stack?
  • Does the product have employee and manager SSPs (Self Service Portals)?
  • Is the product compatible across browsers and devices? Is there a mobile version of the app?
  • Are there accessibility settings available for the product?

Scalability

As your business grows, your HRIS should be able to grow with you. Evaluate how the price changes as you add new users and employees. Determine the cost to add additional features that you anticipate the org will use as you reach certain milestones in its life.

  • How long are load times between screens? Does it increase with greater data volumes?
  • Is there a competent report writer for custom reports you’ll need as you grow (stay away from anything that still uses Crystal Reports)?
  • What is the HR tech vendor’s product roadmap?
  • Can custom security roles be designed?
  • How robust is the software integration marketplace?
  • Show me an example of a custom field and where else can I use these custom fields?
  • Does the product allow centralized access and password management?
  • Are additional features billed per active feature user, or per active employee?

Implementation and Training Considerations

  • Timeline: How long will it take to go live?
  • Training: Will the vendor provide training for the HR team?

Vendor Evaluation

Before reaching out to HR vendors, conduct a vendor evaluation to determine who you should even talk to. This is the essential work to make the right HRIS selection.

Fit Gap Analysis

Perform your HRIS selection comparisons using a Fit-Gap Analysis, using scoring as a tool to make the early eliminations. The remaining vendors will be roughly close to meeting your requirements. Here’s a step-by-step guide to doing it effectively:

  1. Define Your Requirements:
    • List out all the features and functionalities you need from the software. Categorize them into must-haves and nice-to-haves. Alternate categories can be: Wish List/Desired, Required, Current.
    • Determine if you only require a software solution or also need a service provider. Based on the answer, you may be including PEOs and HR Outsourcing Agencies in your evaluation.
    • Consider aspects like data management, user experience, scalability, integration capabilities, compliance, support, and budget. Basically, all the considerations we discussed above.
  2. Research and Shortlist Vendors:
    • Identify several software vendors that seem like they could meet your needs based on preliminary research. Use tools like G2, TechnologyAdvice, or Capterra to find software that at a glance, has all the features that are in your must-have feature list.
    • Aim for a diverse mix of solutions to ensure a broad comparison.
  3. Develop a Scoring System:
    • Assign a weight to each requirement based on its importance to your business. For instance, must-haves could be scored out of 10, while nice-to-haves could be scored out of 5. You can also build a formula to “knock out” a vendor if they score less than the max score on any must-have requirement.
    • Decide on a scoring scale for how well each software meets a requirement, such as 0 (does not meet), 1 (partially meets), and 2 (fully meets).
  4. Conduct the Fit-Gap Analysis:
    • For each software option, go through your list of requirements and assign scores based on how well each requirement is met.
    • Document any gaps or areas where the software does not fully meet your needs.
  5. Calculate Scores:
    • Multiply the score for each requirement by its weight to get the weighted score. Use formulas to minimize the work of manual calculations.
    • Sum up the weighted scores for each software to get a total score.
    • Calculate the Total Cost of Ownership for each narrowed down vendor selection.
  6. Review Additional Factors:
    • Beyond the quantitative scores, consider qualitative factors such as vendor reputation, customer support quality, and the flexibility of the software to adapt to future needs. Distinguish objective production and service feedback from subjective user anecdotes and misplaced blame.
    • Also, consider the cost of not only purchasing and implementing the software but also training staff and maintaining the system.
  7. Make a Decision:
    • Use the scores as a guide to narrow down your options. The software with the highest score might not always be the best choice if there are significant gaps in crucial areas or if it falls short on qualitative measures.
    • Consider conducting demos, free trials, or requesting references for your top choices to further inform your decision.
  8. Document and Present Findings:
    • Prepare a report or presentation summarizing your findings, scores, and recommendations.
    • Include an executive summary, detailed scores, and an analysis of gaps and how they could be addressed.
    • Make sure you are involving the right people in the final decision and presentation of the selection.
HRIS selection fit gap analysis
Sample HRIS Selection Fit Gap Analysis

HR Software Cost Comparison

Understand the costs of software ownership:

Total Cost of Ownership Formula

Where:

  • Upfront Costs: Licensing, hardware, and implementation labor and professional services.
  • Ongoing Costs: Maintenance, upgrades, support, and additional modules.
  • Indirect/Incidental Costs: additional labor hours (cost of manual processes, additional risk, software bugs/downtime/troubleshooting)

For your set of finalists, calculate the total cost of ownership for each vendor. Note that the total cost of ownership, is by definition inexact and is a projection based on assumptions. Try to keep your base assumptions, such as expected and historical labor hours or subscription fees, grounded in reasonable expectations.

HRIS Selection Tips and Tricks

Include the current state HR system in your Fit-Gap analysis.
Nothing drives the point home more clearly to the numbers folks than to show the current state side by side with the vendors under evaluation. Especially once you get to the total cost of ownership, and administrative load, and inability to satisfy “must-haves.”

Never select an HR software vendor after one demo.
You wouldn’t get married after one date, would you? A single encounter with the product and the vendor reps won’t let you validate all your requirements, and it won’t let you . Don’t give in to pressure to make a rushed decision on a multi-year financial commitment.

However, don’t wait on total consensus.
There will always be someone who’s not onboard with moving to a new software. They may have logical reasons, or it could just be sentimental attachment to something they created. Regardless, like any high level org decision, it must make good business sense, and keeping expensive redundancies and risks is not that. For that minority of folks who still don’t believe in the HRIS selection, work on them, try to convert them from detractors to champions as early and often as possible. Show them how their concerns can be alleviated and their requirements are handled, even if it is as a smart work-around to a process they’re used to doing a certain way.

Always request the conditions under which implementation fees may be waived, either in part or in full. During the pricing phase, the vendor will present the pricing and contract, and you will generally have the ability to make requests. Often, you may be able to knock down fees if you were referred by a partner, agree to sign on as part of a temporary deal/discount program, or have an internal team managing the implementation from the inside. That is good for the vendor; they do not have to contribute as many resources toward your implementation if you have very simple requirements, or agree to shoulder a greater proportion of the project workload.

Always vet and choose your internal Implementation Team prior to kicking off the project with the vendor.
Remember to even have an internal implementation team! The vendor will determine when the product is live based on their contractual implementation timeline, and will require your team to do extensive background work while they deal with the main points that are required to get you to “Go Live.” The implementation features and functions that are not key to going live are likely to be handled internally or be left unimplemented without capable folks managing the project and doing the heavy training and configuration work. This drives down utilization rates for software features you’re paying for.

The right HRIS selection is a significant investment in your company’s future. Take your time, do your research, and don’t hesitate to seek expert advice.

HR Tech is hard to do alone. Partner with Poprouser’s HR Systems experts for a smooth and effective HR system transition.

Book A Call Now
Cody Bess
Latest posts by Cody Bess (see all)