Need of HRIS systems for Small Companies

An HRIS system stands for Human Resource Information System, an online software application that helps manage human resources data such as payroll, benefits, and compliance documentation.

Human Resource Information System is a computer-based system that automates and centralizes the HR functions of an organization. The system includes data such as employee records, skills, work history, compensation, benefits, and other related information. It also includes data in the form of reports.

An HRIS system has these features: centralized storage; multiple employee records; efficient and flexible reporting tools; and cost-effective options. The utility of the HRIS systems cannot be ignored and the need for HRIS systems for small companies can be truly justified as they lower administration costs, increase productivity, and improve staff retention rate.


Components of HRIS System

The HRIS system is comprised of four components:

  1. Basic Data Management: This component includes information such as personal data and history with the company. It also includes creating a personnel chart that will display different skills and competencies with changes in position or status within the company
  2. Recruitment and Selection: This component provides information about the recruitment process from start to finish, including filing resumes, conducting interviews, and hiring employees
  3. Employee Relations Management: The employee relations management component provides tools for managing employees’ performance reviews, career paths within an organization, promotions/demotions, disciplinary actions, absences, training plans for current employees who are performing poorly in their positions
  4. Compensation/Benefits Administration: The compensation/benefits administration component tracks all salary transactions including wage rates or bonuses that are provided to employees and pension plans offered by employers


Why do small companies need HRIS systems?

A Human Resource Information System is used for the purpose of managing human resources in a company. The HRIS system benefits small companies as-

  • Facilitates Recruitment Process: HRIS facilitates the recruitment process by reducing the time consumed in screening potential candidates
  • Insights for Performance Review: Employers can keep track of performance reviews and the progress of their career development
  • Cost-Efficient Solution: Small organizations can save money since it reduces paperwork and associated stress-related to achieving deadlines. Employers can upload or request updates about each employee profile in real-time
  • Safe and Secure Information Storehouse: Information on various aspects of human resource management like recruitment and selection, training and development, performance measurement, and appraisal among others can be easily secured in the HRIS system
  • Improves statutory compliances: There’s less worry about compliance with central laws because everything is stored electronically and up-to-date. This also eliminates the need for training employees on how to complete paper forms
  • Smoothen HR Processes: Human Resource Information System is essential for small companies as it not only helps to keep track of the employee data but also allows employees to streamline and automate HR tasks more efficiently, effectively, and conveniently

Also Read: 5 Features An Organization’s Ideal Payroll Software Must Have!

How to Choose HRIS System for your organization?

Choosing the correct HRIS system for your organization can be a challenge for small companies. However, a well-curated checklist can help them in selecting the right software. Let us find out how to select a system:

  • Understand about the weak points, short and long term plans, HR requirements and much more about your organization
  • Allocate budget and list out the important features you need in your HRIS software
  • Research the online market, understand plans and enquire about implementation process of software
  • Before finalising the HRIS software for your organization, shortlist few and take their demo session
  • Re-evaluate your choice and re-match with your needs and decided parameters

Voila! Follow the above mentioned steps and you won’t face difficulty in choosing the best HRIS software for your organization and making the employee experience better.


Summing Up

No matter your organisation is small or big, HRIS software can streamline operations, automate HR functions, simplify interaction and increase the overall productivity. This software can improve the experience of your employees and customers. Thus, think no more and start exploring the options for your HRIS software!

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