Choosing the Right HRIS Part 1: The Essential Criteria

Webinar Recap: What You Need to Consider When Selecting an HRIS for Your Business

Selecting the right Human Resources Information System, or HRIS, can be a daunting task for any organization. HRIS streamlines HR processes, enhancing efficiency and accuracy in tasks like payroll, benefits administration, and employee data management. They also offer robust reporting and analytics, providing insights that support strategic decision-making and improve overall organizational performance. An HRIS can play an important role in your organization’s operations, so selecting the right one is critical.

In our recent webinar with Sensiba (“Do You Have the Right Systems in Place for Your Business?”), three HRIS subject-matter experts discussed the key criteria that should guide this critical decision. PBO Advisory’s Consulting Chief People Officer Nicole Devine and PBO’s Consulting HR Director were joined by Sensiba’s Sage Intacct Practice Director Tom Achor for an in-depth look at how companies should assess, select, and optimize HRIS for business success.

 [Previous Reading: Is Your HRIS Working for You? Part 1 | HRIS Assessments and Recommendations Part 2]

Choosing the right HRIS involves a comprehensive evaluation of your organization’s current and future needs, integration capabilities, cost, and the ability to customize and scale. By considering these essential criteria and engaging in thorough planning and interdepartmental coordination, organizations can select an HRIS that not only meets their immediate requirements but also supports their long-term growth and efficiency.

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The Eight Criteria for Choosing the Right HRIS

1. Outputs and Reporting: Tom emphasized the importance of the system’s ability to produce accurate and useful outputs, such as financial reports and dashboards, which are the ultimate reason for adopting an HRIS. “We really need to get that output from the system in a way that’s coherent and reliable, and meets all of our basic auditable standards,” he said. This involves having robust approval processes and a well-structured account and cost center setup.
2. Integration Capabilities: Integration with other systems, especially accounting software, is crucial. PBO’s Consulting HR Director highlighted this point by noting, “If you’re a company, a nonprofit or something of that nature that has to have certain reporting or cost centering, that’s a big piece that’s often missed in HRIS systems.”
3. Scalability and Future Growth: When choosing an HRIS, it’s important to consider the organization’s future growth. PBO’s Consulting HR Director advised a two-year projection window, saying, “What you don’t want is… to pay for big implementation and have all this time and effort and have to change the system out in two years because you’ve doubled in size from 25 to 50.” Planning for future needs helps avoid costly and time-consuming system changes. He also recommends a look back over the last couple of years to see if there are any growth trends to help with future predictions.
4. Ease of Implementation and Maintenance: Tom pointed out the significant effort required to move from one system to another, despite what salespeople might claim. “It has to be less work than you would have been doing otherwise to keep it going and still get the same results,” he said. Ensuring you have the right talent and resources to implement and maintain the system is crucial.
5. Cost and Budget Considerations: Budget constraints are a universal concern. “Cost is obviously a big one as well. Budgets. What can you afford? What can’t you afford?” PBO’s Consulting HR Director remarked. Evaluating the total cost of ownership, including implementation, maintenance, and potential upgrades, is vital.
6. Customization and Flexibility: Every organization has unique needs that may require specific customizations. Tom mentioned the importance of creating a detailed list of requirements that your business needs. “We basically make a long list that’s by area. And then what we need to do is give it some grading for how important it really is, and weight it that way.”
7. Interdepartmental Coordination: Ensuring that HR and accounting systems work well together is essential. This coordination helps avoid manual work and creates an accurate and efficient data flow between departments.
8. Adaptability to Industry-Specific Needs: Different industries have varying requirements, such as prevailing wage or certified payrolls. These criteria add complex layers to the system and the reporting requirements. Other factors, such as if the business operates in multiple states or internationally, must also be considered.

For those navigating this complex decision, remember the words of the professionals: “There is no perfect system.” However, with careful consideration and planning, you can find an HRIS that is the best fit for your unique business needs.