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Understanding-the-Importance-of-Human-Resource-Information-Systems-1.jpgHuman resource information systems (HRISs) are platforms that help companies manage their human resources functions. These systems aren’t well-known outside of the HR field. Business owners don’t usually hear about these platforms until their HR managers ask for approval to purchase them.

If your HR manager wants an HRIS, should you invest? There are a lot of advantages of using an HRIS. Here are some of the benefits companies can enjoy after they start using human resource information systems.

Access to Up-to-Date Data

One of the major benefits of human resource information systems is that all your up-to-date human resources information is stored in one platform, which allows for a streamlined HR process. When employee information changes, it only needs to be entered once to override the outdated information. If your HR employees are currently using spreadsheets, they need to enter the same piece of information in several different sheets to update employee files.

When information needs to be entered in multiple places, there’s the risk that some sheets will be missed. This means some of your HR spreadsheets could be storing outdated employee data. Outdated data can cause problems for many aspects of HR.

Increased Productivity

When you didn’t have a large workforce, it was easier for your HR employees to manage the department with spreadsheets. As companies grow and hire more employees, these manual processes become very inefficient. Your HR employees may be spending a lot of their time performing data entry or searching for information.

Human resource information systems allow small businesses simplify HR processes. Tasks like employee onboarding, leave management, and benefits administration can be completed more quickly. This lets your HR employees get more done during their workdays.

Reduced Costs

Increasing productivity doesn’t just make your HR employees’ jobs easier; it can also save your company money. When departments are inefficient, they need more employees to complete their tasks. Efficient departments can get more work done with fewer staff members.

This can start to pay off as your company grows. If your HR department continues using inefficient processes, you’ll need to hire many more HR employees to keep up with your growing company. When you use a human resource information system, the same number of HR employees can handle the demands of a growing workforce.

Improved Compliance

Companies need to follow a lot of human resources regulations. There are regulations for recruiting, selecting, and hiring employees. There are regulations for wages, vacation time, statutory holidays, overtime, and hours of work. If keeping track of all that wasn’t hard enough, companies also need to follow regulations about terminations, layoffs, and dismissals, benefits and pensions, leaves, and more.

Now that your company has grown, it’s very hard for your HR employees to track all of these compliance issues. They need to make sure the company is following the rules for every single employee in the company. With an HRIS, it’s easier to monitor compliance. HR employees need to enter the applicable regulations, and then the platform helps them monitor compliance.

Lower Potential Liability

If your business isn’t compliant with labour laws, you could face serious consequences. Small compliance violations, even if they weren’t done maliciously, can have big consequences for businesses. Your company could get fined or even sued for the violation. By using an HRIS, you’re less likely to get into these types of situations.

Liability can also occur if you offer coverage that’s based on employee salaries, like life insurance. For example, if an employee gets a raise, but the insurance carrier isn’t told, the employee won’t have as much coverage as he should. If that employee dies before the salary gets updated, his family could sue your company. When you choose an HRIS with connectivity, the insurance carrier is automatically updated about these types of changes. 

Download "HRIS: The Who, What, When, Why, and How" Guide

Lisa Curic

Lisa brings almost 30 years of experience to her role as the executive vice president at GroupQuest Benefits Resources Inc. She has worked for several different insurance businesses and co-founded a group benefits MGA in 2006. Lisa’s dedication and hard work has played a significant role in growing GroupQuest from two to over 40 employees in less than 10 years, and in making it one of the largest group benefit MGAs in Canada. Outside of her busy work schedule, Lisa enjoys reading, travelling, working out, cooking, and spending time with her husband and two children.

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