The different types of HRIS systems: a guide

HR leaders know just how essential it is to have the right software in place to get work done. Not only can it save you precious time, but it can also give you valuable insights into your organization’s team dynamics.

A human resources information system (HRIS) does just that. 

There are many HRIS options out there, and choosing the right one for your industry can make or break your HR department. 

This guide will teach you everything you need to know about the different HRIS systems, explain how to choose the best system for your business, and explain the differences between an HRIS and other types of HR software.  

What is an HRIS? 

An HRIS is a software package that simplifies and streamlines HR responsibilities. It’s also sometimes called an HRIS system or HRIS software. We’ll use these terms interchangeably here. 

At its core, an HRIS manages people within an organization. It stores and organizes employee data to help HR teams with recruitment, training, performance management, and other HR policies and processes. 

This type of software also makes it easy for employees to take ownership of their responsibilities and communicate when they have a problem. 

Companies can run HRIS systems from their on-premises IT infrastructure or use a cloud-based system. Cloud-based HRIS systems are popular because they’re easy to update, scalable, and accessible from anywhere in the world. 

If business owners want their companies to succeed, they need to invest in the people within their teams. 

Arming HR professionals with the right software helps to bridge the digital skill divide, which is the gap found between the number of jobs that require critical digital skills and the one-third of workers who don’t have those skills.

Without the right software and tools, HR team members are limited by their capabilities and speed. An HRIS has the potential to cut out hours of manual data capture, analysis, and management, making it an important tool for HR managers. 

Areas where an HRIS can help HR professionals

An HRIS can support companies as they tackle particularly pressing HR challenges, including data analytics, employee recruitment, and retention. 

The main ways an HRIS can help your business are as follows:

• Improved employee management. An HRIS handles employee information from the moment a candidate applies for a position. Most HRIS systems allow for electronic signatures, self-paced employee onboarding, and self-service updates to the employee database, making employee organization a breeze for HR departments. 

• Centralized data storage. An HRIS holds all employee information in one place, making it easy to find what you’re looking for without wading through years’ worth of paperwork or disorganized spreadsheets. 

• Streamlined HR responsibilities. An HRIS automates and provides self-service opportunities for employees, simplifying HR responsibilities like payroll, recruitment, training, performance analysis, and time off. 

• Increased HR productivity. An HRIS gives HR professionals more time to focus on high-level responsibilities by cutting out paperwork, automating repetitive tasks, and allowing employees to input and manage their data. 

The different types of HRIS systems

Any business owner knows that streamlining their company’s tech stack is critical for maximizing efficiency across the board. Reducing the number of platforms and applications your team uses makes it easier to manage data, track and visualize performance, and reduce costs.

When choosing the right HRIS, it’s important to find the type that’ll facilitate the most growth for your business.

Initially, you might pick a solution that offers an affordable pricing plan with the flexibility to grow as your business does. For growth-focused companies, a platform with a variety of features, a simple interface, and the ability to add integrations is ideal. 

There are five different types of HRIS systems: 

1. Operational

2. Tactical

3. Strategic

4. Comprehensive

5. Limited-function

All of them offer employee self-service, applicant tracking systems (ATSs), automation, centralized data storage, and talent and recruiting management capabilities. 

The right system for your organization depends on your specific needs and priorities, such as your scale of operations, team size, projected revenue, phase of business growth, or work models.

Operational 

An operational HRIS focuses on reporting data on employees, their responsibilities, and their productivity. It has custom-built capabilities to help with internal talent management. 

Operational HRIS systems help HR personnel with recurring tasks, such as the following: 

• Gathering employee information to note workforce trends or growth patterns

• Assessing positions to note where you’re missing talent or specific skill sets 

• Performance management to ensure high-quality services with minimal disruptions to production.

This type of HRIS comes in handy when you’re looking to make lateral moves with your employees in your organization. It sorts employee data so you can see who in your team is best suited for a specific role or project. 

A company should choose an operational HRIS if they want to prioritize employee development and retention. 

Tactical 

A tactical HRIS helps businesses make informed decisions regarding recruitment, onboarding, compliance, benefits, and ongoing training. This software focuses on boosting efficiency across the organization and managing internal resources effectively using enterprise resource planning (ERP) systems.

A tactical HRIS manages the following: 

• Recruitment and onboarding processes 

• Employee development and training

• Benefits and compensation information for each role

You can also use a tactical HRIS to determine appropriate compensation for specific roles in your company. This type of solution offers guidelines regarding salary based on industry standards, which you can meet or exceed depending on your current budget allowances. 

A company should choose a tactical HRIS if they want to prioritize resource allocation. 

Strategic 

Strategic HRIS systems are designed to help your business seamlessly expand. Their focus is on filling specific roles within your company and ensuring strategic planning to maximize growth and facilitate smooth team expansion. 

A strategic HRIS can help with the following tasks: 

• Creating plans to enter new markets

• Preparing for new projects 

• Organizing team members and their schedules in preparation for new roles or additional work 

Strategic HRIS systems allow for proactive workforce planning and development. They help HR teams perform job analyses to determine the required skills for a role, the scope of responsibilities a candidate would need to fill that role, and an appropriate reporting structure and salary to implement in that role. 

A company should choose a strategic HRIS if they want to prioritize intentional hiring practices and smooth expansion. 

Comprehensive 

A comprehensive HRIS combines the functionalities of operational, tactical, and strategic HRIS systems to offer a complete solution for your HR needs. 

This type of HRIS is a general system that can help with everything from reporting and data organization to employee processing and resource allocation. It’s built on the principle that the functionalities of each HRIS system influence each other in multiple ways. 

But the extra functionality comes at a cost: comprehensive HRISs are typically the most expensive option. So for a smaller business, this system might exceed their budget.

An organization would choose a comprehensive HRIS if it was large enough to need all three functionalities.

Limited-function

A limited-function HRIS is, essentially, the opposite of a comprehensive HRIS. It is a specialized HRIS that combines employee data management with one other specific purpose, such as employee training or benefits management. 

New or small businesses have narrow HR needs. So for them, investing in a full-scale HRIS might be unrealistic and a waste of resources. Limited-function HRIS systems bridge the gap between having no employee management system and having a solution that’s too complex for your needs. 

Ultimately, a limited-function HRIS likely won’t work for you unless you have very specific gaps you’d like to fill. When using a limited-function HRIS, you have the option to upgrade to a better HRIS down the line. This option makes limited HRIS systems ideal for companies that have just started. 

A company should choose a limited HRIS if they have narrow, specific HR needs and a limited budget. 

HRIS vs. HRMS vs. HCM

HRIS, HRMS, and HCM refer to human resources information systems, human resources management system, and human capital management, respectively. While many people use these acronyms interchangeably, each system has unique features that make it better suited for different companies and setups than the others. 

All three of these software systems incorporate databases and cloud computing to manage workforce needs.

So, how are they different? 

Each one prioritizes certain aspects of business and HR management. 

For example, some companies prefer a data-management-focused approach to their human resources management, so they make use of HRIS systems. Others prefer an employee-focused approach and use an HRMS system to meet their organizational goals. And, some look to make more data-driven decisions and use HCM to access advanced reporting and analytics functionalities. 

Finding the right solution for your company is important for preventing frustration and wasted time. 

HRIS

An HRIS is the most general type of HR software. It offers the following functionality to help with daily human resources-related activities:

• Employee data management 

• Recruitment 

• Time and attendance management 

• Workflows and standard processes 

• Employee benefits 

• Payroll 

Most HRIS systems have a self-service portal, so employees can access and update their information as needed. Some also include training and employee upskilling functionalities. 

However, dealing with HRIS software does come with challenges. You have to be careful with data security and compliance. Also, be wary of disruptions to company productivity when updating regular HR processes. 

HRMS

An HRMS has all the capabilities of an HRIS, but dives deeper into employee analysis through talent management and analytics. This system works well for modernized workplaces looking to reduce their turnover rates and nurture talent. 

Talent management and optimization functionalities include the following:

• Career trajectory 

• Competency tracking and employee experience measurement

• Employee training, development, and upskilling 

• Budgeting and compensation 

• Additional employee engagement features

With an HRMS, you can reward high performers or check in with employees who aren’t meeting their deadlines. Regular performance feedback maintains transparency and accountability throughout your organization, allowing for improved employee performance and productivity. 

The most common challenges when working with an HRMS are project and workforce management, global payroll, and compliance.

HCM

HCM focuses on providing businesses with data they can use to shape their strategies and guide their planning. 

In addition to the employee management capabilities of an HRIS and the talent management capabilities of an HRMS, an HCM includes the following:

• Succession planning 

• Business intelligence 

• Access to industry data 

• Advanced reporting and analytics 

An HCM is ideal for businesses looking to get strategic about their growth. Companies can use industry data and benchmarks as metrics to see how they compare to competitors and make data-driven changes where necessary for growth. 

The most common challenges when working with an HCM are high turnover rates and global compliance. 

Where do these systems fall short?

With all their capabilities, these systems still often fall short when managing global employment. 

Generally, HRIS, HCM, and HRMS systems are not purpose-built for international hiring and global expansion. If your company has employees in multiple countries, then you need to find an employee management system that caters to your unique needs. For example, you’ll need a solution that can manage global compliance and payroll processing.

This is where a global HR platform can help you. 

Global human resources platform

A global HR platform is a software solution that facilitates global expansion by helping businesses manage multi-currency payroll, global compliance, remote onboarding, and more. 

Many global employment solutions integrate with HRIS platforms to fill gaps in functionality and help companies manage global teams. 

Remote is the market leader in multi-country payroll and placed in six categories in G2’s Best Software Awards for 2023. It’s a simple-to-use, purpose-built platform that makes global employment easy. 

Remote manages onboarding, benefits, payroll, terminations, leave, expenses, and equity for a global team — with compliance assured at every step of the journey. Our software integrates with other HR tools, too, like Greenhouse, Bamboo, and Bob, to give global companies a powerful, custom HR stack.

Remote: your global employment solution

An HRIS can make managing your team easier than ever before. If you’re looking for software to streamline your HR team’s responsibilities, boost your workplace productivity, and maintain transparency, an HRIS is a worthwhile investment. 

And if you’re looking to expand your global team, a global solution is the software for you. 

Remote is a global HR platform built to make global growth quick, easy, and inexpensive. It offers the ideal alternative to an HRIS for a startup or small- to medium-sized business that doesn’t require a full-service HRIS and wants the flexibility to hire anywhere.

Remote also offers simple integration with leading ATS and HRIS platforms, keeping your tech stack lean while giving you the power to manage large global teams with ease. 

Ready to take your business global? Get started with Remote today! 

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The ultimate HRIS guide for companies going global

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