Advantages & Disadvantages of Human Resource Information System

A small business may not see a pressing need to implement a human resource information system (HRIS) because they may not feel there are enough staff members to warrant it. As a business grows, there are significant advantages that an HRIS offers to help efficiently manage your team from the HR compliance perspective. But with any new technology system, there are disadvantages to consider before pulling the trigger for implementation.

Advantage: Payroll Integration

Integrating payroll is a cost-effective way to ensure that employees have access to payroll documents, such as withholding forms and direct deposit information. It also offers a portal so employees can retrieve pay stubs and tax forms rather than a human resources clerk having to produce, distribute and send to an employee.

Disadvantage: HRIS Cost

As with any new technology, there is a cost to license and implement a new system. Costs range, and they depend on the capabilities of the HRIS system, but they may be as high as $300 per employee for large companies with many benefits capabilities. Smaller companies should expect to pay anywhere from $40 to $100, and that doesn’t include payroll processor costs.

Advantage: Employee Files

An HRIS system allows employers to store and track all human resources documents, training and evaluations. From the moment a person is onboarded to the time he retires, his entire file is maintained with easy access. Managers are able to upload evaluation files, and employees can track which employment or benefits documents are missing. This takes a lot of clerical work out of the human resources manager’s office, and enables him to focus his resources on better recruiting and internal staff development.

Disadvantage: Security Breach

As with any computer technology and database, there is the risk that hackers will access information and use it for nefarious purposes. Employees provide employers with financial, tax and personal information such as emergency contacts. A security breach could be catastrophic.

Advantage: Benefits Administration

Employers are able to integrate benefits administration into HRIS platforms. This means employees can access employee benefits such as health benefits or retirement plans. Benefits administration is another aspect that eliminates clerical work from human resources departments to focus on developing staff rather than having staff spending their time filing and retrieving forms.

Advantage: Documents

An HRIS platform allows a portal for all important company documents to be accessed. Everything from employee handbooks and code of ethics to evacuation and emergency plans is stored in the HRIS platform. If someone needs to access it, all they need to do is to log in and grab the file and open it.

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