A human resource information system, or HRIS, is a type of software that comes with several features that can help your small business more easily hire, train, compensate, monitor and manage your employees. These systems use a central database that securely stores company data for use in components related to financial management, time tracking, training, performance management, employee information management and recruitment.

When used properly, you can automate several HR tasks and access helpful reporting tools. Understanding the benefits that HRIS components can provide you and your employees is useful for deciding the types of HRIS systems that might work for your business.

Company Information Database

One of the essential components of HRIS systems is a database where all your information about employees and company HR procedures will be stored for use in the other HRIS tools. In addition to conveniently storing all your data in a central location for easy access, this database usually comes with features to keep your data secure, current and free from corruption.

Automated backups are a common feature that HRIS systems use to prevent data loss. You'll also often have access to technical support if you have trouble accessing your data or experience an emergency.

Financial HRIS Components

HRIS systems also include financial components for handling payroll, benefits and employee recognition programs. The payroll and benefits components will maintain information such as salary rates, commission and incentive plans, payment accounts and paycheck deductions like taxes, retirement plans and insurance options.

You'll usually find options to automate payouts, tax calculation and benefits enrollment. If the company rewards employees with gift cards or bonuses for good work, financial HRIS components have helpful reporting tools that you can use to determine these rewards.

Time and Attendance Tools

Another one of the key components of a human resource information system assists with keeping track of the time employees work and any incidents of tardiness or absence. Such information can be sent to the financial components to ensure employees are paid fairly.

These tools also can automate employee scheduling, send managers alerts when attendance problems occur and allow for documentation of time off and extended leave requests. Some systems even make it possible for employees to clock in remotely and support biometrics options.

Recruitment and Onboarding Tools

HRIS systems come with components that make it easy for your company to post job applications, handle employee referrals, send interview requests and track applicants throughout the hiring process. You can often access applicant profiles, record notes from job interviews, give employment tests, perform background checks and send job-offer letters.

Once employees are hired, there are tools that can automate onboarding steps such as document signing, new employee record keeping and compliance administration.

Employee Management Components of HRIS

Other HRIS components assist with the management of employee information. You can use these components to track employee performance, make changes to employee personal information, document feedback from performance reviews and maintain information about salary, benefits and disciplinary history.

To save you time and give your employees more convenience, these systems usually also include an employee self-service tool. This is often a special web portal that staff can access inside the company and sometimes at home as well. It provides a place for employees to change their information, enroll in benefits programs, request time off, look at their time records and even access tax forms like W-2s and W-4s.

Training and Development Tools

Most types of HRIS systems allow managers to design a training path for employees and even integrate training courses, tests and professional certification preparation in a portal that employees can easily access. They also record employees' progress and can even use work performance metrics to check whether the training has actually helped employees improve and assign additional training exercises as needed.

These training and development tools also come in handy when considering which workers to promote since they can support employee ranking. This is particularly helpful for making decisions about succession planning within your company.