Small to Mid-Size Companies: Powerful can be affordable

As a company with 250 employees, you'd think Chris, the HR Manager, is already using an
HR information system (HRIS). Actually, she is still using Excel spreadsheets. Why?
Chris says, "Because we just don't have the big budget needed for an HRIS
implementation." An HRIS does not have to be expensive.

There are many HRIS products on the market that are reasonably priced and will include
the basic features needed to increase the efficiency of your HR department. Three primary
reasons that an HR Manager may be looking for an HRIS are easy access to employee
data, regulatory compliance and strategic planning.

Easy Access to Employee Data

While not all databases are alike, most offer a basic set of features that will allow
you to organize, store and retrieve employee data efficiently. These basic features
are likely to include:
   • Database for storing employee information (job and salary history,
     demographic data, etc.)
   • Tracking Leave and Attendance
   • Training and Licensing Management
   • Benefits Administration
   • Report Generation
   • Some Customizable fields

Government Compliance

Most programs will include many of the reports you need to be compliant with
government regulations, such as FMLA, OSHA, EEO, and Affirmative Action.

Strategic Planning

In addition to these basic features, many HRIS systems contain the tools to help
you analyze the employee data for strategic planning:
   • Employee Turnover
   • Succession Planning (skills lists by job, skills held by employees)
   • Salary Review & Budgeting (breakdown of salary & total employee
     costs)
   • Benefits (cost trends)
   • Performance and Talent Management

An HRIS can be affordable

For a company like Chris’ with 250 employees, a comprehensive HRIS database
program can cost under $1000 --- an affordable HRIS that will give you easy
access to all your data, increase the efficiency of the HR department and free up
time for more pro-active and strategic planning.
You may be saying to yourself, I really want a hosted solution, in which the HRIS
is housed remotely on the vendor’s server. If your budget is small, consider the
cost difference between a purchased and hosted solution. A “purchased” on-site
system will generally cost you less over time than a “hosted” system. In the
example of Chris’ company, there is a significant cost difference between a hosted
and purchased system.

   Purchased: one time cost of $995 (HRSource)
   Hosted solution: costs range between $2 - $5 per employee/per month.
   Using a $3 per employee cost, your yearly cost will be: 250 x $3 x 12 =
   $9000. Over 5 years that would add up to $45,000!

Obviously there are tradeoffs with purchased software: you have to maintain the
software and back up your own data. Check with the vendor to see if the support
agreement includes basic maintenance. Also, data can be backed up automatically
by utilizing your company’s existing backup system. A purchased HRIS can
often be customized to meet your unique needs, which is difficult for a hosted
solution that is providing the same database to many clients.

What about payroll?

You may want an integrated package that also includes payroll. If you have an
existing payroll provider or in-house system, an HRIS may be able to interface to
it using an import and export function. (You may also want to look into whether
your existing payroll system already includes an HRIS. Make sure you examine
the functionality of the HRIS system, as some payroll companies offer a very
feature-thin HR module.)

Scale up your HRIS over time

Another possibility is to scale up your HRIS system over time. Purchase the core
HRIS today and then add-on features later as your budget allows. This way you
are not sacrificing the system you ultimately want for the reality of what you can
afford today.

An affordable yet powerful HR system will improve your HR department’s efficiency and
productivity. While these systems may not offer every feature, they provide a strong
basic feature set at a price that most companies can afford. As you consider whether you
can afford a thousand dollars for an HRIS, consider the tradeoff of doing nothing. Do you
want your HR Manager tracking down data in Excel spreadsheets and file cabinets? Or
would you rather free up that time to help with strategic activities such as training,
performance management and workforce planning?

For additional articles and information to help you make your HRIS decision, please visit our News and Articles page of our website.________________________________________________________________________________
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