4 Questions for a Successful HRIS Audit

What is an HRIS?

An HRIS is an integrated platform used to gather, store and analyze information about an organization’s HR. It serves as a central hub for employee information and aids in common HR functions like: recruitment; applicant tracking; benefits administration; compensation management; employee training and development; absence management; administrative HR services; and HR workflows and workforce reporting. While one specific HRIS may meet your HR needs, some organizations find themselves using multiple HR platforms that integrate seamlessly (e.g., an applicant tracking system and performance management software).

An HRIS can be a powerful tool for workforce management and help companies streamline and automate many business processes related to HR. Automation tools included in HRIS platforms can be especially helpful for reducing the potential for human error as well.

What are the types of HRIS platforms to consider?

There are many types of HRIS platforms, including the five outlined below.

• Operational HRIS: This system is designed to provide managers with the data required to support routine and repetitive HR decisions. They often include information about a company’s employees, employee positions and government regulations. An operational HRIS comprises various subdivisions: employee information systems, position control systems and performance management information systems.

“Operational HRIS platforms are best for small to medium-sized businesses that need to streamline their HR processes and improve efficiency,” Wende Smith, head of people operations at BambooHR, told us.

• Tactical HRIS: This type gives managers support for emphasizing resource allocation. These may include assistance with recruitment, training and development, design decisions, and job analysis. There are a few subparts in a tactical HRIS, including job analysis and design information systems, compensation and benefits information systems, employee training and development systems, and recruiting information systems.

“Tactical HRIS platforms are best for mid-sized to large organizations that want to leverage data to drive HR strategies and decision-making,” said Smith.

• Strategic HRIS: This kind focuses on supporting workforce planning, labor negotiations and certain specialized HR software. The major types of strategic HRIS have subparts that consist of information systems supporting workforce planning and specialized HRIS software.

“For long-term strategic planning, Strategic HRIS platforms offer advanced analytics and insights, which are crucial for larger organizations with complex HR needs,” said Melissa Vadasserril, director at Justworks.

• Comprehensive HRIS: This is an integrated database of HR files; employee position files; affirmative action files; employee files; skill inventory files; and a range of other HR files designed to produce reports for management.

“Integrated HRIS platforms are suitable for organizations of all sizes that want a unified HR system to streamline processes and improve employee experience,” said Smith.

• Outsourced HRIS: This includes outsourced HR solutions like professional employer organizations (PEOs) and employers-of-record (EORs). When you outsource your HR to these types of providers, it will include some version of HRIS, typically a comprehensive or integrated HRIS.

“Small businesses, in particular, benefit from using a PEO to manage back-office operations, stay compliant, and manage and grow their teams,” said Vadasserril. “For companies with global workforces, another option is an employer-of-record.”     

The wide range of HRIS types can make it tricky to know which system (or combination of systems) is right for you. As such, you’ll likely want to conduct a recurring audit on the HRIS you  choose to ensure it continues meeting all of your needs. If it’s not, it might be time to evaluate new HRIS solutions to replace or supplement your system.

4 questions to ask yourself when auditing an HRIS system

When evaluating an HRIS for purchase or auditing your current system, there are two primary objectives you’ll want to keep in mind: information and security. To assess these components during an HRIS audit, ask yourself these four questions.

1. Does the HRIS support achieving your company’s HR objectives?

To determine whether your HRIS is meeting HR objectives, evaluate whether the technology provided by your system supports your goals and streamlines your operations. Objectives often include training and employee development, benefits administration or self-service, and payroll and benefits administration. Does your HRIS help facilitate these things? It should.

2. Does the information available from the HRIS meet the needs of your HR team?

If your HR team spends 25 percent of its time on record-keeping and auditing, your HRIS isn’t doing its job and is costing your business in terms of employee productivity. The information provided by your HRIS should reduce the time it takes to complete HR processes. The system should allow for easy report creation and management, data-driven decision-making, and employee performance tracking. If the HRIS you’re evaluating or auditing doesn’t cover these bases, a change needs to be made.

3. Is the data in the HRIS confidential and secure?

Human resources departments are responsible for a large amount of confidential data: employee Social Security numbers, direct deposit information, benefits administration details and so on. Your HRIS must protect this information — from the time it’s entered into the system to what would happen should a breach occur. Clear documentation is necessary; plus, protocols, policies and controls should be built into your HRIS so that only those who need access to sensitive information can get it. This is especially true when it comes to complying with regulatory requirements.

“Many industries are subject to stringent regulations regarding data protection, such as GDPR in Europe or HIPAA in the United States,” said Vadasserril. “A secure HRIS helps ensure compliance with these regulations — minimizing legal risks and potential fines associated with data breaches.”

Your HRIS should minimize potential data loss and protect confidential information.

4. Is the data that flows into and out of other systems reliable and secure?

If you have seamless system integration with confidential information protection throughout, your HR data flow is on the right track in terms of security and reliability. From policies to protocols for data management, a robust HRIS should allow your business to integrate multiple software solutions as needed. Also, it should do so without the risk of data loss or information vulnerability.

“HRIS platforms store sensitive employee information such as personal details, payroll data, performance evaluations and more,” said Smith. “Ensuring platform security helps protect this confidential data from unauthorized access, breaches or cyberattacks.”

Another element to check is whether the data coming into and out of your HRIS flows together. This way, you can create accurate reports and make more decisions with the information available.

As you audit an HRIS, make sure you have policies and processes that allow for effective identification, communication, capture and validation of HR data. Focus on the aspects highlighted above to determine whether or not the solution you’re considering or evaluating meets your needs.

By asking these types of questions during an HRIS system audit, business owners can gain valuable insights into the system’s security, compliance, functionality and alignment with organizational objectives. This information can help identify areas for improvement, mitigate risks, and optimize the use of the HRIS system to support business growth and success.

Skye Schooley contributed to the writing and reporting in this article.