Why Must a Company have an HR Information System?

Ravi Rajasinghe

Consultant/Corporate Trainer

Having an ​HR information system (​HRIS) is crucial for companies to harness the numerous benefits it provides. An HRIS helps organizations streamline their ​HR processes, improve ​efficiency, enhance ​decision-making, ensure compliance, and create a better employee experience. This system acts as a centralized platform for managing all HR-related tasks, allowing HR professionals to automate manual processes, consolidate data, and generate insightful reports and analytics. Let us explore some of the key benefits an HRIS can provide.

  1. Efficiency, streamlining of workflows and Facilitating Prompt Decision Making:
    One of the key reasons why a company must have an HRIS is improved efficiency. By automating manual tasks such as employee data entry, payroll processing, benefits administration, and time and attendance tracking, an HRIS reduces the administrative burden on HR professionals. This allows them to spend more time on strategic activities that add value to the organization, rather than getting caught up in routine administrative tasks. The automation and streamlining of workflows also enable faster access to information, enabling prompt decision-making and responsiveness to employee needs.
  2. Centralized and Controlled Data Management:
    An HRIS provides a centralized repository for HR-related data, eliminating the need for multiple spreadsheets or paper-based records. This centralized data management ensures data accuracy and consistency across different HR processes and functions. HR professionals can easily access and manage employee information, such as personal details, employment history, performance evaluations, and training records. This not only simplifies data retrieval but also enhances data security by allowing HR departments to control access to confidential information and maintain data privacy.
  3. Reporting for Decision Making:
    In addition to improving efficiency and data management, an HRIS plays a vital role in decision-making. With the ability to generate reports and analytics on various HR metrics, such as employee turnover, performance, and training needs, HRIS provides meaningful insights into the workforce. These insights help HR professionals identify trends, spot potential issues, and make data-driven decisions to support organizational goals and strategies. By having access to accurate and up-to-date data, leaders can make informed decisions that optimize workforce management and drive organizational success.
  4. Accuracy, Data Integrity and Compliance:
    Another important reason for companies to have an HRIS is to ensure compliance with legal and regulatory requirements related to HR management. HRIS automates compliance-related processes, such as reporting on labor laws, tracking employee certifications and licenses, and managing leave policies. This reduces the risk of non-compliance and helps organizations avoid penalties or legal issues. HRIS also enhances accuracy and data integrity, minimizing human errors in HR processes and ensuring compliance with data protection regulations.
  5. Better Employee Experience and Better Employee Engagement:
    Lastly, an HRIS contributes to a better employee experience by providing self-service portals. These portals allow employees to access and update their personal information, view their benefits and pay statements, and request time-off. Empowering employees with self-service capabilities not only saves time for HR staff but also increases employee satisfaction and engagement. Employees can access the information they need anytime, anywhere, which leads to a more transparent and efficient HR process.


Conclusion: A company must have an HRIS due to its ability to improve efficiency, centralize data management, enhance decision-making, ensure compliance, and create a better employee experience. This system supports HR professionals in automating manual tasks, streamlining workflows, and generating insightful reports and analytics. By utilizing an HRIS, organizations can optimize their HR operations, make informed decisions, and ultimately drive organizational success.