Key Criteria for Evaluating Human Resource Information Systems for Small-to-Medium Businessesv1.0

An Evaluation Guide for Technology Decision-Makers

Table of Contents

  1. Summary
  2. HRISs for SMBs Primer
  3. Report Methodology
  4. Decision Criteria Analysis
  5. Evaluation Metrics
  6. Key Criteria: Impact Analysis
  7. Analyst’s Take
  8. About Bill Witter

1. Summary

In the midst of a lingering pandemic, widespread labor shortages, and intense competition for talent, human resources (HR) technology has never been more important. Human resource information systems (HRISs) are critical solutions to help organizations manage data and processes across the employee lifecycle, from recruitment to offboarding. These solutions are particularly important for small-to-medium businesses (SMBs) looking to digitize key administrative duties and manage the complexities of hiring across multiple jurisdictions but aren’t ready to invest in a fully featured human capital management (HCM) solution.

As shown in Figure 1, HRISs focus on core HR processes and data, providing a foundation for eventual investment in experience-focused HCM applications.

Figure 1. Applications across HRIS and HCM Domains

HRISs consist of applications that help generate, process, and centrally store employee data. HR teams use self-service modules to specify important data fields and then collect updates on demand from employees as required. All data is structured and stored for use across any other process within the HRIS ecosystem. This includes recruiting, onboarding, payroll, benefit administration, and time tracking. Codified policies help HR teams ensure compliance with labor laws and other regulations via prebuilt workflows, secure document execution, and alerts when data is missing or errors occur.

These functions are critical to SMBs standing up scaled employee management, especially in a remote operating environment. Advanced time tracking functionality helps disparate teams improve transparency when paired with dashboard summaries of important metrics and employee messaging services for ad-hoc requests or issues. HRISs also integrate with other common business tools, cultivating a holistic solution across an entire business.

HRISs can drive significant efficiencies through centralization and automation of common HR processes. Other benefits include the reduced maintenance costs that come with cloud deployment, enhanced employee experiences supported by self-serve functionality, and reduced compliance risk across applicable jurisdictions. In choosing an HRIS provider, SMBs should consider the size of their business, the migration of any existing HR applications, and data security or compliance requirements based on business location. HCM functionality, in terms of more advanced analytics and experience-based functionality, is out of scope for this report but may be a future requirement as SMBs grow into larger enterprises.

This GigaOm Key Criteria report details the capabilities (table stakes, key criteria, and emerging technologies) and evaluation metrics for selecting an effective HRIS. The companion GigaOm Radar report identifies vendors and products that excel in those capabilities and metrics. Together, these reports provide an overview of the category and its underlying technology, identify leading HRISs for SMBs, and help decision-makers evaluate these solutions so they can make a more informed investment decision.

How to Read this Report

This GigaOm report is one of a series of documents that helps IT organizations assess competing solutions in the context of well-defined features and criteria. For a fuller understanding, consider reviewing the following reports:

Key Criteria report: A detailed market sector analysis that assesses the impact that key product features and criteria have on top-line solution characteristics—such as scalability, performance, and TCO—that drive purchase decisions.

GigaOm Radar report: A forward-looking analysis that plots the relative value and progression of vendor solutions along multiple axes based on strategy and execution. The Radar report includes a breakdown of each vendor’s offering in the sector.

Solution Profile: An in-depth vendor analysis that builds on the framework developed in the Key Criteria and Radar reports to assess a company’s engagement within a technology sector. This analysis includes forward-looking guidance around both strategy and product.

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