When should a startup consider using a human resources information system (HRIS) for talent management? The sooner the better! As with any key business system, automation should start as soon as possible.

Currently, many affordable and scalable options exist for startups and small businesses that address human resources (HR) and payroll requirements.

Your HRIS: What to consider

The following considerations will guide your startup in for a choosing an HRIS.

Step 1: Determine your list of criteria for evaluating the prospective products. For example, consider if you need the HRIS to offer:

  • Ease of use
  • Data security
  • Cost-effectiveness
  • Canadian content
  • Management and employee access
  • Compatibility with your information technology (IT) infrastructure and resources
  • Features for multiple sites and users
  • A bilingual interface
  • Scalability
  • Technical support (and what level)
  • Customization (and to what extent)
  • Ability to generate automated basic and custom reports
  • Tracking of assets (e.g., computers, cell phones, desks)
  • In-house payroll processing or an automated interface to an outsourced payroll provider
  • In-house benefits processing or an automated interface to an outsourced benefits provider

Step 2: Document what types of HR data you need to manage. This may include:

  • Employee data (e.g., identification number, name, contact details, emergency contacts)
  • Headcount management (i.e., tracks employee headcount for finance, HR, executive management)
  • Job information (job title, job description, job level)
  • Compensation data management (e.g., salary grade and range, related market data)
  • For an in-house payroll system: Payroll deductions, income tax information
  • For an in-house benefits system: Benefits data (e.g., types of coverage for health, dental and life insurance)
  • Time and attendance (tracks absenteeism, including vacation, sick leaves and other leaves)
  • Basic performance management data (including performance rating, performance review date[s])
  • Employee training

Step 3: Add your wish list of requirements for the HRIS. For example, decide if you wish the HRIS to offer:

Step 4: Do your research. Make sure you:

  • Contact at least three to five potential HRIS suppliers
  • Request referrals from businesses similar to yours (industry, size)
  • Explore online human resource forums for supplier recommendations
  • Ask your network contacts for recommendations
  • Ask for on-site demonstrations
  • Have a technical employee or contractor do a technical evaluation

Step 5: Conduct your evaluation. Create a chart (matrix) listing the evaluation criteria from Step 1 and each prospective product’s features. Compare the pros and cons of each talent management system. Highlight any critical elements that are missing from this list.

Step 6: Review the costs for each HRIS. Weigh the following:

  • Purchase cost, if any
  • Monthly fee and levels of payments (this may be tied to your number of employees)
  • Customization costs
  • Costs of additional modules
  • Implementation and/or training costs
  • Annual support and maintenance costs
  • Other related costs you would incur to adopt this HRIS (e.g., hardware)

Although your HRIS evaluation can take several weeks to complete, it is well worth it. Your employees are your most important asset, and the organization and automation of employee data should be at your fingertips.