Choose a human-resource information system

1. The constraint and what graduates it

Human resources is defined here as how you reduce the chance that employees and regulators sue you.

Item	At this stage (50 to 99 people)
The constraint	Employee information is kept in too many different places, and you have no data
To graduate	Set up a human resource information system (an HRIS)

At 50 to 99 people there is a lot of team, but you do not know the answers to basic questions. How is everybody doing, and how is everybody performing? Where did this person come from? Has that person been hired yet? Is that person onboarded, and when do they start? So you end up constantly pinging your team to find out what is going on: when is someone's birthday, has this person had a raise yet.

2. Customer relationship software for your team

Think of the HRIS as a customer relationship management system whose customers are your team. The applicant tracking system is the pipeline of people coming in; the HRIS is the long-term nurture of the people you already have.

A theme runs across this stage, it is pointed out. An applicant tracking system sorts people by their applications. An HRIS sorts the people inside the business. Information systems do the same for the information the business holds. At this size everything is disorganized and everyone is everywhere, and each of these puts in a system to categorize what is already happening in the business. To stay efficient, you have to make things easy for people.

3. What the system holds

What it holds, in the order given:

1. Employee records. The basics: each person's title, salary, benefits and performance reviews.
2. Payroll and benefits administration. Most of the time the HRIS integrates with your benefits, or actually comes with a benefits platform, so you have the two in one. That is called the ideal, and it is what is suggested. It automates payroll, tax calculations and benefits enrollment, all in one place.
3. Time and attendance. For hourly people, and for anyone taking paid time off or sick time: all of it is held in the system.
4. Recruitment and onboarding. A lot of the time the HRIS integrates with an applicant tracking system, or has one of its own built in, and it supports the onboarding and hiring workflows once you have a candidate in.
5. Performance management. The favorite piece in one practice here, and the main reason an HRIS was ever bought there, which was to monitor employees' goals, their performance reviews and their key performance indicators.

4. The piece the founder watches

All the other pieces are important, and you need somebody to run them, like a CFO or a controller. The last piece is the one you pay attention to yourself, in the view here, as the CEO or the founder of the company. In an HRIS you can usually:

• see the performance of every single department;
• run performance reviews inside the system, where people fill them out, so you can see who has filled one out and who has not, and how everyone is rated;
• run employee engagement surveys and performance review surveys;
• have everyone track their key performance indicators in one place.

In one practice here, this piece is always over-weighted when an HRIS is picked: a habit, as stated. The reason offered: ask what will make the company more money and drive its growth, and the answer is knowing how the people on the team perform. Before that practice had one, it was just guessing, going by what other people said, with no data to back up anything people said and nothing to measure whether things were getting better. If one team was underperforming, there was no way to tell whether its performance improved. Getting this in place gives you a holistic view.

Most of the time, it ends in a dashboard. It shows your team's performance and answers questions like these: how many sick days were taken this month; how do performance and employee engagement look this month; how many new people came in this month; how much is being spent on payroll this month. All the information about your team is in one place, and that is called life-changing.

5. Choose one, step by step

These are run through quickly, in this order:

1. Think about your business needs. The need just described, seeing performance, is likely the hardest one for a company at this point. Define any specific requirements from your growth rate and from the type of business you are. Are you in person or remote? It will be a little different either way: a remote company has people living all over, while an in-person one has everyone in one central location.
2. Look at your options. Find HRIS solutions by their reputation, their features, user reviews, and whether they fit your growth needs. As with an applicant tracking system, pick a system you can grow with. You do not want to be somebody's biggest customer, because you will outgrow the tool very fast. That mistake was made in one practice here: loving the specialized support that came with being one of the biggest customers, then finding the tool was built for small companies, so that the growing company was punished when the tool stopped working for it. Be very careful that you can grow into it.
3. Check the integrations. Make sure it works with the tools you already use: your payroll, your accounting, your applicant tracking system.
4. Involve key stakeholders. This is where, it is said, everyone gets it wrong: they pick platforms in the dark, without bringing anybody in. Most platforms work; the trouble is that most people do not work with them, because the right stakeholders were never looped into the decision early enough to give feedback you could choose by. At the end of the day you are getting a platform like this so the team will use it too, and you will not get proper data unless you get proper input from the team. Whom to involve: in the view here, your executives and some of your directors. Have them test it, try it and use a demo. That is not decision by committee, which is not how it is done in one practice here. But if 85 percent of them say it is bad, it is going to be hard for them to use; if only 30 percent say so, it probably means it is a good platform.
5. Test the system. A lot of the times people pick a system and hope it works when they sign up with it. Instead, run trial runs and pilot tests, or get a trial, before you sign up and commit for a year. A system like this could cost anywhere between roughly $50,000 and $100,000 a year, so understand that it is a big commitment for the business. It will either help you grow and make growing easy, or make growing really hard.

6. Negotiate before you sign

At this point you are becoming an enterprise customer, at the low end of that for now. It is very standard not to take a vendor's first offer. You can go back and forth several times on how the rates are charged, when they start, whether there are escalations, and what the fixed increases are: all of it can be negotiated. Maybe this one thing alone will save you $25,000 a year, so please do it.

7. Put the culture into operation

The theme for human resources at this stage: when it comes to people, get the right tools, the ones that let you operationalize the culture. It sounds lame, it is conceded. The reason given is that a lot of people's cultures start to collapse at around 50 to 100 people because the culture happened by accident, not by intention.

So operationalize what already works. What is bringing you great candidates now? What makes you perform well now? If you measure it and can see which actions affect the results, you can keep taking those actions as you grow.

8. Where this sits

• The stage as a whole, function by function: SOP 164 — Categorize the business at fifty to ninety-nine people.
• Picking a benefits provider and plan, and why a usable benefits portal matters, belongs to SOP 159 — Select and roll out employee benefits.
• A dashboard of the money, department by department, is built on SOP 154 — Get granular financial data, section 7. The dashboard on this page is of the team.
• The applicant tracking system this stage also puts in is the subject of SOP 166 — Track candidates in one system and use specialist recruiters.
• What human resources adds once the business passes 100 people, a performance management tool among it: SOP 168, section 8.

9. What this page does not decide for you

• Which system to buy. No product is named. Not established on this page.
• Who leads the negotiation. Not established on this page.
• Where between 30 and 85 percent a platform should be turned down. The 85 and 30 percent figures are examples, not a cut-off. This page gives no figure for the cut-off.
• The low end of the yearly cost. It appears as "50" beside "$100,000"; this page reads it as $50,000.

10. What this page does not cover

Employment law and payroll tax rules are not covered on this page.