Do You Really Need an HRIS? Here's How to Decide

If you're running a business and managing a team, chances are you've come across the term HRIS. You might have even found yourself asking, “Do I really need one of those?” With more options entering the market and your existing systems constantly evolving, it’s a question worth exploring.

Before you start shopping around or get swayed by flashy features, let’s break down what an HRIS actually is, what it can do, and whether it’s the right fit for your business right now.

What Even Is an HRIS?

HRIS stands for Human Resources Information System. It's a fancy way of saying a piece of software that helps you manage all the admin that comes with employing people.

Think of it as a digital filing cabinet combined with automation tools that can remind you when staff anniversaries are coming up, store documents like contracts or licences, and track performance reviews or training requirements.

It’s not the same as payroll software, time sheeting tools or workflow systems, though many HRIS options integrate with those platforms. At its core, it helps centralise and streamline people-related processes and reduce the admin burden that tends to stack up over time.

Why It’s Such a Hot Topic

There are a few reasons HRIS has become a popular buzzword recently.

Firstly, there are a lot of new providers entering the market, giving business owners more choice than ever.

Secondly, existing software you’re already using might now offer HR add-ons. Your payroll or project management tool might suddenly be advertising a brand-new HR module, and you’re left wondering if it’s time to upgrade.

There’s also a growing desire among business owners to tidy up the backend of their operations, especially as teams grow or become more remote. HRIS promises to bring order to the chaos, but is it always worth the effort?

Let’s find out.

How to Choose the Right One (Or If You Should at All)

The truth is, not every business needs an HRIS. In fact, if you employ less than 50 staff you don’t.

But for many, it can become a game changer. Here are the key things to consider before making a move.

1. Be Clear on What You Actually Need

Before diving into demos and comparing price points, take a step back. What do you actually need the system to do?

Is it document storage, performance tracking, reminders for certifications, or something else?

Just as important, what don’t you need? Bigger systems often come packed with features designed for large corporates, and while they look impressive, they might just overcomplicate things for a small business. Make a list of must-haves and nice-to-haves, and stick to it when evaluating options.

2. Review Your Existing Tech Stack

Look at what tools you’re already using. Could they do more than you realise? Are there extensions or add-ons available that would fill the gap without needing to introduce something completely new?

You might already be paying for something that offers HRIS-like features, or you could unlock them by upgrading your current system.

3. Integration Is Key

A common mistake is choosing a platform that doesn’t integrate well with the rest of your business tools. If you run payroll through Xero, for example, your HRIS needs to talk to it. Otherwise, you’ll be creating more work, not less.

Be wary of systems that claim they can integrate but require manual workarounds to make it happen. Ask about seamless integrations, not just technical possibilities.

4. Think Long Term

Changing systems is no small task, so make sure you’re choosing something that will grow with your business. Think about where you are now and where you’ll be in one to two years.

If you currently have 50 staff but expect to hit 200 within the next year, you’ll need a solution that can scale with you. Implementing something now that becomes obsolete in 12 months will just double your workload.

5. Who’s Going to Manage It?

This one gets overlooked far too often. Who’s actually going to implement and manage the system?

An HRIS doesn’t run itself. Someone in your business needs to lead the rollout, make sure data is migrated properly, and oversee day-to-day use. Without that, it’s just another tool that gathers digital dust. If you or your team don’t have the time or know-how, you may need to factor in extra support or consultancy costs.

6. Check Support and Usability

Does the provider offer decent support? Can you access local help or is everything routed through chatbots or international call centres?

It’s also worth asking for a demo or trial version so you can see if the navigation feels intuitive. If the software feels clunky or frustrating from the outset, your team won’t use it. That’s wasted time and money.

7. Is There an Industry-Specific Option?

Some providers tailor their software to particular industries. If you’re in construction, for example, you might find an HRIS that tracks trade licences and safety certificates automatically. That kind of feature can be a lifesaver and save you time down the line.

You don’t need to go with the biggest or flashiest brand. In fact, many of the more niche or lower-profile systems may be a better fit.

So, Do You Actually Need One?

The short answer? It depends.

Ask yourself the following:

• How are you currently managing employee information? If it’s working and not creating stress, maybe you don’t need a new system right now.
• How many team members do you have? If you’re under five and things feel under control, a spreadsheet and cloud storage might be enough. If you have less than 30 staff, likelihood is something you have in place already can do the job. If you have 50 + staff, it might be time.
• Are you growing quickly? If you're scaling up and expect to onboard a lot of people soon, investing now can save you a massive headache later.
• Are you constantly chasing paperwork or reminders? If licences, certifications, or contract dates are falling through the cracks, it’s probably time to automate.
• Do you have the budget and resources to implement and manage it? If not, hold off or look at lighter options until you’re ready.

There’s no legal requirement to have an HRIS in your business, but it can absolutely help you stay compliant, reduce manual errors, and streamline processes.

If you love a good system and enjoy running a tight ship, a well-integrated HRIS might be your new favourite tool. But only if you’re going to actually use it.

An Invitation
If you’d like to connect with other business owners, leaders and managers, I’d love for you to join us inside our free Facebook Group where you can connect with other like minded business owners, leaders and managers to discuss all things HR: https://www.facebook.com/groups/hrsupportaustralia