How much does HRIS software cost? (2021 edition)

Software Path

Our HRIS report found, on average, companies spend approximately $145 per user per month on their system.

This is a great starting point for calculating the cost of HRIS, but there are few more factors to consider when working out your budget, and, ultimately, the worth of implementing an HRIS in your business.

HRIS can do a lot for an organization. It can save a lot of money, reduce administrative HR burdens, and improve employee retention.

It can also be costly to implement

But, how much exactly should you be spending on your HRIS system?

We’re going to walk through calculating the HRIS cost for Company X, and explain some of the key areas of HRIS ROI that you should look out for when implementing.

Using the data from our HRIS report, we’re able to calculate that Company X will require 10 employees to be listed as users of their HR software. Users, in this case, refer to employees who will have administrative privileges and are responsible for managing and maintaining the system. These employees will likely be in a dedicated HR team in a company of this size.

Determining the number of users of an HRIS is an important step in calculating your system cost as most HR software will be calculated on a cost per user pricing model.

The average cost for an HRIS system is $8,750 per user over a five year period or $145 per user per month. For larger companies, this cost increases to $11,200 per user over five years, breaking down to $187 per user per month. 

We’ve found that larger companies are spending more per user on their HRIS system. Interestingly, larger companies usually benefit from economies of scale meaning their cost per user goes down, despite their overall system cost being higher. However, our research has shown the opposite trend for HRIS systems. 

It’s possible that larger businesses need greater scope in terms of features and functionality requirements, resulting in a higher cost.