What 1,361 HRIS projects tell us about selecting HRIS (2020 HRIS report)

Software Path

HRIS selection can be scary.

Your HR department touches every part of your business - every employee interacts with them in some way, which means selecting a system impacts every person in your business somehow.

What makes it worse is the lack of information surrounding HRIS cost, deployment methods, and the time it takes to choose a system.

We’ve gathered and analyzed data from 1,361 selection projects, active in the last year, to provide an accurate view of what you can expect during an HRIS selection project. We’ve spoken with HR stakeholders and project managers to find out the average cost of HRIS software, hosting preferences, and project timeframes for selecting a system in our 2020 HRIS report.

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Here is a summary of some of our key findings:

1. The average budget per user for HRIS software is $7,542.

The most common question asked about HRIS software is probably: how much does an HRIS cost?

You can expect to pay around $7,542 on each user of your system according to our research from the past five years. This works out at approximately $125 per user per month. The average budget per user is taken from businesses of all sizes over a five year period, with each user being an employee with administrative privileges responsible for the HRIS records and maintenance. 

There is a significant increase in the budget per user when the business size increases beyond 50 employees. Larger companies may be more aware of potential ‘hidden’ lifecycle costs involved in software implementation and, as a result, may have a larger budget.

2. 88% of companies were considering a cloud-based HRIS.

Cloud-hosted HRIS dominated as the preferred deployment method with 88% of all businesses considering a solution in the cloud.

Interestingly, the number of companies considering an on-premise solution has actually risen since our 2019 project report. Perhaps the most surprising data showed that companies with over 250 employees had the highest preference for an on-premise solution, with almost 20% of businesses looking for solutions with this deployment method. 

A significant portion of those surveyed did not have a preference for hosting method, suggesting that the deployment method has little impact on their HRIS selection.

3. On average, companies spend 16 weeks selecting HRIS.

Selecting an HRIS is a big deal, so it’s not surprising that companies spend, on average, 16 weeks choosing their system.

There was little variance in selection time between companies with 0 to 49 employees and companies with 50 to 249 employees. However, our data showed a large increase in selection time for companies with more than 250 employees, with their timeframe being 5 weeks longer than comparatively smaller companies. As HR interacts with all aspects of the business, it’s possible that this longer selection period is to consult with stakeholders across many departments.

4. The top reason for implementing HRIS was to increase efficiency.

The most popular reason for implementing HRIS across businesses of all sizes was to increase efficiency, closely followed by gaining greater functionality.

The drive for improved HRIS functionality is not surprising, with businesses looking to improve and streamline administrative HR processes allowing their HR department to focus on more strategic areas. We noticed the same trend in our 2019 project report.

Interestingly, supporting growth was the third most popular reason for implementing HRIS, with almost 20% of businesses citing this as their main objective. 

Read more interesting statistics and gain a full overview of the HRIS market by downloading the full Software Path 2020 HRIS Software Project Report.

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