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 708 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 2021 HRIS report.
Quick jump to:
- How much does an HRIS cost?
- Are companies selecting an on-premise of cloud HRIS?
- How long does it take to select an HRIS?
- Why do people select an HRIS?
- What is the most popular HRIS system?
Here is a summary of some of our key findings:
1. The average budget per user for HRIS software is $8,750.
The most common question asked about HRIS software is probably: how much does an HRIS cost?
You can expect to pay around $8,750 on each user of your system according to our research from the past five years. This works out at approximately $145 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.
Larger companies have a much smaller budget per user compared to smaller companies. This is likely due to economies of scale benefiting large companies who may have more users for their system compared to smaller companies.
2. 98% of companies were considering a cloud-based HRIS.
Cloud-hosted HRIS still dominated as the preferred deployment method with 98% of all businesses considering a solution in the cloud.
Interestingly, the number of companies considering an on-premise solution has actually risen since our 2020 project report. This theme was clear across businesses of all sizes, with less than 2% of companies considering an on-premise solution.
Over 70% of all businesses were only considering a cloud-based solution.
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 an increase in selection time for companies with more than 250 employees, with their timeframe being 4 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 gain greater functionality.
The most popular reason for implementing HRIS across businesses of all sizes was to gain greater functionality with almost 25% of businesses citing this as their main goal for implementing.
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 2020 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.
5.The most popular HRIS being shortlisted were BambooHR and Workday
Over 10% of companies were comparing Bamboo HR or Workday during the selection process for their new HRIS.
Other big name HRIS software were being compared including Kronos, Paycor, Sage, and Oracle.
Read more interesting statistics and gain a full overview of the HRIS market by downloading the full Software Path 2021 HRIS Software Project Report.