Choosing the Right HR System: A Step-by-Step Guide (Part 1)

The search for a perfect HR system can be overwhelming and, unfortunately, many of us have had to work with systems that don’t meet the needs of the organization. Every vendor promises that their product revolutionizes your work environment, enhances employee satisfaction, and streamlines operations (did we also mention it’s built on AI?). Cutting through the noise and selecting a system that genuinely creates value for the organization is critical. In this article series, I share my insights on the HR system selection process, guiding you through this complex landscape and avoiding common pitfalls. Although I can’t provide all the answers as the needs of each organization are unique, I can guide you in asking the right questions to make an informed decision.

Before evaluating new HR systems, there are seven steps you should take to decide if a new system is needed and, if so, create the criteria by which you will evaluate the myriad available options. These steps will lead you from a broad understanding of your organization’s goals to a focused area of evaluation:

Step 1 – Define Your Objectives and Requirements

Step 2 – Conduct a System Audit

Step 3 – Identify Gaps and Redundancies

Step 4 – Determine an Area of Focus

Step 5 – Process Map that Area of Focus

Step 6 – Build Requirements for that Area of Focus

Step 7 – Evaluate Current Vendor (If applicable)

In this post, I will focus on the first two steps and continue in future posts.

Step 1: Define Your Objectives

Before jumping into the system selection process, it is important to understand your organization’s direction and the value your HR group should provide. If it exists, look at your company’s 5-year plan. If not, think about what the future needs are. For many companies, hiring skilled employees in trades, IT, and supply chain are key to success. Globalization and the increased reliance on technology are always going to be needed for the future.

Additionally, document the unique needs and requirements of your organization. For example, in Higher Education, you have short-term contracts, work study, retirees, and faculty relations that all present administrative and compliance complexities that need to be managed in a system. It is important that you document and understand these requirements as they will come into play later in the process when you are finding gaps.

To highlight this process, we will use a fictitious company, Wizard Technologies, Inc. Wizard Technologies is implementing a digitalization strategy to cut paper processes and enhance employee and customer facing systems. As the HR Director, you know that this will require many changes within HR processes as your organization still relies heavily on paper. In addition, your company is going to need to hire specialized IT talent to support these efforts which will fall on HR to find and recruit those individuals.

What about the unique requirements for your industry? Let’s say you are a software company that has government contracts. The following requirements could apply:

  • You understand that many of your employees are working out of state and possibly even out of the country. Any systems you implement will need to be able to accommodate this from both a functionality and a compliance perspective. For example, employees in the EU fall under GDPR requirements.
  • As a government contractor, you fall under OFCCP which dictates the type of data you need to collect and report on for your employees.

With these requirements in hand, we can move on to Step 2: Conduct an inventory of your current HR systems.

Step 2: Conduct a Thorough Inventory

Take stock of your current HR technology tools and systems. List all the solutions used across the HR function, including applicant tracking systems, onboarding platforms, learning management systems, payroll software, and employee engagement tools. Be sure to include any integrations and customizations that are unique to your organization.

This can be as detailed or as simple as you want, but I would recommend, at the minimum, creating a visual map of the systems and how they interact along with a supporting appendix document that details what each of these systems do, the data fields they hold, and what individuals or groups support these systems. Below is an example of an HR system map for our fictional company:

Here is what an excerpt from the appendix could look like for System A in our fictional company:

We have each of the systems documented and the processes they support. We also note where they take place in the employee life cycle and any points where systems feed data to each other. In this example, System B is used for both recruiting and talent management. You can see how data feeds from this into employee files and then into the HRIS. Data from background checks are also entered into the Applicant Tracking System. Below is what the supporting Appendix could look like for System B:

System B

Vendor: Acme HR Systems

Purpose: Manages the Recruiting (ATS), Learning, Succession, and Performance functions

Annual Cost: $350,000 ($100,00 for recruiting, $150, 000 for learning, $100,000 for performance and succession)

Contract renews: January 1, 2024

System Owner: HRIS


  • Daily feed to HRIS (System D)

Field dictionary (ATS):

FieldIncoming SourceOutgoing Source
Employee NameEntered by applicantN/A
AddressEntered by applicantN/A

Field dictionary (LMS):

FieldIncoming SourceOutgoing Source
Employee IDSystem DN/A
Employee NameSystem DN/A
Employee PositionSystem DN/A

While it may not be necessary to document all of the data fields at this point, I recommend that every HR department puts together an appendix like this at some point as it is invaluable for audits, answering questions, troubleshooting issues, and aiding with process improvement. On the flip side, it is very easy to get bogged down or overwhelmed with tasks like this, especially with an unending load of urgent tasks and demands. As a team, you will need to decide on a path forward that balances data with the need for forward progress.

With an identification of your goals and a map of what you currently have available, you will be able to overlay those and decide where there are gaps that your team will need to focus on, including possible technology systems. In part 2 of this series, I will focus on identifying those gaps and determining where to focus your team’s attention.


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