Hir is a short word for "His/Her" or "Him/Her". Instead of writing the awkward sentence "Where is his/her file?" we write "Where is hir file?". Many other languages (such as Cantonese, Chinese and French) have a word that means "him/her" or "she/he". There is no easy way to shorten (s)he, so I accept "(s)he" as a good enough construct. The word "it" is unfortunately seen as too impersonal to be used for humans of unknown or irrelevent gender, which is why the proposals for a gender-neutral pronoun have been one of the most common elements of English reform. Most the time, the use of the word "they" in a singular way will suffice but sometimes this causes ambiguity if, in context, it might be referring to a plural number of other people. There are many wild suggestions out there to fix these problems, hir is one of the most textually aesthetic. Its drawback is that there is a tendency to pronounce it exactly the same as "her".