HRIS vs HRMS vs HCM – Exploring the Differences Between HR Software
8min read / 7 Jul 2022
Platforms, tools, and systems that help manage the work of an HR department are essential in every company. HRIS, HCM, and HRMS are all excellent HR technologies that companies use for managing recruitment and human resources processes, as well as every other type of people-related activities.
HRIS, HCM, and HRMS are truly useful, but what do they actually mean? How and when to use them? And what if the difference between them?
Exploring the Differences Between HR Software
In this article, we will learn what each of these terms means and why they are beneficial for any company.
Here’s what you’ll learn in this article:
- HRIS meaning: Human Resource Information System
- HCM: Human Capital Management
- HRMS: Human Resource Management System
- The difference between an HRIS and HRMS system
- The difference between an HRMS and an HCM system
- HRIS vs. HRMS vs. HCM
We will cover these details and help you choose the right one based on your business needs.
The 4 Top Benefits of using HR software
Employees are the driving force of a company. Managing the recruitment, keeping a database, and continuously improving the company culture based on the team’s feedback is essential in order to build a well-working organization with motivated employees.
Human resources affect every department in a company, and HR software helps to improve all processes. There are many benefits of implementing HR software in your workplace, and here are five of the main ones.
The most essential benefit that HR software can provide is productivity within the HR department. It helps to automate a huge number of HR functions, such as payroll, benefits administration, absence management, and compensation systems. By doing so, the HR team is able to focus more on other issues like attracting new candidates and employee training strategies.
2. Improving employee experience
A user-friendly and well-designed human resources software helps to engage with employees by providing a clear and transparent system that they can also use. It gives your organization the possibility of avoiding using dozens of different software, as everything is in one place. A structured, smooth, and flexible system improves and experience of the employees in the company.
HR systems are cloud-based software that protects the precious data of your employees and provides access from anywhere using your computer or device. Every kind of document can be managed in a human resource platform from knowing who reads what to reducing paperwork.
4. Reduced Errors
As HR software provides the possibility of automating most activities, the probability of making errors is less. With HR software, there are no misplaced decimal points or misspelled names. A human resource software automates the most common processes such as payroll information.
Meaning of HRIS: Human Resource Information System
A A human resource information system (HRIS) is a software or an online platform that helps manage most human resources operations of a company, with a focus on people, procedures, and policies.
An HRIS is a data-driven system, that houses master employee data and provides digestible information and insights to the organization. Human resource information systems have an employee database at their center with functional tools to be applied to them.
HRIS is focused on personnel tracking and recruiting but also tracks employee working times and monitors workflows to help the organizations’ development process.
The main features of a human resource information system:
- Database management (employee work permit information and tax data)
- Time and labor management
- Absence management
- Benefits administration and management
- Self-service portals and the possibility of updating personal information
- Employee interface
- Talent acquisition and retention
- Training and development
- Applicant tracking options
- Automating routine HR actions (holiday requests, review scheduling, feedback collecting, training tracking, performance, and development)
Meaning of HCM: Human Capital Management
Human capital management (HCM) refers to the management of employees in an organization. This type of system suite includes all the features offered by HRIS and adds talent management capabilities to it.
A human capital management system typically provides tools for talent acquisition, talent management, and talent organization to provide ways to better manage HR actions from onboarding to performance tracking, compensation to offboarding.
It holds together different features and tools such as payroll documents, timesheets, productivity analytics – making it easier for companies to organize and track everything employee-related. All in all, HCM can be tailored to each organization to support its activities and actions. Human capital management can also be considered as a strategic approach that contains all the practices, processes, and systems used for people management and development.
The main tools available in an HCM system are:
- Covering the entire recruitment process
- Supporting and managing online recruitment
- Applicant tracking system (ATS)
- Onboarding procedure
About applicant tracking systems, their benefits, and main features, read our previous article here.
- Time and attendance tracking
- Performance management
- Building and developing company culture
- Managing and optimizing the employee life cycle
- Career pathing
- Competency tracking
- Succession planning
- Learning and development, training
- Employee engagement features.
Meaning of HRMS: Human Resource Management System
Human Resource Management Systems (HRMS) typically offer all the features of an HRIS and also include the capabilities of an HCM. When investing in an HRMS system, you can expect to access everything included in an HRIS and HCM, plus a payroll system and some tools for more efficient labor management.
An HRMS includes the following features:
- Most common features and capabilities of an HRIS and HCM systems
- Automated payroll processing and wage calculations
- Time management
- Labor management
By having a well-built process for time and labor management, organizations can increase their productivity and efficiency. So an HRMS is the most complex software of every HR tool.
HRIS VS. HRMS: What is the difference?
HRIS and HRMS systems are very similar in function and means. Most of their features and modules are the same – such as personnel tracking, absence management, training and development management tools, workflows, benefits administration, and recruiting tools.
Both human resource information systems and human resource management systems automate HR tasks and processes and functions as a summarizing platform for workforce information.
An HRIS or HRMS collects master employee data, such as names, contact details, and social security numbers. These are essential to be collected and safely stored together with payrolls and benefits administration. In short, any HRMS or HRIS serves as the core of HR and workforce data management.
The main difference between the two software is the complexity of the tools they provide. HRIS is more basic, focusing on the most essential details while HRMS is a bit more complex and extended. An HRMS system usually includes all features of an HRIS with additional tools and features. While an HRIS system might be an ideal pick for a smaller company, a modern, well-designed, and user-friendly HRMS incorporates every kind of HR-related software and application, making a more effective flow regarding the HR actions.
What is the difference between an HRMS and HCM?
HRMS is a tool that supports HR actions in an organization by providing a clear and easy-to-use platform to manage recruitment, performance, and administrational tasks.
On the other hand, HCM refers to a management system that covers all HRIS tools and processes under its umbrella, offering a much more expansive functionality than HRIS or HRMS. HCM can also be considered as a strategic approach as it summarizes the combination of different HR software and tools to manage the entire employee life cycle, from developing talent pipelines for future recruitment to offboarding and pensions.
HRIS vs. HRMS vs. HCM
HRIS, HCM, and HRMS systems are very similar in their essence. The most important is that all of them deal with the human resource department, with the workforce or employees, and all related issues and concerns like employment, recruitment, orientation, training and development, payroll and benefits, performance analysis, and other work-related services to the employees.
HRIS and HRMS are the most similar, as they are both software with similar features, one including more complex features than the other. Compared to these, HCM is the most diverse, as it refers to a comprehensive HR software suit.
The borders between HRIS, HRMS, and HCM systems are weak, as many times people use these names as each others’ synonyms. So going through the features and benefits of software before investing in it is essential. The system you choose totally depends on your organization’s needs, size, and goals. Each software helps to be more efficient and productive.
What is more, a human resource management system not only helps your organization manage HR-related tasks but also provides a positive experience to your employees and candidates who’re just about to join your team. Each software provides an easily understandable and user platform that digitally supports the onboarding process and employee management.
Oorwin offers a comprehensive platform for all your recruitment and human resources need with timesheets and expenses analysis, assignment management, and document management. Try our 7 days trial today!
Frequently Asked Questions
Is HRMS the same as HRIS?
The short answer is no. While some HRIS systems provide functions like payroll and attendance, others offer enhanced capabilities such as performance management and reporting.
What is an example of HRIS?
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