HR Software: What is the difference between HRIS, HCM, and HRMS
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difference between HRIS, HCM, and HRMS

HR Software: What is the difference between HRIS, HCM, and HRMS

You have just started exploring HR Software and are faced with the terms HCM, HRIS & HRMS. Granted, it’s confusing, and you’re probably saying to yourself, they all look the same. Perhaps on the surface, they do the same thing and tick the functional boxes, but there are subtle differences in features and benefits to your organisation.

Let’s take a closer look at the main differences between the underlying HR technology, offering you a template to evaluate the best HR Technology solution for you.

Human Resource Information System (HRIS)

A Human resource information system allows organisations and their HR teams to focus on automating HR transactions. It features the tracking, managing, and automation of core HR functions powered by the organisational structure and employee databases. It will also feature basic HR analytics and reporting.

Common transactions include:

  • Core HR changes, change name, change address
  • Change requests of any kind
  • Employee Lifecycle Change
  • Employee Database records
  • Employee Self Service
  • Applicant tracking
  • Onboarding, Offboarding
  • Payroll functions, leave requests, leave projections
  • Timesheets

The value proposition of an HRIS System is maximising success via automation of core HR transactions in employee acquisition, lifecycle, performance, development, and retention.

Human Capital Management (HCM)

A Human Capital Management system takes the next step focusing on your employees as a strategic asset. HCM takes an employee-centric view of a company’s human resources and embraces strategic and transactional, and technological elements required to address the full spectrum of HR activities.

Common HCM functions include:

  • Full employee lifecycle and planning
  • Onboardings & offboarding
  • Performance Review
  • Recruitment
  • Salary Reviews
  • Learning and development
  • Succession Planning
  • Strong business rules-driven workflow
  • Engagement
  • Recognition
  • Workforce planning

Reporting and analytics go to the next level allowing deeper insight and analysis to make informed data-driven strategic decisions faster. Given the holistic nature of the system, the modules are integrated so that data from one module drives success in another module. A good example of this is the employee’s performance review rating is used as the driver for recommended salary increases. Another example is using the position table to define a skill gap and suggest driving training. Integrated modules can also provide deeper insights and enhance your ability to make data-driven strategic decisions across your entire human capital program.

Human Resource Management System (HRMS)

HRMS software puts all the functions, payroll, HR, workforce management into one single fully integrated suite, where HR teams can manage all transactions via workflow, perform data analysis, and generate essential reports.

With an HRMS, employees can complete self-service tasks linked to their personal information, as well as rostering & timesheets, shifting the transaction elements away from HR. This gives a single, source of truth for strategic focus.

Additionally, many HRMS platforms are built for configuration and customisations to meet specific organisational, and end-user needs, optimising workflows, and other processes.

Functionality and processes include:

  • Payroll management
  • Workforce Management
  • Rostering
  • Work rule interpretation
  • New employee recruitment and onboarding
  • Employee Lifecycle
  • Performance reviews
  • Salary Review & benchmarking
  • Benefits administration
  • Learning and development
  • Succession Planning
  • Employee scheduling and self-service

 

For companies that want to leverage their human capital assets for maximum impact, the right technology strategy is essential. Choosing an integrated HCM/HRMS system over a single function HRIS Platform offers access to high-quality data while potentially reducing transactional workloads. The key is determining which type of platform best suits your company’s specific human resource needs.

To ensure you’re procuring the right system for your business, it’s necessary to conduct vendor research and due diligence. The point of this research is to help you understand what software vendors are describing as they present potential solutions. The bottom line is not all HRMS systems are alike.

 

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Ari Kopoulos
ari@employeeconnect.com

CEO at EmployeeConnect