HRMS vs HCM vs HRIS - What s the Difference?

Human Resource Management System (HRMS), Human Capital Management (HCM), and Human Resource Information Systems (HRIS) seem similar phenomena but are different. WebHR contents help you differentiate between confusing concepts.

HRM is the right manpower deployment at the right place and right time. When HR was valued as inimitable vital organizational capital, it was termed HCM. While HRIS is the information system for managing HR functions.   

In the last century, humans who worked under administration were commonly called workers, and the HR functions were known as personnel management. With the development of diversified fields of specialization, humans were termed as an important organizational resource, and personnel management enhanced its scope into human resource management (management functional aspect) and human resource development (human training side).

With the ever-increasing scope of information technology, HR information systems too developed for performing automated HR functions on a routine basis.     

HRMS (Human Resource Management Software)

Human Resource Management Software (HRMS) is an integrated suite of tools designed to streamline and automate core HR functions. It enables organizations to manage employee data, payroll, recruitment, benefits, and more, all in one place. HRMS encompasses various modules such as employee information management, attendance tracking, payroll processing, performance evaluation, and benefits administration.

With HRMS, companies can efficiently handle employee lifecycle processes, from hiring to retirement. It also supports compliance management by keeping track of labor laws, taxes, and other regulatory requirements. Additionally, HRMS enhances decision-making through data analytics, offering insights into workforce trends, productivity, and performance metrics.

Although HRMS increases efficiency and reduces manual effort, it cannot replicate the personal touch or intuition required in managing employee well-being and development. It serves as a tool to assist HR professionals but does not replace the human element in HR practices.

HCM (Human Capital Management)

Human capital management (HCM) is a series of activities that a firm employs to hire, retain, grow, and optimize employees to maximize their contribution to the company. HCM is the capitalization of human functions such as Training and Development, Performance Management, and Strategic HR Management; not only this, but it also includes HR Functions management. HCM is optimizing the return on investment in organizations.

A school of thought believes that strategic planning is an added advantage of HCM through capitalization on human resources. Subsequently, HCM focuses on knowledge management, leadership development, learning capacity building, employee engagement, and work optimization.

HRIS (Human Resources Information Systems)

Human resources information systems (HRIS) are the automated systems installed and run in organizations for routine HR tasks like attendance, assignments, daily diaries, routine tasks management, socialization of HR, climate surveys (as per employee experiences, what employees think of the organization they are working for), routine research and development, absent management, employees management, tasks trace administration, network administration, social networking (connectivity of employees to employees, and employee with the employer via internet or intranet), regular hiring patterns, software modules for rewarding employees, yearly budgeting, training and development, and much more.

However, through HRIS, one may imitate the hi-tech systems, but an employee’s skills, knowledge, experiences, and very innate capabilities can never be copied by any organization!

What is HRIS Software?

Human resources information systems (HRIS) are software platforms facilitating employees and the employer for employee data stored electronically, in replacement of papers and long data sheets entry and management. HRIS is a most modern web-based or browser-based solution.

You can easily input the full particulars of your employees in terms of their: personal details, employment records, visa status, legal requirements, retiring insurance, dependents, and more. Not only this but employees can socialize, generate daily reports, assign daily tasks to teams, arrange meetings, upload the agenda, rules, and regulations updated from time to time, follow minutes of meetings, connect to colleagues, etc.   

Feature of HRIS Software

Applicant tracking system: Your HR can save and retrieve talent information from time to time for your recruitment made easy. Applicants (to-be employees) can track their recruitment stage during the action of selection by the employers and that too easily and online!

Absence Management: Employers can manage the attendance systems through HRIS and know about the status of available leaves at employees’ credit and manage the same for employees’ facilitation of leave management and the employer’s perspective of absent management. Too, the number of absences an employee has made is tracked.

Workflows: HRIS generates your HR routine reports, by which your HR can make important strategic decisions.

Learning Management System: Through the learning management system (LMS), employees learn by connecting online to the available resources, tutorials, guides, learning modules, online certifications, post-COVID-19 remote working, etc. LMS allows busy HR professionals to work on automated systems and focus cum invest their time in strategic tasks importantly.

Benefits Administration: Employers can track employee performance through HRIS and make benefits available and extendable for their worthy workforce. The system generates for your HR the employee updates when you need to offer them benefits on a routine basis.

Self-Service: The excellent feature of self-service has made things easy for both the employees and the employer. To put data in by self-service and edit, as per limited rights given by the network administrators, is one of the important features of HRIS.

Compensation Management: Among regular management of the working shifts and payroll, employers are facilitated looking back at the track records for the previous employees and workers paid for certain positions or jobs (that is called the worth of a job in HR) and offering existing and to-be employees the wage strictures as per the required status quo (keeping in view the online available inflation rates too), is much helped through by HRIS.

Employee Database: Last but not least, among other benefits and features, is the employee database. HRIS has made it easy not to keep and uptake heavy files and folders with many papers therein and finding for a particular data revolving pages and pages, has now been replaced by easy control F key or any other relevant feature therein available in HRIS. What is more, the data is easily input, saved as secure, and tracked within absolutely no time.  

What is HCM Software?

HCM stands for human capital management and is the most modern web-based or browser-based solution like HRIS or HRMS, making employee information easily accessible. The electronic sign, schedules, and training automation are key features of HCM software.

Feature of HCM Software

HCM Software tracks your employees throughout their employment lifecycle. It automates training and development programs and incorporates the building of organizational culture based on your requirements. HCM lessens the burden of your HR through HR analytics reports generation to meet benefit administration, talent management, workforce management, and your employees’ expectations.

All features of HRIS: HCM has all features of HRIS including all employees database, applicant tracking system, absence management, workflows, learning management system self-service, compensation management, and benefits administration.

Performance Management: Facilitation through monitoring whether employees are following key performance indicators, or otherwise, reward or ward accordingly. It also facilitates feedback processing.

Onboarding: HCM facilitates your newcomers to get guided to know about their duties, roles, time schedules, shifts, etc.

HR Analytics: Provides your HR data gathering, processing, and analysis to make vital business decisions.

Compliance Management (Policy, Documentation, etc.): Policy and documentation is yet another feature of the HCM software it makes you easy access to.

Global feature (Multi-currency, multilingual feature): HCM has multi-currency and multilingual features encompassing different global currencies and languages, as per your regional and local needs.

What is HRM Software?

Human resource management system (HRMS) gathers employee data focused more on the employee management process of their lifecycle, say their graph of promoting and excellence. HRMS works on task optimization and employee performance enhancement, hence it helps HR to better understand its employees.

Feature of HRM Software

All features of HRIS and HCM: Human resources information system (HRIS) includes an employee database, applicant tracking system, absence management, workflows, learning management system self-service, compensation management, and benefits administration.

The HCM solution has HRIS features plus HR analytics, onboarding processing, performance management, compliance management, and global features of multi-currency and multi-language.

Time Labor Management (TLM): HRMS saves your precious time and labor via quick access tools and techniques. Big data input, gathering, saving, deletion, and retrieval are the features that help minimize your HR and time labor costs.

Payroll Processing: HRMS makes payroll processing easy, quick, and less prone to errors. Daily attendance, number of days and hours worked, absences, leaves, shift scheduling, and all help payroll processing decreasing routine HR department workload.

Biggest Differences Between HRIS, HCM, and HRM

HRIS vs. HRMS

The biggest difference between the HRMS and HRIS is, that the HRMS is more basic functionality-based like attendance and payroll. While HRIS focuses on its extension to the performance management systems and reporting systems. HRMS is suggested for smaller companies and the HRIS will work for bigger ones.

HRMS vs. HCM

The biggest difference between the HRMS and HCM is, that the HRMS entails performance management tools available, recruitment analytics, and productivity-focused. Whereas, HCM has more complex features having both HRMS and HRIS systems. HCM focuses on the employee lifecycle and is strategic helping HR in the strategic management decision-making process.

HCM vs. HRIS

The biggest difference between the HCM and HRIS is, that the HCM suite has all HRIS features, but HCM additionally offers onboarding, global compliance, analytics for HR, managing employee performance, compensation and benefits administration benchmarking, manpower planning, position mapping, and strategic HR management.

HRIS, HCM, and HRMS Similarities

• Recruitment and Selection; Application tracking
• Onboarding
• Attendance, Time-tracking; Performance Measurement
• Workflow Reviews and Analytics
• Employee self-service; employee service
• Compensation and Benefits
• Training and Development
• Promotions
• Efficiency and Disciplinary Actions
• Retirement Plans

Although there are more similarities and a few big differences between HRIS, HRMS, and HCM, therefore it is necessary to understand that HCM includes HRMS functions including Strategic HRM, while HRMS includes all HRIS functions additionally performance management and reporting. And, HRIS includes basic HR software features like attendance and payroll.

Which System Should You Choose?

WebHR suggests you should know the following before selecting any system for your organization:

• Know your organizational mission, vision, strategic plans, and current status quo
• Know your business needs
• Perform a gap analysis to bridge the same (in terms of business position)
• Look if HR software may save your precious assets of vital data and time
• Identify alternative HR software choices
• Select the best service available
• Validate the selection through a trial version (like a cloud-based WebHR free trial)

It is suggested that if you are a small business owner, opt for HRIS. Say you are a small to mid-size company then select HRMS. And, if you are a larger and growing business concern, then look for the HCM system. But keep in mind the above-stated question while making any business decision.