Employee Benefits
Decoding the Difference Between HRIS, HCM, HRMS
Once you enter the world of employee benefits
solutions, you find yourself diving in the messy alphabet soup with new
terminologies and jargon floating around. What actually is HCM? How is it
different from HRIS? Why does HRMS keep appearing on vendors’ websites? How are
these words related to and different from each other? The more you read, the
more complex it gets. The credit for the confusion behind these words belongs
to marketing professionals and benefits administration software vendors who
often use these words interchangeably. Honestly, coming across these words
without knowing the meaning separately can be pretty frustrating and a
roadblock to offer flawless benefits plans.
The matters get worse as the
meaning of these abbreviations is almost similar. It is like saying ‘po-tay-to’
and ‘po-tah-to.’ Are you equally confused between these three HR technology
systems? Well, the good news is that you are not alone. Even experts have a
hard time distinguishing between them. Adding more to it, vendors hardly take
any effort to draw a significant line while talking about HR solutions.
Although there are several other
acronyms used in HR software solutions, such as ATS (Applicant Tracking
System), TMS (Talent Management System), LMS (Learning Management System) and
more, HRIS, HRMS, and HCM are certainly the most popular ones to describe payroll
and HR solutions.
To keep aside all the confusion
and mess, this blog will explain these words precisely and accurately in a
simple language. We hope that it will straighten things out for you and help
you pick the right solution services for the company. Take a read:
Getting the Basics Right
Before we move any further, let’s
get acquainted with their full-form first.
HRIS: Human Resource
Information System
HRMS: Human Resource
Management System
HCM: Human Capital
Management
All of them signify software
solutions that incorporate cloud computing, database management, along with
other elements to build a platform that handles workforce management needs
efficiently. Have a look at the evolution of Human Resource software and you
will notice that solutions offered under each of them jointly now were
standalone once. With time, companies started clubbing them together to come up
with a streamlined human resource software service.
From Wikipedia to various
articles, you can seek definitions of these concepts everywhere. However, there
is no clarity or an accurate conclusion. So, after conducting detailed research
and going through various studies, here are some features and functionality
that these HR systems are associated with.
What Is HRIS?
While we are defining different
HR solutions, think of HR as a combination of wants and needs. Regardless of
what industry your company belongs to or what service you offer or how many
employees work in your organization, there are certain things that are
necessary for its existence. On the other hand, there are some things that you
strive to achieve to take your business to new heights and attain your goals.
So, HRIS at its core is a software that manages procedures, policies, and
people of a company. The users can track and automate the HR needs
electronically as these platforms consist of the entire database at the center,
hence, the word information included in the name. Moreover, it also includes
reporting, analytics, and also categorizes data into departments, workers, and
company.
In simple words, HRIS, Human
Resources Information System is an online solution designed to enter data,
manage policies, and track all the information concerning human resource
operations. The motto is to provide complete guidance to employees of the
organization, thus, it translates data into on-demand insights and information.
Needless to say that it also helps in keeping all the details about staff
members organized and accessible.
HRIS software typically
includes the following capabilities but one can interpret them according to
his/her understanding:
Recruiting: It involves
the Applicant Tracking System (ATS) which makes it easy to update current job
vacancies and descriptions, handles interviews, store resumes, and other tasks
related to hiring and recruiting.
Absence Management: For
taking care of the planned and unplanned absence of the employees due to
injury, sickness, maternity leave, unauthorized leave, and other unforeseen
situations.
Workflows: This is the
solution that helps in boosting productivity and quality of work in the
company.
Training and Development:
Make sure that employees grow and learn, hence, provide them with ample
opportunities to hone their skills and continue their growth.
Benefits Administration:
This is the most crucial element of the system as it deals with health
insurance plans, 401K, track compliance and keeps an eye on all the relevant
information about the staff members.
Self-Service Portal: It
enables employees to manage their details on the portal and also modify the
information when required.
Compensation Management:
To look after the forms related to compensation, such as Paid Time Off (PTO),
salary, bonus, overtime pay, company-funded activities, etc.
Personnel Tracking:
Maintains the digital record of employees, including contact information, job
position, personal details, and more.
Having mentioned these points, we
would also like to add that this may not be the case with every HRIS system.
Some may have five features while others may have nine, the numbers may vary
but the core is the same.
What Is HCM?
Human Capital Management (HCM)
includes a set of practices for HR management with the aim to attain
organizational competency. The focus is on workforce management, acquisition,
and optimization. The system also refers to the overarching management of the
employees in an organization. However, things are not specified in this case as
everyone has their opinion on the difference between HCM and HRMS. For some,
the former is more extensive while others bestow that title to the latter. One
certain point is that HCM software is more comprehensive than HRIS as it
includes additional features along with the ones offered by HRIS.
The categories that fall under
this system aim at recruiting, retaining employees, and the entire employee
life cycle. The tools range from attracting, hiring, onboarding, performance
assessment, budgeting, salary planning, and goal setting. It also helps
employers and the HR team to mentor their staff members and guide them to
achieve success. Apart from this, analytics is also a prominent part of HCM solutions used to track
the employees’ performance and evaluate their potential and future growth. HCM
showcases all the features of HRIS and also offers Talent Management
capabilities, such as succession planning, compensation, development, learning,
and career. The other elements are multilingual, multi-currency,
country-formatting, and possibly localization.
The primary features of HCM
are:
Employee Performance: It focuses
on tracking the performance and productivity of employees through an automated
system.
Onboarding: Speed up the
process of hiring and recruiting by streamlining the whole system.
Analytics: Get an in-depth
view of key metrics.
Position Control: Assigns
the authority and responsibilities to the right employees to avoid any
chaos.
HR Services: Includes all
the details regarding the company’s policies, data, procedures, and
documentation and provides access to this information.
Global: Multi-currency and
multilingual features to support international needs.
Workforce management:
Takes care of time, attendance, tasks, budget, schedules, and forecasts. As you
Creating staff scheduling using excel
Staff Scheduling: Like you
automate staff schedules, mark absence, calculate total work hours, and create project plans in excel, same can be done more efficiently using comprehensive HCM software. For people facing budget constraints, Excel can
still work as a useful tool for staff scheduling tasks.
We are sure that you noticed the
overlap features with HRIS, thereby, making the whole subject tricky. HRIS
revolves more around Talent Management while HCM digs a bit deeper. All HCM
suites may not offer the same functionalities listed above but benefits
administration software vendors ascertain to include them all to meet the
expectations of every HR.
What Is HRMS?
HRMS stands for Human Resources
Management Systems is an online solution that integrates all the core HR
functions into one suite. This enables users to accomplish their tasks,
maintain data, analyze the current trends, and create reports at one
destination. Although HRIS and HRMS are almost the same software, the factors
and applications may vary for each of them. Apart from the solutions provided
by HRIS and HCM, HRMS offers some additional applications as well which include
payroll, time & labor, and more. Furthermore, this software reduces the
chances of errors and oversights that are common in a manual process. The fact is
that HRMS is widely used by benefits administration software vendors for every
HR products that they offer to the companies. Of course, buyers need to assess
the software to conclude if it offers the functionality and features that they
require for their organizations.
HRMS also comprises assessment
and planning tools with a primary focus on organizing employee information. The
scheduling function may or may not be present in these systems so before you
avail the HR software service, make sure that it has all the necessary features
that you need to meet your objectives. Considering how massive HRMS is and the
functions it offers, not all service providers are proficient in building such
an effective and progressive Talent Management system. Some may go for [HRIS +
(Payroll + TLM) = HRMS] approach, while others can follow [HCM + (Payroll +
TLM) = HRMS].
However, we have listed a few
points that you can expect in most HRMS systems. Have a look:
- Almost every feature and
capability of HCM and HRIS.
- Time and Labor Management (TLM)
to track employee schedules and project times which is essential to increase
productivity and profitability.
- Payroll Processing which
automatically calculates salaries, deducts taxes, and sends deposits.
Picking the Right Solution
Now that you are familiar with these three HR solutions, you know that the line between them is a blur, hence, confusion in the industry to give specific definitions of each of them. However, to make things a bit clear, we have included a picture that represents the precise differences.
Yes, many would say that there is
a specific solution for every business but the truth remains that no matter
what industry you serve, all three of them can prove to be beneficial for you.
So, it’s up to your research and evaluation whether you pick HRIS, HCM, or
HRMS. Devote your time and efforts to get your hands on the best vendor in the
market who is on the same page as you. Your definition of an HR solution can
contradict the vendor’s and this can lead to confusion. Go through the
descriptions carefully to know beforehand what to expect from the final
product. Also, there are HR software solution providers who might claim to be
the best to attract more clients but choose wisely. However, Accomplish is one
HR benefits
administration software vendor that believes in delivering quality and
satisfaction rather than indulging in false claims. Connect with us for the
solution that surpasses your expectations and accomplishes all your tasks efficiently.
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