How to Choose Between HRIS, HRMS, and HCM Solutions
In times like these, you may not be receiving the support you need from your current payroll and HR provider. Your current processes may be outdated and no longer work to meet your business needs. When it comes to researching HR technology, you’ve probably heard terms thrown around like HRIS, HRMS, and HCM. If you don’t know the difference, these terms can spell confusion and indecision.
While these terms are used rather loosely and interchangeably in the HR technology world, we’ve come to a consensus on what we believe each of these solutions best encompasses. Let’s take a look at the differences in the options available so when you’re ready to make a switch and invest in a new solution, you are selecting a best-in-class system that provides what your organization needs.
What is the Difference Between HRIS, HRMS, and HCM?
There are many opinions out there on what features comprise HRIS, HRMS, and HCM platforms. These opinions, along with the letters making up these acronyms, can create a confusing game of catchphrase. So let’s break down each of these terms and look at the benefits of each solution.
What is an HRIS?
A Human Resource Information System (HRIS) allows you to manage the information of your personnel, policies, and procedures online. HRIS systems typically provide the following functionality:
Payroll and Tax Compliance: Process payroll using correctly calculated wages and salaries, and manage deductions for taxes and benefits.
Attendance: Track employee hours worked, accrual balances, PTO, and manage schedules.
Benefits Administration: Manage benefits information, track compliance, and allow employees to enroll online.
Personnel Tracking: Manage an online employee directory that includes contact information, position details, and personal information.
Self Service: Provide employees with access to data and functionality like updating personal information, enrolling in benefits, and checking accrual balances. This delegation of responsibility also creates a more engaged work culture.
What is an HRMS?
While an HRIS manages employee information, a Human Resource Management System (HRMS) focuses more on employee lifecycle management processes. HRMS applications can be comprised of the following components:
Performance Management: Establish employee performance standards and evaluate performances based on those standards.
Recruiting: Manage the hiring process by posting job openings, receiving online applications, and tracking candidates.
Onboarding: Streamline the new hire proces by automating paperwork and tracking training progress.
Reporting: Pull metrics and analytics for company trends and actionable insight.
By using an HRMS, companies can promote engagement from the recruiting process, just like with an HRIS. The difference is an HRMS can help companies maintain engagement by assigning personalized employee goals and conducting regular performance tracking in a simplified, all-in-one system.
Why are performance reviews the deciding factor between an HRMS and an HRIS solution? As your company grows, you will hire more employees. Investing time and money in those employees to ensure they have a career path outlined for them will reap higher rewards. Companies will experience reduced turnover and increased employee engagement.
What is an HCM?
What is an HCM?
Similar to an HRIS and HRMS, a human capital management (HCM) system is composed of core HR functions for workforce acquisition, workforce management, and workforce optimization. Here are some key capabilities of an HCM solution some companies might find useful:
Administrative Functions: Employee data, benefits administration, payroll administration, and self-service portals for employees.
Company Data: Access to company documents and data and an organizational knowledge base.
Talent Management: Recruiting, onboarding, training, applicant tracking, online job board posting, performance tracking, and management.
Labor and Workforce Management: Time and attendance, scheduling, self-service options, budgeting.
What is Workforce Management?
Heard of Workforce Management? Don’t be confused. WFM is also a phrase used in HR conversations but differs from the solutions we’ve described. It revolves around labor utilization. WFM focuses on managing compliance risks and optimizing worker shift schedules. An HCM takes WFM to the next level by encompassing the full range of HR management.
|Payroll||HRIS Capabilities||HRMS Capabilities|
|Tax Compliance||Performance Management||Scheduling|
|Benefits Administration||Succession Planning||Applicant Tracking|
|Time & Attendance||Recruiting||Training|
|Personnel Tracking||Onboarding||Budget Planning|
|Employee Self-Service Options|
Which System Should You Choose?
We hope we’ve cleared the confusion for you around these HR technology terms. When choosing the best HR software, you’ll need to assess your company’s needs and determine which solution is the right fit for your organization. No matter the size of your business, all these tools are useful in managing employees. It is up to you to determine the set of goals you wish to accomplish with your system and which will be most beneficial to you.
Systems that are designed to unify different aspects of HR in one place increase efficiency, improve usability, reduce operational costs, and bolster security. As your business grows, having an intuitive HR system that can grow with you is a must.
How APS Can Help
APS is an all-in-one solution for all HR and capital management needs. We are a cloud-based system that securely stores and manages employee data from hire to retire. Our employee self-service model also makes it easy for managers to engage with and oversee employee schedules and compliance anytime, anywhere. We have continued to develop and expand our technology over the years while ensuring our system is unified for the best possible user experience. In addition to Core HR, we offer Payroll, Attendance, Scheduling, Recruiting and Onboarding, as well as ACA Reporting.
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