What is the difference between HRIS, HCM and HRMS?
HRIS, HCM and HRMS are all common terms bandied about with regards to cloud-enabled SaaS (software as a service) technology for HR, but many HR professionals would be hard pressed to define what each of these terms actually mean.
In a nutshell, all three are systems or software utilised to help organise employee information but there are points of distinction among them.
To help boost your HR tech literacy, here is a cheat sheet of key terms to help you decide which type of system you actually need.
What is HRIS (Human Resource Information System)?
A HRIS, also commonly referred to as a HRIS System or HRIS software, carries out both HR and payroll functions. While a HCM system or software (see below) is more concerned with people and their behaviour – or only HR functions. A HRIS generally combines employee data sourced from payroll inputs and integrates this employee data into HR modules. A HRIS can manage the time and costs associated with each employee as well as an employees/employers HR requirements.
Every organisation will be unique and have their own requirements but the following outlines what a best in breed HRIS software includes:
- HR Masterfile
- HR Document Management
- Performance Management
- Learning & Development
- Talent Management
- Workforce Planning
- Exit Surveys
- Succession & Career Planning
- Strategic HR Reporting
- Engagement Survey
- HR Analytics
- 360 Feedback
- Payroll & leave management
- Award interpretation
- Roster management
- Time Sheet Management
- Automated workflow tools
- Employee self-service dashboard
- Manager Dashboards
- Online forms with workflow
- Dynamic organisation charts
- Single employee masterfile
- Payroll and financial reporting
- Document management
- Labour Cost Management
- Termination wizard
- Super clearing and electronic tax filing
What is HCM (Human Capital Management)?
Human Capital Management or HCM refers to a system that oversees the HR requirements of a company’s most valuable asset – its people. Functionalities of a HCM tend to centre on employees’ behaviour, career trajectories, and learning and development needs. Payroll functionality is not typically included in HCM software but facilitates and records a range of activities, including:
- Performance management
- Talent management
- Learning and development
- Career progression
- Employee recognition
- Succession planning
- Workforce analytics
As you might have noticed, this human focused software has more to do with managing the life-cycle of an employee from hire to retire, with the aim of promoting a culture of productivity.
What is HRMS (Human Resource Management System)?
HRMS appears to be less common in the Australian and New Zealand markets, and although there is no global consensus, it can be perceived as an antiquated term.
The term HRMS tends to be utilised by larger American SaaS providers to generally denote HCM capabilities. Once again, these functions revolve around people and keeping a record of information surrounding them.
What is in a Name?
HR SaaS offerings are often difficult to categorise. Even companies that offer software seemingly have identical points of variance. Some have argued that these systems’ names were only differentiated so that marketers could set their product offerings apart from competitors.
Nonetheless, with the growing ease of integration in the deployment of such systems, it is possible to seamlessly incorporate payroll, HCM and HRIS capabilities on a single platform. Whichever you choose for your business, there is no denying that these systems will save you time and money.
Ultimately, it does not matter what these systems are called. What matters is that you pick the right software to suit your organisation’s needs.
Where to start with
choosing a HRIS
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Tracy is a corporate escapee with
an obsession for improving payroll compliance and efficiency.
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