HRMS

Exploring The Differences Between HRMS, HRIS Software and HCM

HR, HRM, HCM, HRMS, and HRIS: the technological advancements in Human Resources Management seem like a concoction of similar letters. However, where humans are involved, their management demands a lot of effort. This mechanisation is supposed to make their supervision easier.

An HR tool helps professionals in the following ways:

  • Enhancing Productivity
  • Reducing Human Errors
  • Proper Maintenance of Records
  • Secured database
  • Better Employee Experience

However, when many (phonetically similar) tools promise to make recruitment simpler, you may get confused about which to employ in your organisation.  While having an expert HR partner like BetterPlace in your corner does help, having a thorough knowledge of the subject makes the decision simple too. 

Here’s a brief description of the top three tools, HCM, HRMS and HRIS, used by recruiters and HR Consultants, and their differences.

HRIS

Human Resources Information System organises and manages the workforce database for your company within a centralised software. It is a data-driven system focusing on people, processes and HR policies.

HRIS captures the following:

  • Personal and job-related information
  • Biometric attendance integration
  • Salary and benefits information
  • Work permit and tax data
  • Leave requests
  • Report generation and analytics
  • Employee self-service

For recruiters, it facilitates many documentation and administrative tasks:

  • Profiling and Shortlisting
  • Applicant Hunt
  • Training Database
  • Performance Management

HCM

Human Capital Management is the practice of managing your employees. However, it focuses more on the management of the knowledge workers or the white-collar staff. It is a cloud-based tool that offers almost all features of an HRIS along with recruitment and personnel management elements.

An HCM tool offers digital AI-based assistants and other features to help in all data-driven, strategic and financial elements for effective HR decision-making.

It offers you three categories of tools:

Recruitment

  • Applicant Tracking
  • Facilitating the online interview process
  • Onboarding procedure

Workforce Management

  • Working hours and attendance Administration
  • Performance Supervision
  • Employee self-service
  • Employee life cycle tracking
  • Compensation and Benefits
  • Exit Formalities

Talent Management

  • Career Insights
  • Growth Planning
  • Learning and Development
  • Training Modules
  • Budgeting
  • Salary Structure

HCM is a bit more complex than HRMS and HRIS

HRMS

Human Resource Management System acts as a common database for all employee data. You can use it to process their compensation and offer them a self-service portal. A competent software like BetterPlace’s HRMS takes over many responsibilities. 

These include collecting and processing raw staff data and churning out refined information for analysis. In addition, it facilitates data recording, running the reports and creating schedules.

It combines many features of HCM and HRIS to provide a one-stop shop for information collection and processing. However, it is one step ahead of HRIS regarding talent management functions.

HRMS offers the following digital elements:

  • Automated Salary Processing
  • Working Hours Supervision
  • Labour Management
  • Recruitment Functions

But what is the difference between HRMS and HRIS software and HCM? That is a tricky subject as there is much overlapping between these three. 

Let’s take a look.

Differences between HRMS, HRIS Software and HCM

Factor

HRIS

HCM

HRMS

Basic Features Manages the staff, policies and company processes.

Features:

  • Recruitment
  • Leave Management
  • Job titles and descriptions
  • Training modules for employee growth and development
  • Salary and benefits
  • Personal data
  • Employee Self-service platform
It offers everything that HRIS does and more.

Features:

  • Candidate onboarding
  • Performance reports.
  • Analytics
  • One platform to support the complete recruitment activities.
  • Multinational domain operability, i.e. it offers data processing in multiple currencies and languages
  • Talent development
  • Tools to manage retirement and pension
An amalgamation of HCM and HRIS.

Features:

  • Working timings and Attendance Management
  • Personnel Management
  • Salary processing tools, including pay calculation, tax deduction and making direct account deposits from the system.
  • It also supervises project timelines to monitor performance and enhance productivity.
Employee Platform Only for employees Not provided For employees and applicants
Expanse of Services Serves only the employees. Manages the employee data in multiple geographies, currencies and languages. It further ensures each employee has the set of responsibilities that suits their stage of expertise and skills. Serves on boarded employees and applicants.
Approach Fundamental approach to HR management. It relies on data collection and regular updates  from the current employees at the time of joining. Strategic approach. Relies on collection, processing and analytics of the following information for all decision-making activities.
  • The company culture
  • Job description of the vacancies
  • A thorough analysis of applicant skills, motivation level and experience
  • Ensuring the right candidate fills the suitable position in the right team where they can perform their best.
  • Regular performance review
Follows a traditional approach.
Purpose Aims to provide accurate and timely information for your decision-making. Focuses on polishing the talent on board to meet the organisational goals. Aims to build a productive work environment with job satisfaction for all staff
Ideal for A small company with basic needs like simplified data and accurate administrative-process workforce information. Medium to large organisations need more than a simple flow of employee information. It can provide analysis of the recorded data across geographies. Supports ambitious growth plans. It will provide most of the data analysis features of HRIS and HCM and help you enhance staff performance and retention. Plus, it offers tools to analyse their job satisfaction and motivation level so you know if your strategies are working.
Ease of Use Straightforward and easy-to-use software with essential functions to assist you in recruitment-related activities. Probably the most complex of all three due to the expanse of data and services offered. Offers much-evolved data analysis and management tools that are maybe challenging to use. However, it speeds up the tasks like recruitment and performance scrutiny.
Cloud Base Hosted in the cloud. Built in the cloud. Hosted in the cloud.

Choosing between HCM, HRMS and HRIS: What’s Best for Your Business?

Despite the difference between HRMS and HRIS software and HCM, these terms are often used interchangeably, especially HRMS and HRIS. While these terms are not new, the technological innovation they have undergone is. 

You must consider the below-mentioned criteria while picking the right software for your organisation.

  • Organisational Size

If you are a new start-up with a small workforce, you might not need complex software like HCM. Instead, choose a software between HRMS and HRIS. But if you are a conglomerate with over ten thousand employees across nations, you must have the latest version of HCM on your systems.

  • Industry and Domain

A software like HRMS will facilitate decision-making if you recruit for the IT industry. However, scouting candidates for a non-profit can keep you from investing in such software. 

On the other hand, if you intend to expand your contractual workforce, connect with BetterPlace for superior tech and the right partners who understand your needs well.

  • Growth Strategies

Whether you are a start-up that has recently received multi-million dollar funding or an existing MNC that plans to scale further, you need a robust HRM tool. Go for software like an HCM or an HRMS.

But if you have just started your journey in the HR domain, wait a while to pick the software.

Besides HRMS, HRIS software, and HCM, there is a suitable solution for every recruiter and HR personnel. Connect with BetterPlace’s team of experts to gauge which solutions would best serve your HR needs.

Shalini L

One of the prime contributors for this blog, Expertise in Staffing and Recruitment, Content Strategist by Profession. A Music Lover & Traveller by Choice.

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