Managing an HR department is a complex task. And a manual process could add more difficulties for an HR admin to handle, and sort out HR-related stuff.
But over time, different technologies have arrived to play a significant role in facilitating and optimizing HR processes. However, HR technologies like; HRIS, HRMS, and HCM bring a different dimension and simplification to the HR sector.
They seem similar but have different roles to play in the HR sector. Each system handles a different part of HR. For example, tracking support, payroll management, and more complicated tasks like talent management, training, job posting, etc.
These systems have made a tremendous difference in HR technology by revolutionizing the business’s handle and simplifying its human resources.
In this detailed guide, we’re going to briefly talk about HRIS vs HRMS vs HCM, their benefits, use cases, comparison, and which one you should adopt for your business.
Let’s jump in 👇
01. Understanding HRIS: human resource information system
HRIS system works as a trusted source of information to reduce costly redundancies and provide a guideline for managerial decision-making. As a result, HR teams and organizations become more efficient with the use of this technology.
Let’s find out more about it:
What is HRIS and system explanation?
Generally, an HRIS (human resources information system) is a software solution that collects, stores, and manages detailed data about an employee of the organization. This HR software is designed to automate core HR processes and functions.
It helps businesses improve the productivity of both managers and employees.
However, the capabilities of an HRIS include:
- Performance management
- Learning and development
- Benefits administration
General features and functionality of an HRIS
Apart from the general functions of an HRIS, there are a lot of things that you need to know before using this system. It will help you to compare it with the other two systems; HRMS and HCM.
- Employee database: It stores complete information about each employee, including their job role, department, and contact information.
- Recruitment and applicant tracking: HRIS can assist in handling job postings, applications, and interviews, making the recruitment process more efficient.
- Onboarding: It overrides the new employee data and important documents and training materials automatically.
- Time and attendance tracking: It helps in tracking work hours, leave management, and attendance.
- Performance management: Employers can manage appraisals, feedback, and development plans for employees within the system.
- Learning and development: HRIS can help to manage, track, and deliver training and development programs.
- Compliance management: It ensures that the organization is conceding with employment laws and regulations.
- Reporting and analytics: An HRIS provides reporting features that allow for the extraction, analysis, and export of data valuable for decision-making.
How can an organization benefit from using an HRIS?
A significant 98% of businesses considered a cloud-hosted HRIS, demonstrating the dominant preference for cloud-based solutionsSoftware Path
We know how HRIS is an essential term for a company. And how it provides a simplified way to manage employee data and maintain better efficiency.
The gist is, it gives an extra layer of protection by helping HR admins to overcome complex situations and HR-related blunders.
An HRIS can bring many benefits to your organization:
- Increases efficiency: An HRIS can streamline HR processes, freeing up time to focus on more HR-related strategic tasks.
- Reduces errors: By automating repetitive tasks, an HRIS can help minimize potential errors, leading to greater accuracy and consistency.
- Maintains compliance: An HRIS aids in keeping your organization compliant with employment laws and regulations, avoiding potential legal issues and penalties.
- Gives data-driven decisions: HRIS enables organizations to access and analyze vital employee data, allowing them to make better-informed decisions about workforce management.
- Improves onboarding: HRIS can automate and simplify the onboarding process, making it easier for organizations to get new employees quickly.
- Increases empowerment: Offering self-service tools for employees to manage their information, HRIS can help improve employee engagement and empowerment.
- Enhances collaboration and trust: A centralized HRIS can foster team collaboration, communication, and trust between employees and HR departments.
- Improves overall organizational benefits: By integrating an HRIS into your organization, you can streamline processes, enhance productivity, improve decision-making, and foster a more employee-centric company culture
02. Understanding HRMS: human resource management system
HRMS stands for human resource management system. It mainly helps to manage employee information like recruitment, payroll, time and attendance, training, and compliance.
By managing these, an HR department of a company can boost its efficiency, and save crucial time & money. Overall, it provides a centralized database for an HR admin to supervise all sorts of tasks on time.
What’s more? Let’s find out below👇
What is HRMS and system explanation?
A Human Resource Management System (HRMS) is a complete software platform developed to streamline and centralize various HR functions within an organization. It is a digital place for managing employee data, automating HR processes, and optimizing workforce management.
However, an HRMS typically includes features:
- Employee information tracking
- Payroll management
- Time tracking
- Performance evaluation
- Training management.
In short, an HRMS simplifies HR operations, enhances data accuracy, and enables HR professionals to integrate these functions into a single system.
General features and functionality of an HRMS
An HRMS, or Human Resource Management System, includes a range of features designed to manage and maintain human resources, business processes, and data.
Here are some general features and functionality of an HRMS:
- Employee database: A centralized system for storing and managing employee data like personal details, job and salary history, banking and tax details, etc.
- Recruitment & onboarding: Helps streamline the hiring process, and enables online job applications, screening, tracking, and onboarding of new employees.
- Payroll: Manages employee compensation, calculates payroll taxes, and ensures accurate and timely salary distribution.
- Benefits administration: Allows tracking and administration of employee benefits such as insurance, retirement plans, paid time off, etc.
- Time and attendance: Keeps track of employee working hours, absence, and leaves, and manages shift scheduling.
- Training & development: Provides a system to create, assign, and manage employee training and development programs.
- Performance evaluation: Allows tracking and evaluating employee performance, setting goals, and feedback.
- Reports and analytics: Useful for creating HR reports on HR metrics. These tools can provide insights into workforce performance, attrition rates, etc.
How can an organization benefit from using an HRMS?
In 2019, 47% of large-sized organizations had an HRMSStatista
Like HRIS, HRMS can also bring several benefits to an organization, facilitating effective staff management and improving internal processes.
Let’s explore some advantages of implementing an HRMS:
- Increased efficiency: HRMS reduces the manual load associated with many HR department responsibilities, allowing time to be saved and focus on the essential aspects of personnel management.
- Centralization of information: With all employee information stored in one place, accessing and updating data is made easier and faster.
- Process automation: Completing repetitive tasks such as managing timesheets, processing payroll, and administering benefits become much faster and more accurate.
- Improve recruitment and reporting: HRMS streamlines the recruitment process and enables the generation of detailed reports and deep analysis, helping to make more informed decisions.
- Employee evaluation and development: By facilitating performance evaluations and using effective training and development tools, HRMS helps increase employee engagement and retention.
- Reduction of errors: By eliminating manual processes and dependence on paper, HRMS helps significantly reduce the chances of error and ensure data accuracy.
03. Understanding HCM: human capital management
Generally, HCM stands for Human capital management. It indicates the strategies and processes that an organization uses to manage its employees. Plus, it aims to optimize the productivity and performance of an organization’s workforce.
Apart from these, it uses technology and data to improve processes such as talent acquisition, payroll management, administration tasks, performance management, and succession planning.
In short, having a well-structured HCM strategy helps to attract and develop top talent, improve employee performance & productivity, and more.
Let’s find out more about this system below:
What is HCM and system explanation?
Human capital management (HCM) is the process of getting the right people on board, handling them well, and getting the most out of them. This system solely indicates an administrative task by creating business value and insight.
It includes activities like:
- Retaining employees
General features and functionality of an HCM
We understand that human resource management is the main place that determines the success of any organization. Therefore, a human capital management (HCM) system provides effective support and solutions to help you in this task.
Here are some general functions and features of an HCM that can help you in this important process.
- Recruiting and selection: An HCM helps you find and select the right candidates for available positions in your organization.
- Performance management: It provides tools for evaluating employee performance, setting goals, and identifying opportunities for improvement.
- Payroll and benefits administration: Allows efficient management of payroll, payments, and benefits, simplifying the process and ensuring confidentiality.
- Employee development: HCM functionalities include career development planning and providing training and continuous learning opportunities to employees.
- Time and attendance management: An HCM gives you tools to track employee schedules and attendance, making reporting and administration easier.
- Workforce planning and analysis: HCM systems help you plan and analyze your workforce needs and make data-driven decisions about the growth and development of your organization.
How can an organization benefit from using an HCM?
The global market for HCM software has shown significant growth (near $16.01 billion), fueled in part by companies seeking more efficient methods of managing their human resourcesGrand view research
We understand how essential it is for an organization to effectively manage its human resources. Employees are the powerhouse of any company. The more company looks after them, the better outcome will come.
Here, you will discover how a human capital management (HCM) system can bring significant benefits.
- Increased operational efficiency: These systems automate many of the human resource management tasks, allowing the team to focus on more important and strategic tasks.
- Optimizing the recruiting process: HCMs help identify and attract the right talent, reducing the time and costs associated with the recruiting process.
- Improving performance management: By providing a clear and data-driven assessment of employee performance, HCMs enable the implementation of effective improvement and development strategies.
- Improve employee engagement and satisfaction: By providing transparent feedback and communication channels, HCMs can help increase employee morale and satisfaction.
- Better information for decision-making: With the data and analysis it provides, HCMs enable more informed decisions regarding workforce management.
Comparing HRIS vs HRMS vs HCM
Here’s the complete comparison table of HRIS vs HRMS vs HCM to better understand their features and functions.
|Feature||HRIS (Human Resource Information System)||HRMS (Human Resource Management System)||HCM (Human Capital Management)|
|Purpose||Manages employee information for administrative HR tasks||Provides comprehensive management for HR tasks such as training and benefits administration||A broad system including hiring, training, payroll, benefits, and more|
|Main focus||Data management and information||Comprehensive HR processes management||Strategic workforce management|
|Recruitment||Typically has limited recruitment capabilities||Some systems include recruitment capabilities||Most include recruitment capabilities, from job postings to applicant tracking|
|Key features||Employee records, attendance, payroll||Recruitment, benefits, training||Performance management, Succession Planning, Employee engagement|
|Impact on HR||Improved Data management efficiency||Enhanced HR process efficiency||Aligned HR strategy with business goals|
|Impact on employees||Streamlined HR-related data access||Smooth HR process execution||Empowered workforce with personal growth|
|Reporting and analytics||Can generate reports, but may not include advanced analytics||Typically includes sophisticated reporting and analytics||Typically includes sophisticated reporting and analytics|
|Ideal for||Small to Medium-sized Businesses||Medium to Large-sized Organizations||Medium to Large-sized Organizations|
How to choose the right system for your business – HRIS vs HRMS vs HCM
Choosing the right HR management system can be a seemingly challenging task, especially given the range of solutions available: HRIS, HRMS, and HCM. But you can make this decision a lot easier on yourself if you think about the needs of your business and a few other important things.
Let’s see what are they:
Determining your business needs: Start by assessing your organization’s current needs. An HRIS may be sufficient if you just need a simple system to keep track of employee information. If you want more complex solutions, such as payroll or benefits management, you can consider an HRMS system. But if you want a complete package that handles all aspects of your workforce, then an HCM system would be suitable.
Available budget: Budget is also an important factor in choosing an HR system. While an HRIS system may be more affordable, an HCM offers a wider range of functionality, but also at a higher cost.
Company size: For small companies, a simple HRIS system may be sufficient. As the organization grows in size, needs may change, which may justify moving to an HRMS or HCM system.
Ease of use and support received: Regardless of the functionality offered, you must choose the tool that is intuitive and easy to use. Additionally, checking whether the provider offers exceptional support for any issues is essential.
📖However, you can check this detailed guide on how to start an HR department from the ground up. It will definitely help align your needs and requirements before organizing an HR department
How WP ERP HR module can be a compacted HRIS, HRMS, and HCM system
WP ERP is a complete and affordable system that effectively combines HRIS, HRMS, and HCM features. It provides simple and professional management of employee data, payroll, and benefits, and supports the recruitment and performance management processes, fitting perfectly as an HRIS, HRMS, and HCM system.
What’s more? Let’s find out below:
- Human approach – WP ERP HR module successfully combines the essential aspects of human resource management, respecting the emotional and professional needs of employees and the company.
- Full management – The system integrates employee information management (HRIS), payroll and benefits (HRMS), and recruitment and performance management (HCM) processes.
- Professionalism and experience – WP ERP has earned international recognition and rave reviews for its ability to address HR issues in a professional yet affordable manner.
- Emotional support – Accessibility and understanding of customer needs are at the heart of WP ERP, providing advice and emotional support in human resource management.
- Reasonable prices – WP ERP proves that high-quality services can be available at affordable costs, making it an ideal solution for companies of all sizes. The user-based pricing model makes it more reliable and perfect for business owners.
In conclusion, WP ERP is the perfect solution for managing human resources in a compassionate, professional, and accessible way.
Well, our post comes to an end. We hope this comprehensive comparison guide helps you to know more insights about HRIS, HRMS, and HCM systems. And why these systems are most of the important parts of an HR department.
The global ERP software market grew by 9% in 2019, generating approximately $39 billion in revenue. This market is expected to exceed $49.5 billion by 2025Net suite
So after you know the differences between HRIS vs HRMS vs HCM, it’s your turn to choose the perfect system for handling your human resource department. Remember one thing, there is no “one size fits all“.
Therefore, conduct a deep analysis and research to implement the perfect system for your company. Also, before implementing a system, note down your company’s needs, requirements, and budget.
Here’s a guide to help you👇
🔗Learn about how much does it cost to implement ERP software?
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