Explaining the difference between HRIS and HCM

HRIS vs HCM: Which is right for your business?

Both HRIS and HCM solutions aim to streamline and enhance your workforce management. These systems include a whole suite of features that were once available only as stand-alone systems. Today’s HR software solutions package a wealth of functionality into a single system that makes it easy to analyze and evaluate data from numerous angles. The differences between HRIS and HCM systems are difficult to identify, as even system manufacturers often disagree on which category their programs fall under. 

Here, you’ll find an overview of the typical differentiators between HR solutions as well as some tips on how to find the solution that’s best for you.

What is a Human Resource Information System (HRIS)?

Explaining the difference between HCM and HRIS

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An HRIS is a software program or online system that provides data entry, data management, and data tracking for professional organizations. 

HRIS Features

An HRIS will typically include management features for your:

  • Talent acquisition and retention.
  • Application tracking.
  • Time and labor.
  • Payroll and tax compliance.
  • Benefits administration.
  • Employee workflow.
  • Training and development.
  • Employee self-service tools.
  • Data reporting.

The Benefits of an HRIS System

Though an HRIS system is the simplest of the solutions discussed here, this may appeal to small businesses and startups that don’t yet need the robust features of an HCM. An HRIS solution is still a feature-packed choice that will help you automate job postings, track applications, streamline paperwork for new hires, and track training. Once an employee has settled into the company, you can use your HRIS system to clarify employee standards, set workflows, and evaluate worker performance against them.

Within the HR department, the HRIS will help your employees manage absences, health insurance enrollment, 401(k) plans, salaries, bonuses, and PTO. Most HRIS systems also have an employee portal that each worker can use to access, update, and manage these types of details on their own. An HRIS is a fairly simple way to automate and improve your core HR functionality.

What is Human Capital Management (HCM)?

HCM practices aim to streamline human resource management using a full suite of tools and systems which often include an HRIS system. HCM is a more all-encompassing approach to organizational competency and optimization.

HCM Features

HCM systems include a wide range of tools that are designed to streamline talent acquisition, management, and optimization. These systems include:

  • Common HRIS features.
  • Onboarding tools.
  • Employee performance tracking.
  • Position control.
  • Global currency and language integration.
  • HR services.
  • Analytics.

The Benefits of an HCM System

An HCM system takes the functionality of an HRIS and builds upon it, offering enhanced features that are well-suited to midsize organizations. More comprehensive than an HRIS, an HCM solution will help you manage talent more effectively to get the best performance possible from every team member.

With an HCM, you’ll typically get features that help you track the specific performance and productivity of each employee. Position control features help you clearly identify the responsibilities of each role. Global integration adds different languages and currencies to the software so you can manage operations and partnerships overseas.

The more robust suite of HR services within an HCM will typically include in-depth analytics and a full HR portal with company policies, procedures, data, and documentation. 

What is a Human Resource Management System (HRMS)?

An HRMS takes an even broader approach to HR management, encompassing the features of both an HRIS and HCM while adding a few more perks of its own. The difference between HRIS and HRMS solutions is more notable than the difference between HCM and HRMS products because each builds on the next.

HRMS Features

  • Typical features of HRIS and HCM systems.
  • Payroll processing.
  • Time and labor management.

The Benefits of an HRMS System

The comprehensive suite of features that’s available with an HRMS is a must for most large organizations. However, even smaller companies can benefit from this wide range of tools. If you have a limited HR staff, an HRMS can help compensate by making it easier to manage employees throughout the business with minimal manpower behind the powerhouse HRMS system. You might also choose an HRMS for a midsize business so you can easily handle rapid growth without having to redesign your HR systems as you grow.

An HRMS system typically offers all the perks of an HRIS and HCM, along with automatic payroll processing and advanced time and labor management. This means that you can manage employee schedules, track project times, and identify key ways to improve productivity within a single system.

What is PeopleSoft HRMS

PeopleSoft HRMS is a workforce management solution for mid- to large-sized businesses. This HRMS system allows users to streamline every aspect of hiring, from posting job openings to screening applications, scheduling interviews, and managing onboarding. The application also helps HR manage employee information, benefits, taxes, and payroll.

PeopleSoft offers cloud integration so you can manage your company off-site as efficiently as you would on-site. This feature is particularly well-suited to our changing times where a growing number of employees are working from home, whether for quarantine or convenience. Working from the cloud makes employee information accessible in real-time anywhere that you have access to the internet. 

How to Choose Your HR Solution

Every business has its own unique needs to consider when selecting an HR solution. The first thing to keep in mind is that the terms HRIS, HCM, and HRMS are used loosely in many circles. Before you assume that an HRMS is more robust than an HCM, you should compare the specific features and functionality of both options. Some providers use the term HRMS loosely, applying it to solutions with more limited functionality.

As you’re researching your options, consider:

  • Future growth: Can this system grow with your company, or will you need to replace it in a few years?
  • Implementation: Are my employees equipped to adapt to this system?
  • Integration: How easily can we transfer our existing information into the new system?
  • Accessibility: Can we access this data from the cloud if the physical office is closed?

If you’re looking for a new HR solution for your company, contact Dimension Systems. We can help you evaluate your needs and identify the best solutions for your individual business.