What Is the Difference Between HRIS, HRMS, and HCM?

Many use the terms HRIS, HRMS, and HCM interchangeably to refer to any type of HR software. In the past, the differences used to be more distinct, but there are still some subtle differences between the three despite the overlap in features.

Human Resources Information System (HRIS)

HRIS stands for human resource information system. An HRIS is designed to help HR manage policies, procedures, and people and typically includes the following features:

Human Capital Management (HCM)

HCM stands for human capital management and is a broader term than HRIS. Typically, an HCM system includes all of the same features of an HRIS, but also includes the following:

Human Resources Management System (HRMS)

An HRMS is typically the broadest of the three types of HR software platforms. It usually includes all of the features of both an HRIS and an HCM as well as payroll and time & attendance tracking.

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What Does an HRIS Do?

An HRIS helps businesses by reducing the amount of time spent on HR processes by automating as many repetitive tasks as possible. This also helps to reduce costly errors by limiting the amount of manual data entry. Overall, using an HRIS can help a company save money.

How Does an HRIS Work?

An HRIS allows a company to plan its HR costs more effectively, as well as to manage and control them without needing to allocate too many resources toward them. In most situations, an HRIS will also lead to increases in efficiency when it comes to making decisions in HR. The decisions made should also increase in quality—and as a result, the productivity of both employees and managers should increase and become more effective.

Who Needs an HRIS?

An HRIS can be beneficial to even the smallest of businesses. HRIS platforms can save HR and business owners enough time that in many cases, they pay for themselves. It’s worth it to invest in an HRIS as soon as possible so that the software can scale with the company.

How Can You Choose the Right HRIS?

There are many HRIS options available, which can make the choice seem overwhelming. Fortunately, there are ways you can narrow down your options to only those that are likely contenders.

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Make Lists of HRIS Features Needs

The best way to narrow down the search is to start by making a list of features that are absolute necessities. These are the features that would solve the company’s worst pain points. Next, make a list of features that would be nice to have. These are the features that aren’t absolutely necessary but that would make things easier. The ideal HRIS would have everything on both lists, but having the lists separate will help to prioritize certain features over others.

Consider Your Future Needs

What you need today won’t necessarily be what you’ll need tomorrow. It’s important to think about what you may need in the future. The HRIS that best suits your company may be one that can scale as your company grows as well as offers the features you’ll need.

Another way to find the right HRIS for your company is to outsource the search process to a professional like Matchr. Matchr pairs top HRIS vendors with HR professionals based on criteria you enter into our free software matching tool. Trusting the process to a professional with more experience searching for HRIS and selecting the right one to meet specific needs can save you a lot of time and energy. Plus, you can avoid choosing the wrong HRIS, which can be a costly error.

What Types of HRIS Are There?

There are a lot of different HRIS solutions available and many offer similar features. These HRIS platforms fall into two primary categories: cloud-based and premise-based.

Cloud-Based HRIS

Cloud-based HRIS platforms are hosted off-site by the vendor and are accessed via the Internet. These systems are typically ideal for companies that are too small to have a dedicated IT department or that don’t want to have to worry about maintaining the system themselves. Cloud-based HRIS solutions also get automatic updates from the vendor that don’t need to be applied by on-site IT.

Premise-Based HRIS

Premise-based HRIS platforms are hosted by a company’s own IT department on its own servers. This requires a more robust IT infrastructure than many small businesses may have but can give a company more control over its HRIS solution and its security.

What Are the Benefits of HRIS?

The human resources department within any organization is considered to be highly critical for the entire organization. Its many functions serve as a supportive background for the company by providing everything from skilled and talented labor to management training services, employee enrichment opportunities, and more. Since labor is the single largest expense for most organizations, human resources helps companies derive the greatest value from this important asset.

In order to function optimally, however, human resources departments must have the right tools and resources in place. An HRIS can be utilized within the department to help human resources employees and managers improve their productivity and the results of their efforts.

List of HRIS Benefits

Benefits of HRIS include:

What Are Common HRIS Features?

While the features of different HRIS platforms vary, there are some that you can expect to find across practically all of them.

Automation

Automation is an important part of any HRIS. This is what helps to free up HR staff time and reduce errors. Data sharing and repeated processes can be set up to run automatically, reducing the amount of time HR professionals have to spend manually entering data or running these processes.

Integrations

HRIS platforms typically offer integrations with other software options, such as payroll and ATS platforms. This helps your new HRIS to fit seamlessly into the software infrastructure you already have.

Employee Self-Service

When employees wish to complete frequently recurring activities such as requests for time off or electronic pay stubs and changes in W-4 forms—such procedures can be taken care of in an automated fashion without the need for human supervision or intervention. As a result, less paperwork occurs and approvals, when designed, may be appropriated more efficiently and in less time.

Mobile App

Mobile apps can help to enhance an HRIS for both HR and for employees. They enable the software to be accessible from anywhere at the user’s convenience. Some HRIS platforms may have different versions of a mobile app for employees and for HR staff because of the difference in the features they need to access.

Reports and Analytics

An HRIS collects a lot of data as it’s used. A good HRIS will be able to take this data and compile it into useful reports and analyze the data to provide HR with valuable insights that could transform the company for the better.

What HRIS Challenges Do Companies Face?

Companies can immediately enjoy many HRIS benefits once the human resources information system has been implemented. There are several different types of HRIS systems available for purchase, and each may offer different features and functions. Companies should carefully review the different systems, vendors, and features available in order to find the right program for their needs and budget.

Choosing the Right HRIS

It is important to choose the right HRIS software. A company that takes the time to invest in an HRIS that fits its goals, objectives, mission, and values, is a company that is investing in its future and in its success. It will be necessary to customize any system to the unique needs of a company so the system will remain flexible and relevant throughout the life of the company or enterprise.

Implementation

Implementation can be a long, difficult process. However, finding the right vendor can significantly help with this. The vendor should be able to help you work through the entire implementation and be available to answer any questions that you may have along the way.

Data Security

Data security is something that every company should be concerned about. However, both types of HRIS can help to alleviate worries. Vendors of cloud-based HRIS platforms have robust security measures to keep their clients’ data secure. Those who prefer to manage their own data security can choose a premise-based HRIS instead.

Compliance

With rules and regulations changing frequently, compliance can be difficult to keep up with. Fortunately, HRIS solutions commonly include compliance management as a feature, enabling companies to more easily stay compliant no matter what has changed. With cloud-based HRIS, the vendor may also be involved in the process, sharing their knowledge.

Disruptions to Business

Implementing a new HRIS can be a big change. However, the right HRIS can help to alleviate this concern by working with a company’s preferred way of running HR processes instead of forcing everyone to change how they do things.

What Solutions Does HRIS Offer?

There are a number of solutions offered to a company that adopts an HRIS. Some of these include solutions in training, payroll, HR, compliance, and recruiting. The majority of quality HRIS systems include flexible designs that feature databases that are integrated with a wide range of features available. Ideally, they will also include the ability to create reports and analyze information quickly and accurately, in order to make the workforce easier to manage.

Increasing Productivity

While the HRIS features benefit the organization in many ways, one of the most important of all HRIS benefits relates to the ability of the software program to improve the productivity of human resources employees. These HR systems are highly detailed and they are designed to enhance and speed up the efforts of HR employees in a number of ways. For example, they can assist with recruitment by simplifying the process of collecting resumes, reviewing candidate information, and more.

Automating Tasks

HRIS systems can also be used to improve productivity related to financial management through payroll processing tasks and benefits administration. These and other related tasks may require numerous hours of manpower each week. However, the time and effort required to complete them can be drastically reduced when some of the tasks are automated through an HRIS system. Tasks that may have required many hours of labor may possibly reach completion very quickly and easily – or sometimes even done automatically – with the software program.

Reducing Errors

Many HR tasks are highly regulated, and because of this, even a minor error on the part of a human resources employee could result in considerable legal issues and even financial loss for the company. For example, when resumes are not reviewed in a fair and just manner during the hiring process, a lawsuit may ensue. An HRIS can provide guidance to avoid these types of issues before they escalate.

Maintaining Compliance

When considering HRIS benefits for your organization, the ability to reduce issues and other related errors associated with human oversight or other factors can be considerable. Furthermore, additional HRIS benefits relate to compliance issues. Some software programs are designed to review compliance with specific rules and regulations—this makes it easier to ensure that your company is in compliance with these laws and regulations. Ultimately, this can improve a company’s reputation and help to avoid penalties.

Performing Analyses

Performing analyses and reviewing metrics related to various aspects of the organization can assist with better decision-making and also help with spotting patterns. For example, the human resources department is responsible for analyzing hiring costs and calculating the turnover rate in different departments. The results of these calculations may be used to make important business decisions and to develop strategies for moving the organization along a successful path.

Improving Speed

HRIS analytical tools give HR employees the ability to perform many pertinent calculations with speed. Employees can collect the data needed within a short period of time and then analyze all of the data in a concise and effective manner. Some software programs are designed to create professional reports on metrics and analysis that can help HR professionals to spot issues at a glance.

Freeing up HR Time

Through the efficiency advantages conferred by HRIS systems, an HR administrator can obtain many hours of his or her day back instead of spending these hours dealing with non-strategic, mundane tasks required to run the administrative side of HR.

Paperless Records

Similarly, an HRIS allows employees to exchange information with greater ease and without the need for paper through the provision of a single location for announcements, external web links, and company policies. This location is designed to be centralized and accessed easily from anywhere within the company, which also serves to reduce redundancy within the organization.

Payroll

When a company invests in an affordable HRIS, it suddenly becomes capable of handling its workforce by looking at two of the primary components: payroll and HR. Beyond these software solutions, companies also invest in HRIS modules that help them put the full productivity of their workforce to use, including the varied experiences, talents, and skills of all staff within the enterprise.

Applicant Tracking

A range of popular modules is available, including those for recruiting, such as resume and applicant management, attendance, email alerts, employee self-service, organizational charts, the administration of benefits, succession planning, rapid report production, and tracking of employee training.

Matchr can help your company choose the best HRIS software solution available. Try our free HR software matching tool to find the perfect HRIS system today!


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