Difference Between HRMS, HRIS and HCM Software

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Hris Vs Hrms Vs Hcm

HRMS, HRIS, HCM- This alphabet soup can stir the mind of anyone easily. They are so confusing that most of the employees and employers use these terms interchangeably, very conveniently.

But, all three of them hold a level of distinction from each other, they are not the same! 

Clearly, little or no knowledge pertaining to this when you are in the corporate world more so when you are an HR can become a reason of embarrassment for you.

Better late than never, if you didn’t get the time to do some research around this on your own, you have certainly landed at the right place.

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In this blog, we will cover:

  1. HRIS vs HRMS vs HCM- The Basics 
    • Full forms 
    • Why are they better than manual tools?
  2. What is an HRIS?
    • What are the advantages of HRIS? 
  3. What is an HRMS?
    • What are the advantages of HRMS?
  4. What is an HCM?
    • What are the advantages of HCM?
  5. Are these three terms- HRIS vs HRMS vs HCM replaceable?
  6. What are the must-have features in HRMS, HRIS and HCM? 
  7. Conclusion


HRIS vs HCM vs HRMS- The Basics 

Let’s start with their full forms: 

  • HRIS- Human Resources Information Systems 
  • HCM- Human Capital Management 
  • HRMS- Human Resource Management Systems 
Features HRIS HCMHRMS
Absence Management
Self-service Portal 
Recruiting 
Training & Development 
Compensation Management 
Personnel Tracking 
Workflows
Benefits Administration 
Employee Performance 
Position Control 
Global Support 
Onboarding 
Analytics 
HR Services 
Time & Labor Management
Payroll Processing 

Before understanding the HCM, HRIS and HRMS differences, you need to know that all these solutions comprise cloud computing, databases, and several similar features that simplify workforce management. 

After the Coronavirus pandemic, employers across India are clearly of the belief that HCM/HRIS/HRMS are nothing less than any blessing as they enhanced efficiency and overall HR management in the new normal. As a result, the talk of such systems taking over manual tools has been given a lot of importance and attention lately.

HCM/HRIS/HRMS V/S Manual tools

HCM/HRIS/HRMS Manual Tools
Every routine process can be completed in a tap Everything takes longer because of manual processes
Leaves no room for human errors Higher incidence of inaccuracies
Improves candidate/employee experience Relatively poor candidate/employee experience due to manual burden 
Take the complete burden off HR executives’ shoulders High level of stress/frustration on the HR team
Boosts the overall productivity, thereby improving the bottom line Ends up costing the organization more money due to inefficiencies


What is an HRIS? 

HRIS enables its users to manage, automate and track the core HR tasks. Traditionally, this is used to create a database center for employee information. Moreover, its primary purpose is to link the data to the respective employees, departments or office branches, or the company wholly. Besides performing this, HRIS software is also capable of doing reporting as well as for analytics at a basic level.

What are the Advantages of HRIS?

  • Integration of Data
  • 100% Accurate
  • Faster Data Extraction & Processing
  • Better Analysis & Decision Making
  • More Transparency

  • What is an HRMS? 

    An HRMS seems much like an HRIS. The hairline difference lies in the usability of both the software. The former is qualitative and the latter quantitative. Besides, executing all the tasks that an HRIS does, it also has the ability to gauge employee satisfaction/happiness/engagement and performance. Different HRMS have different tools to review the performance of employees and engage employees.

    What are the Advantages of HRMS?

  • Automates HR Processes
  • Saves Time for HR Managers
  • Protects Against Frauds
  • Manages Regulations
  • Promotes Employee Self Service
  • Did you know?  Many individuals call HRMS as HRMS system but it is wrong. The full form already includes the word “system” in it.


    What is an HCM? 

    HCM stands for Human Capital Management and a software tool that has all the HR software modules integrated into one as a suite is an HCM. Not only is it capable of performing all the tasks that HRMS and HCM software do but do that in the most optimized manner. In addition to all this, it can also be used to do succession planning. Such software goes beyond fulfilling the basic needs of HR and helps them stay better prepared for the risks and grab the opportunities ahead. The software can foresee the red flags and highlight the same to take action before it gets too late. It is a combination of the core and strategic functions of an organization. Such HR software helps in attracting, engaging, developing, managing, and retaining people. 

    What are the Advantages of HCM?

  • Manages Administrative Functions
  • Enable Organic Growth
  • Reinforces Engagement
  • Develops Talents
  • Tracks Attendance and Time
  • Now that you know what is HRIS and HRMS and the difference between HCM and HRMS, it is time to go ahead and discuss the next topic. 


    Are these three terms replaceable? 

    As we mentioned earlier, HRIS, HRMS and HCM are somewhat the same. A big question arises here- Then, why are they named differently? It is certainly due to the fast growth of HR solutions that eventually led to the unexpected creation of several terminologies along the way. Nonetheless, there are a few subtle differences between these three solutions. In simpler words, HRMS, HRIS and HCM are three restaurants that serve delicious food but different menus. 

    Today, a good number of vendors in the Indian market use these three terms interchangeably. This is the major reason why it is always important to check if a solution that is marketed with a particular name offers the necessary features or not. 

    Earlier, the differences between these systems were noticeable and marked. Systems were more focused and designed to cater to the particular needs of businesses. This in turn created a greater divide between the solutions as they concentrated on distinct factors.

    With industries progressing, this gap got shrunk. Instead of investing in multiple number of systems, companies shifted their focus to one-stop-solution models. 

    Certainly, one can never be sure what a term refers to today. So, companies should be mindful while getting any of the software.  


    What are the Must-Have Features in HRIS, HRMS and HCM? 

    When you find a software that offers the below mentioned 5 features, you should call it an HRIS:  

    • Employee data consolidation- This is like a digital roster of employees that contains the personal information, designation, contact details, professional details, and more. 
    • Payroll calculation- This pertains to salary calculations, deducting and withholding the right amount to give the benefits to the employees and keep your company compliant. 
    • Benefits management- This includes management of benefits like health insurance, life insurance or retirement benefits. 
    • Recruitment automation- Basic processes like posting jobs, tracking candidates, managing the candidatures, and managing online applications received.  
    • Time and attendance keeping- This keeps a tab on the work hours, absences, leaves of the employees and more.
    Do You Know? The HR Software Market was valued at USD 15.59 Billion in 2020 and is projected to reach USD 33.57 Billion by 2028, growing at a CAGR of 10.10% from 2021 to 2028.

    When you find a software with the following features, you should call it an HRMS: 

    • HR Chatbot
    • Overtime Management
    • Direct Deposit 
    • Scalable & Flexible 
    • Reporting &  Analytics

    When a system comes with the following features, you should call it HCM: 

    • Customizable 
    • Integration with Back-End Applications
    • Mobile Enabled 
    • Employee Lifecycle Management 
    • Employee Self-Service (ESS)


    Conclusion 

    All in all, this is how different three of them- HRMS, HRIS and HCM are from each other. We hope you are clear about HRIS vs HRMS vs HCM and are now in a better position to identify which HR software is what out of these. 

    So, do not hesitate to take a step ahead and invest in any one of them. Make sure to find a system that will create a more inclusive and productive work environment.

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    Mili Joseph

    Mili Joseph is a Content Writer at HROne. She completed her graduation in journalism and mass communication. Besides writing, she loves reading books and listening to music.

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