HRMS, HCM or HRIS? Which HR system is right for you?

The time has come for you to invest in an HR system. If it’s not puzzling enough that there are various tools to chose from, is there really a difference between an HRMS, an HCM and an HRIS? You’re not alone – we once had to ask ourselves the same question when determining what our HR software packages would offer! Surely, our colleagues must also need the information from our findings, therefore, we’re pleased to share them with you.

HRIS: Human Resources Information System

Historically, HRIS’ offer the fundamental features your HR team needs to automate many of your processes. They have built-in functions to streamline your recruiting efforts such as applicant tracking systems (ATS), absence management, training and development, all combined with the ultimate efficiency booster – workflows. Human Resources Information Systems have come a long way, though, as some now also offer Employee Self-Service (ESS), benefits administration, compensation management, customised reporting and a growing list of add-ons.

HCM: Human Capital Management

In addition to the essential HR functions above, to attain the most effective HCM, calculated talent management and people analytics are what is needed to substantiate your organisational strategy. An HCM system is designed to further set up your talent for success right from the gate with automated onboarding, performance and goal management, then brings them right through to succession planning. With these tools, productivity is increased, downtime is curtailed and you can be proactive about impending changes in your workforce. These are all efficiencies that will lend your HR team and management the time to analyse the collected data that will support your tactics.

HRMS: Human Resources Management System

Typically, an HRMS offers the majority of features indicated in the HRIS and HCM categories. They may also include time and labour management (TLM), as well as payroll processing automation. However, recent trends indicate that the categorisation of the HR software packages are shifting as they are each frequently substituted for the other.

Are all HR software packages created equally now?

No, they definitely aren’t. For instance, just because an HR system designates itself as an HRMS, it doesn’t mean it will have all the features of what was once built into a traditional HRMS. Before exploring which of the HR software packages may be the most advantageous for you and your team, deliberate upon your business needs and strategy to hone in on your priorities.

Which HR system is right for you?

Once you’ve determined which features are essential in your ideal HR system, formulate a checklist that segregates your must-haves from the nice-to-haves. Now, with this framework in hand, you’re ready to research HR software packages. So, what will it be – an HRMS, an HCM or an HRIS? Now that we’ve learned that they can each fall into the same bucket, we know that what matters is not how they’re classified – what matters is how well the one you choose supports your objectives.

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