hr software solutions

When searching for HR software solutions, it’s easy to run across many different acronyms describing Human Resource systems. What do they really mean?

The Difference Between HRIS, HRMS and HCM

To both consumers and creators of these systems, there truly is no practical difference between HRIS, HRMS and HCM.

  • Human Resources Information Systems – HRIS
  • Human Resource Management Systems – HRMS
  • Human Capital Management – HCM

Despite the differing acronyms, all three describe the same system or systems: A suite of software, databases, and cloud computing which provide an all-encompassing solution for managing every aspect of a workforce.

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Technical professionals who originally designed the software and computing apparatus used slightly more descriptive and disparate terms to describe their work. Personnel software, Human Resources database and background check systems were all terms once used, but these days are seen as smaller, interlocking pieces of a more overarching collection of systems known as HRIS, HRMS or HCM. Marketers have taken to using these terms as they sound more sophisticated and give the impression of a complete package, rather than just “Employee Software” which may only handle a few aspects of hiring, tracking, management, payroll and the remaining myriad of applications within a workforce.

Despite the three terms often being used interchangeably, HRMS can sometimes be viewed as more comprehensive than HRIS or HCM systems. This possibly stems from HRIS originally being viewed as a system of interconnected databases, and HRMS landing a level above those interconnected databases that integrated further software solutions for personnel management. As time goes on, many distributors and authors of HRIS and HCM are simply rebranding themselves as HRMS without changing the product, thereby giving the impression that the three terms are truly interchangeable in the current environment.

What will one of these systems manage?

The goal of an HRIS, HRMS or HCM solution is to give a business owner control over each aspect of personnel and talent management. Some major points hit by nearly any well-respected system include:

  • Tracking contact information of both employees, applicants and potential hires
  • Work progress reviews
  • Pay histories, including bonuses and overtime
  • Identifying workforce needs and potential new positions required
  • Hours worked for each employee, including regular, overtime, telecommuting and consulting time
  • Benefit tracking
  • Career and employee goal tracking

What options exist for HRIS, HRMS and HCM?

Numerous companies selling hundreds of different systems exist, but before choosing one in particular, it will be more useful to determine which of the three main implementation methods are most beneficial for an organization.

  • Subscription Solutions: An initial set-up fee and periodic subscription fee allow a company to make use of a company’s HRMS or other similar system, hosted by the vendor, often with limited customization options, which is hosted and managed offsite.
  • In-house solutions: A purchase or license fee, often including substantially more customization than with a subscription solution, is paid. Software and systems are then implemented by a company’s in-house IT department, with support provided by the vendor.
  • Hosted Solutions: This is a hybrid of the two previous examples. In a hosted solution the software is still purchased or licensed, but is still implemented and hosted in a remote location and serviced by the vendor.

Human Resources systems, whether they go by the moniker of HRIS, HRMS or HCM are essential parts of a well-managed workforce in today’s economy. Just don’t expect to find any actual difference in the product because of a difference in the acronym.

Authored by: Dave Rietsema