HRIS vs. HRMS vs. HCM—top HR acronyms explained

The world of human resources technology has several acronyms that can be confusing for anyone new to the field. Three common acronyms that can be particularly overwhelming are HRIS, HRMS, and HCM. While they all refer to forms of HR tech available to organizations, the tech they refer to have subtle differences.

In this article, we'll explain what each of these acronyms stands for and how they compare to one another.

Human resource information system (HRIS)

HRIS is a software system that automates core HR functions and administrative tasks. This software helps business owners and HR professionals with employee data management. Common HRIS features typically include employee records, such as employee contact information, job titles, and performance evaluations. It can also support an organization’s payroll and attendance.

An HRIS should include the following common features and functions:

• An employee database
• An employee self-service portal
• Benefits administration
• Payroll management
• Employee engagement
• Performance management
• Applicant tracking systems (ATS)
• Hiring processes
• Workflow, scheduling, or resourcing

Some popular HRIS systems include:

• Paycor
• Rippling
• Gusto
• BambooHR
• Workday
• Namely
• Eddy
• ClickUp

Benefits of HRIS

HRIS software is an essential tool for HR professionals. It helps you manage your workforce more efficiently and accurately. It can also improve the employee experience. Plus, the data you collect with an HRIS gives valuable insight into your organization. You can use its reporting capabilities to work toward your business goals and objectives. According to ADP¹, some HRIS providers also have monitoring capabilities. This can help you maintain compliance with changing regulations and data security.

Human resource management system (HRMS)

HRMS is a comprehensive software system that combines HRIS with a wide range of other features. Standard features include employee time tracking, employee performance management, recruiting, employee onboarding, and talent acquisition. HRMS helps HR professionals manage all aspects of their workforce. From the recruitment process to retirement, HRMS supports the entire employee lifecycle. This system is more complex than HRIS and is often used by larger organizations with more HR needs.

Some examples of HRMS software providers include:

• Rippling
• Trinet
• Paycor
• Paycom
• Workday
• Justworks
• Deel
• BambooHR

Benefits of HRMS

HRMS stores important information all in one place so it's easily accessible. It also saves you time by automating many classic HR functions. Plus, it can drastically increase employee retention by improving hiring, onboarding, and training. The eLearning Industry² found that 92% of employees say well-planned and executed training positively impacts their engagement level.

Human capital management (HCM)

Human capital management (HCM) is a broader concept than HRIS or HRMS. It includes HRIS and HRMS but also focuses on using data to drive decisions about people management.

It's an approach that emphasizes workforce management rather than just the administrative functions of HR. HCM covers everything from attracting and retaining top talent to developing employees' skills and creating a positive company culture. HCM systems often include features such as workforce planning, talent management, and succession planning.

It encompasses recruiting and onboarding, employee development and training, employee compensation, employee benefits, and other areas like diversity and inclusion initiatives.

Here are some popular HCM systems:

• BambooHR
• Rippling
• Deel
• UKG Pro
• Proliant
• TalentHR
• Workday
• Paychex Flex

Benefits of HCM

According to IBM³, the greatest benefit of HCM is it allows organizations to get the most value from their employees. On top of simplifying HR duties, it can help match the right employee to the right job. It can also increase productivity, reduce costs, increase return on investment (ROI), and boost employee satisfaction.

How they compare

Essentially, HRIS is more focused on data management, while HRMS and HCM are broader in scope and offer more extensive functionality. But different systems come with different features.

Here's a general summary of each tool:

• HRIS refers to software organizations use to manage employee data, such as personal information, job history, and benefits.
• HRMS is a broader term that encompasses HRIS but also includes additional features such as performance management and payroll.
• HCM is another term often used interchangeably with HRMS. It also includes talent management and workforce planning.

Additional software to invest in

Beyond these software solutions, you should consider other HR software that can make your life easier.

When it comes to employee benefits, administering them on your own can be time-consuming and confusing. That’s why PeopleKeep offers personalized employee benefits administration software. With PeopleKeep, you can develop a personalized health benefit plan that reduces administrative work. It can also increase your organization’s employee satisfaction, retention, and recruitment.

With help from our dedicated team, you can easily offer your employees a health reimbursement arrangement (HRA) with our software.

PeopleKeep enables you to set up any of the following HRAs:

• Qualified small employer HRA (QSEHRA): A QSEHRA is for small employers with 50 or fewer full-time equivalent employees (FTEs). It's an alternative to group health insurance that allows you to offer health benefits on a budget.
• Individual coverage HRA (ICHRA): An ICHRA is for businesses of all sizes. This flexible health benefit has no maximum contribution limits, and you can vary allowances and eligibility by class.
• Group coverage HRA (GCHRA): You can offer a GCHRA to supplement group health insurance. This helps employees with their out-of-pocket expenses.

These perks can make a big difference in your organization. Our 2024 Employee Benefits Survey Report found that 81% of employees say that the benefits package an employer offers is an important factor in whether applicants accept a job.

Conclusion

While HRIS and HRMS both focus on managing employee data, HRMS is a more comprehensive system that includes additional HR functions. HCM, on the other hand, is a broader approach to managing human capital that encompasses a range of HR activities, from attracting and retaining talent to developing employees' skills.

Understanding the difference between HRIS, HRMS, and HCM can be confusing at first, but it is essential for HR professionals to know the distinctions. By knowing which system or approach is best for your organization's needs, you can ensure that you are effectively streamlining core HR processes and setting your business up for success.

Ready to offer health benefits to your team? Our HRA administration software can help. Schedule a call now with an HRA specialist!

This blog article was originally published on June 28, 2023.

1. https://www.adp.com/resources/articles-and-insights/articles/w/what-is-hris.aspx
2. https://elearningindustry.com/the-unsuckification-of-learning
3. https://www.ibm.com/topics/human-capital-management#:~:text=HCM%20simplifies%20human%20resource%20duties,ROI%2C%20and%20boosting%20employee%20development