Suppose you’re not familiar with Human Resource Information Systems (HRIS), Human Capital Management (HCM), and Human Resource Management Systems (HRMS). In that case, there are three software systems designed to provide the back-end support your HR department needs to help you run your business better and more efficiently. But how do they differ, and which one should you use? Let’s break it down…
Background on HR software
Running a business in the modern era is challenging work. This may be especially true regarding Human Resources (HR). In addition to finding, hiring, developing, and retaining the right people to make your company succeed, you must also navigate compliance issues such as employee privacy laws, data protection requirements, and workplace rights. Unfortunately, managing all this can leave you feeling like you’re chasing your tail from one task to the next.
That’s where HR software comes in. There are three types of HR software: HR Information Systems (HRIS), Human Capital Management (HCM), and Human Resource Management Systems (HRMS). All three systems automate administrative tasks like hiring, training, managing payroll, and giving out benefits, so you can focus on making decisions that will help your business grow.
Human Resource Information Systems (HRIS)
An HRIS will house your entire employee directory and process payroll. This is typically used by medium-sized to large-sized businesses. If you have more than 100 employees, an HRIS might be a good fit for you. Keep in mind that this may also include benefits like retirement plans, 401k’s, etc. It’s important to note that the most significant disadvantage of using an HRIS is the high cost.
In addition, it’s often difficult to find someone with the right skillset who can effectively manage the system and oversee its operation on a day-to-day basis. With all of these factors considered, it’s essential to weigh the pros and cons before deciding which type of software will work best for your business needs.
Human Capital Management (HCM) Software
An HCM system records important personnel information to provide insights into workforce management. These insights include employee demographics (age, gender), skill set assessment, and salary information.
HCM applications also include management features such as attendance tracking or time-off requests. In addition, this software can be bundled with payroll services through HR Management Software (HRMS) platforms to centralize various back-office activities in one place. Unlike organizations of all sizes, which often use HRIS, many large companies use an integrated package like this to streamline their workflow.
Companies needing Human Capital Management Systems but don’t want to purchase an expensive software suite may turn to standalone HCM solutions.
Human Resource Management Software (HRMS)
One of the newest aspects of human resource management is HRMS software. This software system is designed to make managing your company’s personnel more efficient. It takes all aspects of human resources and consolidates them into a single system.
A benefit of this type of program is that it has built-in features that you can customize to meet your specific needs. For example, with this software, you can track benefits information, unemployment claims records, and attendance at meetings and other events individually. Some even allow employees to update their personal information or skill sets to keep them up-to-date with current trends.
The main goal of these programs is to help your business run more smoothly and cut down on the time managers spend on administrative tasks. Without these programs, managers would have to take time away from important tasks that directly help the business run.
HRIS vs. HCM vs. HRMS
There is no one-size-fits-all solution to human resources. As such, it’s essential to understand the differences between the three most common software solutions in this area: HRIS (Human Resources Information System), HCM (Human Capital Management), and HRMS (Human Resource Management System).
The most important distinction you need to make when choosing which product to buy is who will use it. For example, if your organization has a centralized workforce with little turnover, an HRIS might be your best option. On the other hand, if you have a decentralized workforce with many people being hired or let go at any given time, an HCM might suit your needs better.
These products provide tools for tracking employee data like attendance and pay rates. Still, they differ in their ability to manage multiple groups of employees at once or allow you to do payroll on a global scale. The HRMS can handle both, so if you want to grow your business internationally or ensure each office is working efficiently, this might be the right choice.
Conversely, if you work with only a small group of people or want to make sure everything runs smoothly locally, an HRIS may suffice. An HRIS does not offer much more than rudimentary information about workers’ hours and wages. In contrast, an HCM offers more detailed insights into the actions taken by managers to maintain high-performance levels among employees.
Additionally, while both HRIS and HCM offer some reporting functionality, there are far more robust reporting features offered by an HRMS. For example, staff training or diversity hiring reports help identify trends in your company’s practices and areas where improvements could be made.
An HRIS provides payroll management without advanced automation options; an HCM includes payroll and administrative tasks; an HRMS includes all aspects of managing a workforce, including labor relations (managing compensation) and employment relations (regulating legal compliance).
Ultimately, the different types of software give you different advantages based on what kind of company you are running. ASAP Payroll provides all of the services you need to handle payroll:
- A fully compliant human resources information system (HRIS)
- An integrated human capital management system (HCM)
- An automated timekeeping solution
With these three features, your company can keep track of employee records, provide paychecks and benefits to your employees according to the needs of each plan or policy, comply with local laws and regulations, and even automate specific processes that would otherwise be manual. No matter what size your business is or how many employees you have on staff, we can help!
Check our website to learn more about our products and services so you can get the most out of ASAP Payroll’s HRIS, HCM, and HRMS software. Contact us today to find out how ASAP Payroll’s suite of HR solutions can help your business run smoothly.