Types of HR Systems: HRIS vs HCM vs HRMS

Rohit Rajpal

Rohit Rajpal

Senior editor

Parul Saxena

Chief editor

Last updated: September 30, 2021

The global HR software market is growing at a rapid pace. It is expected to reach $25.9 billion by 2023

The primary reason behind the growth is that the right human resource (HR) system helps companies streamline employee management. It also helps increase productivity and ensures statutory compliance. 

However, when it comes to choosing the right type of HR system, most companies get confused between HRIS, HRMS, and HCM. 

In this article, we will explain all three types of HR systems to help you choose the right one based on your business needs. Let’s get started. 

What is HRIS?

Typically promoted as a database, an HRIS (Human Resource Information System) software allows data entry and tracking for human resources, payroll, and accounting teams.

HRIS software includes all the basic capabilities required for end-to-end human resource management, such as recruitment, performance management, and employee development. 

In other words, HRIS software enables you to plan and manage your HR activities without allocating too many resources towards them. 

Functionality of HRIS

  • Recruitment and hiring: Post jobs, manage interviews, store resumes, and track candidate information 
  • Employee information management: Keep a record of each employee in your organization 
  • Absence management: Manage unplanned and unauthorized leaves
  • Training and development: Help employees enhance their skills
  • Benefits administration: Allow employees to enroll in health insurance, manage 401K, and monitor their information
  • Self-service portal: Provides employees the ability to manage and change their information (like phone number, address, etc.)
  • Compensation management: Manage paid time off, overtime pay, bonus, incentives, salary, and more

Popular HRIS Software

1- Namely

Namely is one of the easiest to use HRIS software. It offers extensive features expected from an HRIS software without compromising on the performance. 

namely dashboard

Features:

  • Employee profiles
  • Time-off and attendance tracking
  • Payroll reporting
  • Benefits management
  • Custom, real-time report generation
  • Employee feedback surveys

2- BambooHR

BambooHR’s HRIS system simplifies your HR procedures. It allows you to organize your data quickly and securely in one platform. Managers can hire, onboard, and store employee information using BambooHR

bamboohr dashboard

Features:

  • Store and manage employee details
  • Track HR information, such as employee training, job responsibilities, benefits, and more
  • Job posting across multiple career sites
  • Time tracking feature
  • Mobile app for employee self-service portal

3- Optimum HRIS

Optimum HRIS focuses on payroll, HR, and attendance processes. It gives you the flexibility to choose between on-premise and cloud-based deployment options.

optimum dashboard

Features:

  • One master file database
  • Integrated time and attendance management tools
  • Expense reporting
  • Payroll management (add-on)
  • Benefits management
  • Automate screening, interviewing, and hiring

What is HCM?

HCM (Human Capital Management) system provides tools that help in strategic workforce planning and analysis. It helps track how your employees’ are performing so that you can improve their efficiency. 

HCM includes all the functionalities of the HRIS system, plus global capabilities (like multilingual and country-specific formatting), analytics, and onboarding. 

Functionality of HCM

  • All the HRIS features
  • Talent management: Monitor each employee’s performance and productivity
  • Onboarding: Streamline the new employee joining process 
  • Analytics: automated data collection, data analytics, predictive analytics, and self-serviceable insights
  • Position control: Ensure that the right employee is working on the right project (based on his skill set and expertise)
  • HR services: Give access to company documentation, policies, and knowledge base
  • Global: Supports international needs, such as multilingual and multi-currency

Popular HCM software

1- SAP SuccessFactors

SAP SuccessFactors is ideal for companies of all sizes. It provides end-to-end integrated HR solutions that address all the challenges companies face. 

sap successfactor dashboard

Features:

  • Workforce planning
  • Analytics
  • Performance management
  • Goal tracking
  • Employee development
  • Onboarding

2- Oracle HCM Cloud

Oracle HCM Cloud is a complete solution that connects every HR process from hire to retire in one platform. Built on artificial intelligence and machine learning, Oracle HCM Cloud simplifies complex global HR processes.

oracle hcm cloud dashboard

Features:

  • Talent management
  • Advanced and predictive analytics
  • Integrated and embedded analytics
  • Employee lifecycle management
  • Tax management
  • Learning and development

3- Workday HCM

Workday HCM is a cloud-based human capital management software designed for workforce planning, analysis, and execution. Its machine learning base helps you curate recommendations and suggest learning to increase employee engagement.

workday hcm dashboard

Features:

  • Time, attendance, and PTO
  • Employee lifecycle management
  • Onboarding
  • Payroll (401K, vacation tracking, and tax compliance)
  • Self-service portal

What is HRMS?

HRMS (Human Resource Management System) can handle the most complex HR responsibilities such as expense claims, automatic leave approval/rejection, and employee progress. 

HRMS software includes all the features of HRIS and HCM systems. It is more comprehensive than other systems on this list. 

Functionality of HRMS

  • Most features of HRIS and HCM
  • Payroll: Calculate employee salary, deduct taxes, and send direct deposits automatically
  • Time and labor management (TLM): Manage employee schedules and track project times to increase productivity
  • Performance Appraisal: Track relevant employee performance metrics to determine who to provide appraisal and how much

Popular HRMS software

1. Pocket HRMS

Pocket HRMS is a cloud-based human resource management software that allows you to automate repetitive HR operations. It uses artificial intelligence to interact with employees without the intervention of HR personnel. Its features include:

pockethrms dashboard

  • HR process automation
  • HR chatbot
  • Mobile payroll app
  • Intelligent reporting
  • Tax compliance
  • Wearable technology integration

2. Humanware HRMS

Humanware offers cost-effective HRMS software to companies. It collects and organizes all the employee data throughout the employee lifecycle to help manage your talent pool.humanware hrms dashboard

Features:

  • Bonus, loan, and advances management
  • Task management
  • Travel management
  • 360-degree feedback
  • Chatbot
  • Exit management

3. Nitso HRMS

Nitso HRMS is a comprehensive human resource management software that covers the entire employee lifecycle. It has an employee self-service portal that allows employees to access their company profile and execute job-related tasks as per their convenience. Nitso HRMS dashboard

Features:

  • Asset management
  • Integration with biometric
  • Compliance management
  • Salary adjustment
  • Resource cost estimation
  • Employee lifecycle management

Which System Should You Choose? 

Your choice of system depends on your business needs. Just because HRMS consists of all the features of HCM and HRIS, it doesn’t mean it is the perfect solution for you. Extensive features come at an extra cost. 

Since you will be charged for the software each month, it is essential to keep the budget in mind when choosing an HR system for your business. 

The final call about the best system lies in research. Determine what features are the most important for your business. Also, follow the best practices when buying HRIS, HCM, or HRMS software to get the most out of your investment. 

Which type of HR system do you use in your organization? How is your experience with your current HR system? Please let us know in the comments.  

Rohit Rajpal
With more than two years of experience in writing, Rohit Rajpal has been helping brands improve their online presence with easy to understand content. When he is not writing, he's busy reading about digital marketing and copywriting. On the other side, he runs his own blog called Learn SEO Pro.

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