HR Tech Terms: HRIS, HRMS, and HCM
Does it Matter?
May 22, 2024
By Chris Harvey
HRIS, HRMS, and HCM all have slightly different meanings. We will define the terms below. However, more and more, the terms are used interchangeably to mean a core HR tech solution that may or may not include payroll, timekeeping, ATS, performance management, etc.
To check the real-world usage of these terms, we conducted an informal survey of HR professionals on what terms they use most often and what they prefer:
- 68% prefer HRIS
- 22% prefer HCM
- 3% prefer HRMS
- 7% prefer People Systems
Among the myriad of HR tools available, three key systems configurations stand out: HRIS, HRMS, and HCM. While these acronyms have been used interchangeably, each represents a distinct solution with unique functionalities and value propositions.
Let's delve into more formal definitions of what each term means and how they compare to each other. In the end, it appears you can choose the term that you are most comfortable with, and HR professionals will understand you are referring to HR technology that is fundamentally core HR at the center.
Defining the Terms
HRIS (Human Resource Information System)
HRIS stands for Human Resource Information System. It's a software solution designed to manage people, policies, and procedures. An HRIS primarily focuses on the core administrative tasks associated with HR. This includes:
- Employee data management (personal details, employment history, etc.)
- Payroll processing
- Attendance tracking
- Benefits administration
- Compliance reporting
Essentially, an HRIS is a central repository for employee information, ensuring data accuracy and regulatory compliance. It automates routine tasks, reducing manual workload and minimizing errors.
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HRMS (Human Resource Management System)
HRMS, or Human Resource Management System, builds upon the functionalities of an HRIS. It includes all the features of an HRIS but adds more advanced capabilities such as:
- Talent management (recruitment, onboarding, performance appraisal)
- Learning and development (training programs, skill assessments)
- Workforce management (shift scheduling, labor forecasting)
HRMS solutions are more comprehensive, addressing both the administrative and strategic aspects of HR management. They facilitate better decision-making by providing insights into various HR metrics and trends.
HCM (Human Capital Management)
HCM, or Human Capital Management, represents the most holistic approach to managing an organization's workforce. It encompasses all the functionalities of both HRIS and HRMS but with a broader, more strategic focus. HCM aims to optimize the overall workforce strategy and includes:
- Strategic workforce planning
- Succession planning
- Comprehensive analytics and reporting
- Employee engagement initiatives
- Advanced talent management features (leadership development, career pathing)
HCM solutions integrate HR processes with broader business strategies, emphasizing the alignment of human capital with organizational goals.
Comparing HRIS, HRMS, and HCM
- HRIS is primarily administrative. It focuses on managing employee data, payroll, and benefits. Its value lies in its ability to streamline and automate basic HR processes, ensuring compliance and reducing manual errors.
- HRMS extends beyond the administrative scope of an HRIS to include talent management, learning, and development. It adds a layer of strategic functionality, helping HR departments not only manage data but also nurture and develop talent. Most HR Technology solutions available in the market would fall into HRMS category.
- HCM takes the functionalities of both HRIS and HRMS and integrates them with comprehensive, strategic HR and business processes. It focuses on maximizing employee performance and aligning HR strategies with overall business objectives.
In the end….does it matter what term you use? In practical use, probably not. However, it is always a good idea to know how the terms have been defined. Ultimately, understanding the nuances of HRIS, HRMS, and HCM can help you choose the solution that best fits your organization's needs and strategic goals.