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HRIS vs HCM vs HRMS: Understanding the Alphabet Soup of HR Systems

Ariel Thorne | August 27, 2021

If you have the difficult task of choosing an HR system for your company, you have likely done quite a bit of research regarding one solution or another. During your research, you may have encountered a bewildering array of acronyms for HR solutions, including HRIS, HCM, and HRMS. You may have also noticed that even solution vendors may not fully comprehend the distinction between these or indicate how their own solution should be classified.  

That confusion is what employers around the country navigate every single day. Maybe it’s even what you’re facing right now.

In theory, all HR systems are designed to help employers manage employees. However, the features on offer may differ greatly between different systems, so it can be hard to know which type of HR solution you need. . 

We’ve compiled this handy guide to help you understand the distinctions, from the most basic HR system to the most comprehensive among the group.

HRIS: The Basic Solution

HRIS stands for “Human Resource Information System.” Of the three categories of HR solutions, it is considered the narrowest and most basic in scope. The most basic purpose of an HRIS system is to streamline interactions between HR and employees, handling everyday issues and leaving HR professionals to perform more strategically challenging work. 

  • While HRIS systems may vary widely from vendor to vendor, core functions generally include: 
  • Recruiting/ATS (Applicant Tracking System)
  • Core Human Resources/Personnel Tracking
  • Benefit Administration/Open Enrollment
  • Absence Management
  • Compensation Management
  • Training and Development
  • Workflow
  • Self-Service Options (Candidate/Employee/Manager)
  • Reporting and Analytics

HCM: The Intermediate Option

HCM stands for “Human Capital Management.” Something of an intermediate option, HCM systems generally incorporate all the main features of HRIS systems, plus a few new ones. More international in scope, HCM systems are particularly associated with global capabilities–namely multilingual, multicurrency, country-specific formatting, or even localization. Talent management is also a key function of HCM systems.

  • Along with the features listed in the HRIS section above, you can expect most HCM systems to include:
  • Onboarding
  • Employee Performance
  • Analytics 
  • Position Control
  • Succession Planning
  • Salary Planning
  • Global Capabilities
  • Position Control/Budgeting 

HRMS: The Most Comprehensive Option 

HRMS stands for “Human Resource Management System.” Of the three categories, it is considered the most comprehensive in scope. HRMS systems will usually incorporate the functions of HRIS and HCM systems, although it should be noted that some HRMS systems lack a progressive talent management function. (If a talent management component is key to your HR vision, you may want to stick with an advanced HCM.) 

In addition, you can expect a true HRMS system to include the following features: 

  • Payroll Processing
  • Time and Labor Management (TLM)

A Tip about Choosing the Right HR System

Any of these systems will help you manage employees and streamline daily operations, but only you know which of these will be most beneficial for you and your business. Still, it’s important to have clarity on what you’re getting. Remember: Vendor definitions of these systems are not always consistent, so be sure to read the fine print regarding specific capabilities before you commit to a particular system.

Another Way to Streamline HR Functions

Beyond choosing the right HR system for your needs, there is another way you can streamline operations for your HR team. If your organization is like most others, one significant area where you can improve efficiency in HR is in the administration of your corporate health insurance plans.

EnrollMe is purpose-built to reduce the administrative burden on your HR team, increase HR efficiencies, lower costs, and simplify health insurance for everyone. EnrollMe lets yourHR staff focus more on humans, and less on health plans. 

Using a digital marketplace, EnrollMe makes it easy for employees to research and choose their own healthcare plans from a wide array of choices. That makes employees happier, but it also eases the strain on your HR team. Why not save time and effort for your HR team by letting EnrollMe do all the grunt work for your healthcare plan administration? See how you can level up your benefits by requesting a demo today!

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