What is the difference between an HRMs, HRIS and an HCM for software technologies is something many clients often ask. These acronyms have confused many in the industry as vendors, marketing professionals and analysts seem to interchange the use of these terms when marketing their technology solutions.
In this fast growing market there are lots of other acronyms being used to describe HR software solutions such eg:HRM (Human Resource Management), TMS (Talent Management System), ATS (Applicant Tracking System) and LMS (Learning Management System) but the most common still are :
- HRIS (Human Resource Information System)
- HCM (Human Capital Management)
- HRMS (Human Resource Management System)
So, what’s the difference between these types of HRIS systems: HRIS vs. HCM vs. HRMS?
The major functional differences between the three acronyms and what functionality that should be associated with each are shown below:
HRIS (HUMAN RESOURCE INFORMATION SYSTEM)
HRIS software is designed to manage people, policies and procedures. Unless the employees reside outside the U.S., the majority of vendors pitching HRIS only cater to businesses that employ U.S. citizens.
- Recruiting / ATS (Applicant Tracking System)
- Core Human Resources
- Benefit Administration /Open Enrollment
- Absence Management
- Compensation Management
- Training & Development
- Self-Service (Candidate / Employee / Manager)
HCM (HUMAN CAPITAL MANAGEMENT)
HCM software includes every element of an HRIS, but adds Talent Management and global capabilities such as multi-lingual, multi-currency, country-specific formatting and possibly localization.
- Performance and Goal Management
- Position Control / Budgeting
- Succession Planning
- Salary Planning
* Learning Management System (LMS) – This functionality is not typically part of an HCM since the primary purpose is the actual content and delivery of e-learning vs. the technology or the mechanism to track employee development.
HRMS (HUMAN RESOURCE MANAGEMENT SYSTEM)
HRMS software providers typically cover every element of an HRIS and many include the capabilities of an HCM. Because the HRMS business is so massive and covers such a wide range of employee size and functional requirements, not all HRMS providers have a progressive Talent Management component included in their offering. Some of the HRMS vendors look like this [HRIS + (Payroll + TLM) = HRMS] while others have built their offering to look more like this [HCM + (Payroll + TLM)]. Two characteristics of any true HRMS are the following:
- Time & Labor Management (TLM)
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