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HR Technology: the Difference Between HRIS, HRMS and HCM

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“The domain in which HR tends to be the weakest is in understanding and applying technology to build HR”

― David Ulrich

As much as the aforementioned quote is true, so is the fact that there are too many pieces of new software being created by the day. Technology is evolving at a rapid pace and sometimes it is extremely hard to keep up, especially when it comes to understanding new acronyms, software types, and their efficiency.

HR technology is a mixture of information technology, human resource systems, and cloud computing. Different types of HR systems include Human Resources Information Systems (HRIS), Human Resources Management Systems (HRMS) and Human Capital Management (HCM). This article is going to cover the differences between these systems and explanations regarding their role in a company.

A bit of History

The first IT professionals who originally designed the basis for the HR software of today such as this one by Allay did not use incomprehensible acronyms for describing their product. This is only natural since the software they created were much simpler versions of today’s systems. In fact, programs that were created then, such as Personnel Software, Human Resources database, and background check systems are now integral parts of any serious HR system. Therefore, HRIS, HRMS, and HCM envelop all of the aforementioned. But how are these systems actually different?

The Subtle Difference

The difference between HRIS, HRMS and HCM is almost nonexistent. However, experts will agree that HRMS is one level above the HRIS and HCM. While HRIS is viewed as a system of mutually connected databases, HRMS additionally deals with the management aspect of the personnel included within the database. Therefore, HRMS is more comprehensive. When it comes to HCM, it is the same as HRIS with an added information regarding Talent Management, country-specific formatting, and localisation.

The point is that HR marketers nowadays have to use these acronyms to differentiate the seemingly similar concepts of HR systems. It is wise to have in mind that HRSM just built upon the existing HRIS and that HCM additionally deals with talent management. Although this is true, you will often see these terms used completely interchangeably. With this in mind, let us take a look at what are some of the key points that any of these systems should cover.

Key Functions of HR Systems

Since business owners need to have control over personnel as well as talent management, the points below are highlighted as some of the most important factors in getting the job done.

  • Tracking contact information (employees, applicants, new hires)
  • Reviews of work progress
  • Pay histories (bonuses, overtime)
  • Workforce requirements, new positions
  • Employee work hours (telecommuting, consulting, regular and overtime)
  • Tracking benefits
  • Goal tracking

What follows is a quick overview of the 3 different implementation methods of HR systems.

3 Main Implementation Methods

While it is important to research the company that will sell you its HR technology services, first you need to determine which method of implementation is best suited for your company.

  1. Subscription – This solution requires your company to pay an initial set-up fee after which you continue to pay a monthly amount for the subscription. The system is hosted and managed by the vendor offsite and usually comes with limited options for customization.  
  2. In-house – This solution offers more customization features and a one-time fee. The company’s in-house IT department handles integration is supported by the vendor.
  3. Hosted – This solution is a hybrid of the two. Your HR systems are in-house, but the maintenance and hosting are at a remote location, handled by the vendor.

Not That Complicated  

There are plenty of HR systems solutions and options to choose from, so you need to start doing your research right away. It is easy to  get lost in the sea of information and acronyms because the market is extremely competitive. However, there is no reason to fear technology, or it will do your company the world of good.

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