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HRIS vs HCM: What Are They and How Are They Different?

  • February 26, 2018
  • VAIRKKO

With so many different acronyms floating around the human resources world, it is important to understand the difference between the different platforms and what they offer. Determining which platform to use and the goals that you have in mind for your organization through its use is important to selecting the right option. Not only are there many different vendors that offer these different solutions - but on top of all that, there are many different solutions that cater to varying problems. What one software solution has, yet another may not. In these times, it is important to do your research before ultimately selecting a vendor as onboarding and training costs can be prohibitive in the future to shifting solutions, not all software integrates with current processes, and ultimately, lacking functionality for everything you may need is a real worry.

An HCM: human capital management, it is a comprehensive set of practices for recruiting, managing, developing and optimizing the human resources of an organization.

So to begin with the definition of an HCM: human capital management, it is a comprehensive set of practices for recruiting, managing, developing and optimizing the human resources of an organization. An HRIS, or a human resources information system, is a a software or web-based solution for data entry, data tracking, and data information needs of the human resources departments, payroll, management, and accounting functions within a business. To us, that sounds like a bunch of mumbo jumbo to break down and understand the key differences when shopping around and determining what your organization really needs.

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Ultimately - let’s look at functionality and feature differences between the systems and that can help show how and HRIS and HCM are different. In an HRIS, the typical features are recruiting or an applicant tracking system, core HR, benefit administration, absence management, compensation, training, workflow, self-service, and reporting. Keep in mind that HRIS software typically cater to business that employ U.S. citizens only. Within in HCM, this piece of software has all the capabilities of an HRIS with additional features to include onboarding, performance management, position control, succession, salary planning, and analytics - not to mention, HCM are oftentimes created for the global economy.

To break this down into simpler terms, an HRIS is to manage people, policies, and procedures - unless those employees reside outside the US. Advanced capabilities can be found in an HCM which adds Talent Management functionality and features, as well as a global capabilities which include multilingual, multi-currency, and country specific formatting within the system.

To break this down into simpler terms, an HRIS is to manage people, policies, and procedures - unless those employees reside outside the US.

Laying out the differences in software this way, it is much easier to see some of the pros and cons of each of the software solutions and precisely why it is important to understand exactly what you need from your software in terms of functionality before agreeing to use any of the solutions.

Ultimately, whichever way you choose to turn when adopting a software solution to oversee human resources, either of these solutions incorporates some level of cloud computing, database storage, and differing functionality to create an overarching solution for workforce management needs. The software is meant to ease and manage the abundance of information that comes with human resources. While any solution that you ultimately decide on is very powerful, take into consideration what is necessary, what would be considered a bonus, and future plans before signing with any vendor.

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