HCM vs HRIS are more of the same thing with different scopes. These words are used alternatively. However, if we dig down, we can look at some differences. As the world progresses, everything is getting easier, quicker, and more efficient.
This has increased competition and increased output while utilizing the same resources. With time, we have made systems that have been a breakthrough in their times. As the usage increased, more and more drawbacks and issues weaknesses were identified. This led to the release of new and new software’s with more advanced features and capabilities.
Similarly, Human Resource Information Systems (HRIS) were introduced and were extensively implemented and used across organizations. With the passage of time, HRIS became a necessity, especially for large organizations. Soon, the users started to realize its limitations. With the increased demand in the market, Human Capital Management (HCM) Solution was introduced as an advanced version of HRIS.
HRIS were started as data banks or helped in data management but with the passage of time, more and more features such as employee management, recruitment management, benefits administration, and payroll management system, were added to it. Let’s dig deeper into how they both are similar and what are the key differences between HRIS & HCMS.
First of all, Every HCM is HRIS, but not every HRIS is HCM. Have a look at the following diagram to understand this relation;
HRIS is a standalone solution that provides core HR functionalities but HCM is a fully comprehensive solution that offers all the functionalities of HRIS plus more advanced features that helps in strategy making and implementation.
HRIS contains employee management, attendance management, payroll management, and benefits management while HCM has all of them plus talent management, successor planning, career path planning, trend analysis, etc.
While HRIS help in planning up to some lower extent, they mainly help in record keeping, HCM comes with detailed insights that are very helpful in planning and controlling the organization. HCMS can help managers take strategic decisions by digging down into employee-level stats. HCM covers all the aspects of Human Resource departments. It can simplify more complex tasks while tracking even the most specific or smallest of the aspects or functions of HR. HCM streamlines all the processes and gives in more automation.
HRIS helps in supporting the day-to-day tasks while HCM help in strategizing the process that maximizes talent utilization.
HRIS or HCMS, What Should You Choose?
If you are a smaller business or a startup with just a few employees in the beginning and small capital, it is highly recommended to use HRIS as HRIS wins if seen from a financial perspective. HCM companies such as FlowHCM offer HRIS in the form of HCM with basic modules.
The benefit of this offering is that when companies have a need to expand, they will simply get an additional module added to core HCMS which will save them some cost as well as the hurdles that comes during data migration. The major flaw of HRIS that businesses have to face is that they might not be able to analyze the performances of their employees.
However, it is important for companies to make financially right decisions as well. That is why HCM with basic modules will give them full benefits because when there will be a need for complete software with full benefits and in-depth performance evaluation, they can simply get it upgraded through the same company.
As larger organizations have thousands of employees and complex organizational structures, they must always use HCMS with full features and advanced modules. The HR managers can make use of trend analysis and talent management features that would otherwise take days to manage.
Evaluating performances and career planning’s are amongst the most critical part of HRM. With the use of HCMS, larger organizations can make sure that the right talent is promoted to the right place with the right timings and planning. HCMS can help enterprises in scaling their system which is the main goal of any business. Even the smallest of decisions have a big impact on larger businesses. That’s why it is important for the management to make data-based decisions which they can make thanks to HCM.
The choice between Human Capital Management System (HCM) and Human Resource Information System (HRIS) depends on the size and complexity of the organization. For small businesses and startups, HRIS is a more economical choice that provides basic HR functionalities.
However, for larger organizations with complex structures and thousands of employees, HCMS is the recommended option with advanced features such as trend analysis, talent management, and career planning. HCMS allows for strategic decision-making and helps enterprises scale their system.
The advanced modules in HCMS provide a more comprehensive solution that maximizes talent utilization and streamlines HR processes. Ultimately, the choice between HRIS and HCMS should be based on the needs of the organization and the goals they wish to achieve