HCM vs. HRIS: the Essential Difference

Human resource offices handle so many tasks, it can be difficult to juggle them all. An HR team’s work spans from day-to-day workforce management to long-term business strategy. And in small businesses with no HR department, leaders often struggle to balance daily business operations, long-term planning and organizational development.

There’s been a growing need for HR solutions to help manage the day-to-day tasks — and a burst of technological growth to meet that need. Today, there are many options to help businesses cope with human resources functions. Depending on what a business needs, different levels and groupings of services can be tailored to fit the company.

With so many options in HR software & technology, it can be difficult to figure out what’s best for your team. A frequent question is: What are the advantages of HCM vs. HRIS?

HCM vs. HRIS

First, let’s define HCM (Human Capital Management) and an HRIS (Human Resource Information System). Then we'll give a detailed comparison.

An HRIS is a software suite, often cloud-based, that helps a company perform HR functions. By using an interactive system to collect employee data, an HRIS facilitates HR tasks through standardized recordkeeping and reporting. This assists companies with data analytics and more.

HCM is a philosophy that sees a company's employees as assets, rather than expendable units. An HCM software suite goes beyond basic HR functions to address things like talent recruiting, talent management, workforce training and employee engagement. Because of its expanded scope, HCM software frequently offers more robust reporting and analytics capabilities.

HRIS Services

An HRIS appeals to many companies because it empowers them to better carry out their own HR processes — without outsourcing to an HR administration company.

HR processes are all underpinned by one thing: employee information. With an HRIS, employee data is streamlined and synthesized into a single platform. From recruitment notes to exit interviews, employee data is securely stored and accessible with an HRIS. There’s no need to collect and recollect basic information. Common services provided by an HRIS include:

• Employee data management
• Time and attendance solution
• Payroll processing systems
• Employee recruitment, onboarding, and development solutions
• Benefits administration
• Performance and talent management solutions

An HRIS does not need to be a one-size-fits-all solution. For example, many HRIS allow HR staff to select based on your needs from different levels of services. What's more, companies can synthesize certain HR policies into their employee database to help them implement and internal standards.

HRIS Benefits

The time-saving benefits of outsourcing certain HR tasks can be significant. TriNet found that clients using an HRIS spent less time onboarding new hires and less time managing payroll and benefits. That frees up a lot of labor and hours to focus on strategic planning and high-priority workplace issues.

It can also assist in paying independent contractors. Here's a look at some key benefits.

Automation and efficiency

An HRIS can automate detail-oriented tasks, like onboarding and entering payroll data, helping to save HR teams or other staff members significant time and energy. An HRIS can also integrate with other business software systems, making it easy to work across departments and teams.

Centralized data enables easy, quick access

With an HRIS, companies can process HR data in one place rather than paying for several tools and using an application programming interface (API) so they can communicate. An HRIS keeps everything centralized for quick access to relevant data across departments. With a mobile app, employees also have user-friendly access to their data.

Access to the latest technology and information

A cloud-based HRIS system can be updated routinely by the provider, giving the client the most up-to-date technology available. You don’t no need an IT department to handle it. Likewise, the HRIS provider generally keeps their systems updated so businesses can comply with certain employment-related rules and requirements. This helps it to deliver reports and analysis on employee and organizational data, rather than relying on manual data collection and analysis.

Help for employees

An HRIS can help improve the employee engagement by:

• Helping employee access their HR information in one system
• Facilitating communication with their managers and peers
• Providing a system for managing their performance
• Helping them develop their careers with individualized learning paths.

A human resources information system also can improve the employee experience by giving self-service access. This access provides an easy and efficient way for employees to request time off and scheduling changes, elect benefit plans, and access HR-related information, such as employee handbooks.

HCM Software Services

HCM, or human capital management, is a shift in the philosophy of HR in the workforce. It views employees as resources, not as expenses. It focuses on big-picture problems like employee relations and workplace culture by addressing HR needs like training and development.

HCMs help companies invest in their employees. In general, an HCM suite builds on what HRIS does, offering cloud-based information services while encompassing a larger scope of services, including:

• Talent recruiting. By administrating candidates for review, HCMs can help find the top talent.
• Talent management. HCMs help companies retain talent in the workforce through training, development, and performance appraisals solutions.
• Workforce training. Companies can identify the most effective and relevant training for their staff centralized with an HCM.
• Employee engagement. Through training and reviews, HCMs can help boost overall employee performance.

The benefits of HCM

Using an HCM performance management solution, a company’s HR experience can noticeably shift toward employee development. This can help with turnover and greater employee retention. With rudimentary tasks like compensation management built into the system, HR staff are free to prioritize people again.

Let’s dive into the benefits of HCM software and see how it can elevate your HR strategy.

Improved efficiency

HCM software streamlines core HR processes such as payroll processing, benefits administration, and talent acquisition. Automation helps manage these tasks efficiently and helps to reduce the risk of errors, allowing your HR team to focus on strategic initiatives rather than administrative tasks.

Improved decision-making

With its robust analytics capabilities, HCM software gives business leaders actionable insights into employee performance and workforce trends. The data helps guide strategic decisions on talent acquisition, workforce optimization, organizational development, employee performance, and compensation and benefits programs.

Better training and development

Human capital management solutions improve training and development programs by providing tools to track employee progress and offering customized training resources. The results are: better employee performance, stronger career paths and a happier workforce.

Higher productivity and helps with reduce turnover

HCM software helps to boost employee engagement with feedback tools and recognition programs, fostering a sense of value and purpose in team members. This leads to greater productivity and helps with turnover rates.

Improved workplace culture

By promoting effective communication, HCM software can help you create a positive workplace culture. HCM software contributes to organizational development and higher employee satisfaction by helping companies recognize and reward employee contributions and by encouraging a supportive environment.

More employee development

Through its integrated platforms and communication tools, HCM software facilitates team collaboration. It also can enhance performance management and strengthens workplace relationships by promoting teamwork and employee development.

Manages employee data better

HCM solutions' centralized data helping to make it easier to access and update employee records in real-time. This comprehensive approach supports more accuracy, up-to-date data handling and streamlines HR operations.

Helps with HR compliance

HCM software can include features that helps your business navigate HR compliance. The automation helps with many of the tasks you’d otherwise need to do manually. It may also help align rest and meal break requirements with your company’s policy. This also can help save you time with information.

Responds to change

As your business evolves, your HCM software should adapt to new needs and trends. The best HCM software solutions offer scalability and flexibility to help accommodate changing workforce dynamics and industry demands.

Choosing a system

Each company must identify its own needs to choose the best HR software for its particular circumstance. By doing so, it can materialize a positive shift for its staff and the company as a whole.

Though there are key differences between HRIS and HCM, there can be a lot of overlap in services. Many HR platforms can incorporate analytics, recruiting, and performance management solutions into one HRIS. You can choose from a variety of HR platform configurations to add powerful tools, such as:

• Recruiting software. Recruiting, powered by JazzHR, helps teams streamline how they source, hire and onboard top talent. Automation makes it easy to create a job posting and publish it across multiple channels; helps you sort and track applicants through every stage of the recruiting journey; and helps new hires complete the onboarding process in minutes.
• Performance management solution. Choose from a library of templates for peer reviews, 360-degree reviews, self-reviews, and quick feedback reviews — all customizable. User-friendly tools help with goal setting, performance reviews, and one-on-one meetings. Plus, a mobile-first design gives employees and managers round-the-clock access.
• People analytics. Powered by Visier, TriNet makes it a breeze to help companies turn their HR metrics into charts that are easy to understand. You can see discrepancies within your workforce and areas for investment. If your goal is better retention, for example, it may be able to help identify potential workforce separation(s) and help you build programs to make those possible "at risk" employees happy.
• 401(k) solution. And when it comes to employee retention, adding a retirement plan solution can help to attract and keep top talent. This is another area where HRIS and HCM overlap. Our 401(k) administration services can help the strain of administrative responsibilities.  Plus, TriNet’s 401(k) plan fees are generally much lower than the industry average.
• Integrations. Explore our rich integration ecosystem to find how TriNet integrates with your existing systems, like Quickbooks, Xero, Google Drive, Slack and more. Data synchronization makes it easy and more productive to use apps for employee engagement, health and wellness, legal, identity providers, travel, and much more.

TriNet offers a personal product demo environment where you can play with our technology as much as you want. Upon request, we'll provide a unique environment where any changes you make to a workforce remain within your demo, undisturbed by other users also playing in the technology. Request your unique interactive, live demo link today.

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