HCM vs. HRIS vs. HRMS: which HR solution is right for you?

Choosing the right HR software can be challenging due to the various options and their unique features. In particular, many struggle to distinguish between HRIS, HCM, and HRMS software.

Although these three systems share similarities, key differences set them apart;  if you choose correctly, you’re more likely to optimize your HR processes. Besides improving your operations, the right system can positively impact company culture by enhancing the employee experience and driving engagement.

Our article aims to clarify the differences between human capital management (HCM), human resources information system (HRIS), and human resources management system (HRMS) software and explore their best use cases. Through this analysis, you’ll better understand how each system can support your HR function.

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HRIS vs. HRMS vs. HCM: a quick overview

Before we dive into our more detailed comparison, here’s a look at the usual features of each type of HR technology.

Note that capabilities alone don’t determine if a platform is an HRIS, HCM, or HRMS. Many solutions may include or lack specific tools, but this breakdown gives you an idea of what to expect. 

What is a human resources information system (HRIS)?

HRIS stands for human resources information system. These platforms are designed to streamline core human resources and financial processes, improving the efficiency and accuracy of your operations.

The software works by centralizing and automating various HR tasks. It typically includes a database that stores all employee-related information, such as personal details, job history at the company, and payroll data. Leading solutions like Leapsome allow all employees to access the HRIS with a secure login to view and update their own records — you can think of the system as a single source of truth for your organization. And since HRIS platforms contain people’s personal information, it’s essential to choose software that has granular controls and permissions so team members can only see what’s necessary for their role.

An HRIS also automates routine tasks like attendance tracking, payroll processing, and payslip distribution. HR team members and administrators can maintain control and oversight over the system by checking and approving operations.

‍Organizations of different sizes and stages of growth can benefit from an HRIS. For example, if you work for a small business and are just setting up your HR function, an HRIS can provide you with an initial framework to empower you to make the most out of your time and resources. And if you’re part of a medium-sized or larger company, you may be outgrowing the manual processes and ad hoc systems you relied on in the past. In that case, an HRIS would help you centralize and streamline your HR function and make sure nothing slips through the cracks as you scale.

By implementing an HRIS, your HR department can spend less time on administrative tasks and allocate resources more effectively. You can give team members more scope to focus on high-value initiatives, like improving engagement levels or recruiting exceptional talent.

💡 A great HRIS can positively impact company culture. Research shows that teams are significantly more engaged when they do meaningful, varied work instead of repetitive, routine tasks.

Main features of an HRIS

• Information system — A centralized resource for employee data (like payroll documents, attendance records, and contact details).
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• Time tracking — Tracking working hours, overtime, and PTO. These tools usually allow you to add and approve leave requests.
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• Payroll — HRIS platforms can offer different tools like automated payroll processing, payroll policies, payroll compliance management, and payslip distribution.
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• Self-service capabilities — Great HRIS software allows employees to carry out tasks like amending their personal information, applying for leave, and accessing paying stubs.
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Benefits of an HRIS

While HRIS platforms vary a great deal, they’re ideally:

• Easy to implement and use
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• Customizable platforms that work well with diverse tech stacks
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• Cost-effective solutions
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• Helpful for team members across all levels of the organization
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• Flexible in terms of admin commitment
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Drawbacks of an HRIS

• Many traditional HRIS platforms are limited to core functions — however, Leapsome’s HRIS seamlessly integrates with your other people processes (like performance and goal management, as well as learning)
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• Possibly not robust enough for enterprise-level organizations

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Leapsome designed its new HRIS with employees in mind, nurturing a great employee experience and reducing admin work.
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What is a human resources management system (HRMS)?

Similar to an HRIS, a human resources management system (HRMS) usually has many automation and data consolidation functionalities. However, an HRMS may help you manage additional workflows.  For example, organizations that are having trouble managing recruitment, hiring, and onboarding on a decentralized, ad hoc basis are likely to find an HRMS appealing. It’s also often possible to set up automatic triggers and requests for approval at different points for extra efficiency and oversight.

Most sophisticated HRMS platforms allow people teams to manage all the different hiring phases in one place. That means job posting, candidate sourcing, applicant tracking, interview scheduling, onboarding, offer management, as well as analytics and reporting. 
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Main features of an HRMS

Besides the features that are typical of a traditional HRIS, an HRMS (and sometimes a more comprehensive HRIS) usually has tools for:

• Recruitment — Tools for job postings, resume analysis, interview scheduling, and automated candidate communications, ensuring a streamlined hiring experience.
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• ‍Onboarding — Workflows for adding new employees to the system, including document management and training. Leapsome’s comprehensive HR platform includes these features, as well as self-paced courses that team members can use to work their way through the onboarding process.
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• Training and development — HR team members and managers can build learning pathways from scratch, access ready-to-use courses and learning materials, and assign training to employees.
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• Performance management — Features that enable team leads to plan, schedule, and store notes on appraisals. Comprehensive platforms also allow managers to set up automatic cycles so reviews happen at regular intervals with minimal administrative work.
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• Anonymous surveys — Questionnaires in a range of formats that HR teams can use to gauge sentiment and uncover workplace issues. Research indicates that surveys are currently the most popular way of gathering employee feedback and perspectives. 
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Benefits of an HRMS

• Comprehensive HR functionality, including talent management
• Can significantly reduce people teams’ administrative workload
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Drawbacks of an HRMS

• More complex onboarding, setup, and maintenance processes
• Can be expensive
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What is human capital management software (HCM)?

Human capital management (HCM) platforms take a holistic approach to workforce management. They’re robust solutions that aim to align all your organization’s operations and initiatives with your overall HR strategy.

The most distinct feature of an HCM is its especially comprehensive feature set. For example, succession planning capabilities are typical of HCM platforms and are not commonly found within other similar HR solutions. That means people team members would be able to do things like position mapping, role analysis, skill- and competency-specific evaluations, high-potential identification, talent pool management, and scenario planning.

When it comes to software features, an HCM is likely to have robust integrations and analytics tools. These mean you can share data seamlessly throughout your system and turn it into actionable insights. Most HR leaders agree that data analytics leads to better business outcomes.

As such, an HCM is best for an enterprise-level organization with a large, distributed workforce. You gain the ability to coordinate complex processes across different departments, ensuring that each initiative contributes to your overarching company goals. Meanwhile, you remain connected to employees by having increased visibility into their performance, development, and engagement levels. 
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Main features of an HCM

Alongside the features that HRIS and HRMS platforms typically have, you can find:

• Succession planning — Workflows that enable you to plan horizontal and vertical movements within your company. Advanced tools allow you to sync with other software in your tech stack and plan promotions that align with both strategic objectives and employee wishes.
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• Integration with business systems — Support for other advanced solutions, typically IT and finance. They might be standalone systems or modules you can add on.  
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Benefits of an HCM

• Advanced integrations with business systems
• Suitable for enterprise-level organizations
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Drawbacks of an HCM

• Most costly option
• Involves long-term commitment and often a steep learning curve
• Requires a lot of setup and maintenance
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What’s the difference between HRIS, HRMS & HCM systems?

Many people use the terms HCM, HRMS, and HRIS interchangeably because all three systems can have overlapping features. They appear very similar at a glance. After all, each software supports HR teams with their core administrative and data management tasks.

‍The key difference lies not in the individual tools but in the scope, focus, and complexity of each system. Understanding these distinctions can help you choose the right HR technology for your organization’s circumstances and requirements.

HRIS, HRMS, and HCM software tend to cover different feature sets — although they increasingly encompass features outside of their standard scope. Here’s a summary of what you can expect:

• HRIS — Covers core HR functions like payroll and data management
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• HRMS — Expands HRIS capabilities to include talent management
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• HCM — Integrates HRMS and HRIS features while adding advanced integrations and complexity layers for enterprise-level organizations

To decide on the best HR solution for your organization, consider your size, structure, priorities, and goals. If you work for an enterprise-level multinational company, you’ll likely need to invest in an HCM that can handle the intricacy of your operations and provide all the advanced features you need. If you’re specifically looking for workflows related to recruitment and talent management, an HRMS is likely your best bet. 

‍An HRIS that integrates well with people enablement processes — like Leapsome’s new tool — will have the most well-rounded strategic impact and is the best route for most businesses. Best of all, we designed our HRIS with common HR challenges and frustrations in mind, ensuring our platform would fit seamlessly into your existing tech stack and be simple to customize to fit your needs.
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Putting people at the center of software decisions

Understanding the differences between HRIS, HRMS, and HCM software can help you choose the best HR platform for your business. However, that information is just the beginning. The key is to cultivate in-depth knowledge of your HR feature requirements and find a solution that meets them.

Leapsome offers substantial flexibility with its modular structure. You can mix and match our new HRIS tool with whichever other features your company would benefit from the most.

That means you can stick with core HR tools like payroll and data management, or implement our complete suite of development, performance, and engagement features.

With our focus on people enablement, Leapsome stands out from traditional HRIS platforms. We’ve made employees central to every feature, so your tech will always work for your people, and never against them. 

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Frequently asked questions about HCM vs. HRIS vs. HRMS

What’s the difference between an HCM and an HRIS?

The key difference between an HCM and an HRIS is the range of features. While an HCM has a complete suite of HR and finance tools, an HRIS typically focuses on data management. However, these kinds of platforms are likely to have overlapping functions, such as attendance tracking and payroll.
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What’s the difference between an HRIS and an HRMS?

An HRIS and an HRMS differ in their focus and range of features. An HRIS usually includes the basic range of features required to organize employee data, run payroll, and track hours. By contrast, an HRMS has more tools aimed at talent management workflows.