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The global HR software market is growing rapidly. It is expected to reach more than $25 billion by 2023.


The main reason behind the growth is that the correct human resource (HR) system helps organizations streamline employee management. It also helps to increase productivity and ensures statutory compliance.


However, when it comes to choosing the right type of HR software, most of the companies get confused between HRIS, HRMS, and HCM.

In this blog, we will explain all three types of HR systems that help you choose the right one based on your business needs. Let’s get started with HRIS vs HCM vs HRMS.

What is HRIS?


HRIS (Human Resource Information System) software allows data entry and tracking for human resources, payroll, and accounting teams.

This includes all the basic capabilities required for end-to-end human resource management, such as performance management, recruitment, employee development, and Training.

In other words, HRIS software helps you to plan and manage your HR activities without allocating too many resources towards them.


Functionality of HRIS

  • Recruitment and hiring: manage interviews, post jobs, resumes, and candidate Info
  • Employee information management: Keep & track a record of each employee
  • Absence management: Manage unauthorized and unplanned leaves
  • Training and development: Help employees enhance their skills
  • Benefits administration: Allow employees to enroll in health insurance and monitor their information
  • Self-service portal: Provides employees the ability to manage and change their information (like phone numbers, address, etc.)
  • Compensation management: Manage paid time off, overtime, bonus, incentives, salary, and more.


What is HCM?

HCM (Human Capital Management) software provides tools that help in strategic planning and analysis for the workforce. It helps track the performance of your employees so that you can improve their efficiency.

HCM includes all the functionalities of the HRIS system, plus global capabilities (like multicurrency and country-specific formatting), analytics, and onboarding.


Functionality of HCM

  • All the features of HRIS
  • Talent management: Monitor each employee’s performance and productivity
  • Onboarding: Streamline the new employee joining process
  • Analytics: automated data collection, data analytics, predictive analytics, and self-serviceable insights
  • Position control: Ensure that the right employee is working on the right project based on his skill set and expertise
  • HR services: Give access to company documentation, policies, and knowledge base
  • Global: Supports international needs, such as multilingual and multi-currency


What is HRMS?


HRMS (Human Resource Management System) is capable to handle the most complicated HR processes & responsibilities such as expense claims, automatic request approval/rejection, and employee progress.

HRMS software includes all the features of HRIS and HCM systems. It is more comprehensive than HRIS & HCM

Functionality of HRMS

  • Most features of HRIS and HCM
  • Payroll: Calculate employee salary, add allowances, deduct taxes & Deductions, and send direct deposits automatically
  • Time and labor management (TLM): Manage employee schedules, Plans and track project times to increase productivity
  • Performance Appraisal: Track relevant employee performance matrix to determine who to provide appraisal and how much to provide?


Which System Should You Choose?

Your choice of system depends on your business needs. Just because HRMS consists of all the features of HCM and HRIS, it doesn’t mean it is the perfect solution for you. Extensive features come at an extra cost.

Since you will be charged for the software, it is essential to keep the budget in mind when choosing an HR system for your business.