Difference between HRIS Software, HRMS Software and HCM Software!

Debunking the differences between HRIS, HCM, and HRMS

According to the latest analysis by HR world, the global HR market is anticipated to become a $43.29 billion industry by 2028. This massive growth is powered by mobile apps, analytics, and vendors’ keen interest in team-focused management.

HR management software has evolved into powerful solutions for B2B companies. It streamlines everything from employee engagement to statutory compliance.

But, when it comes to choosing the right type of HR software, many organizations get confused between these three acronyms – HRIS, HCM, and HRMS. What do these terms mean? Which one is the most efficient?

We will explain all these 3 types in this article to help you make an educated choice.

Let’s get started.

What is HRIS?

HRIS (Human Resource Information System) is a software solution that manages and monitors employee information. The HRIS is a fundamental system that an organization may opt to manage its people’s data and keep secure, too. HRIS systems ensure efficient data entry, data tracking & management of all HR operations within an organization.

HRIS is an umbrella term for a wide range of HRIS systems. It includes managing all the aspects related to employee database & directory, payroll processing, leave tracking, time & attendance, compliance protocols, performance management, and other HR processes.

HRIS systems offer customized solutions according to the business needs and the organization’s growth plans. In the segment, we are going to brief you about what HCM is. 

What is HCM?

HCM Stands for Human Capital Management, includes a comprehensive set of practices related to human resource management. The practices cover recruiting, managing, and deploying human resources. HCM software goes one step ahead of conventional human resource management by including more strategic disciplines such as employee engagement and talent management. HCM addresses the most crucial investment of any organization, which is its people.

Investing in human capital facilities boosting employee creativity & productivity, and eventually, the profitability of the organization.

Failure to implement the SCM practices could lead to higher labor costs, missed opportunities, and lost revenue. Up next is HRMS.

What is HRMS?

Human Resource Management System or HRMS is a power HR software that ensures the efficient management of different HR functions using advanced technology.

HRMS software aims to enhance efficiency & productivity by eliminating repetitive tasks. Thus, saving time for the HR team to focus their energy on more creative, business-critical activities that drive the organization forward.

The best HRM software covers many HR aspects, right from manpower planning, recruitment, onboarding to leave policy & transcription management.

Now, the Billion-Dollar Question, What Are the Differences Between HRIS, HCM, and HRMS?


Typically, HRMS and HRIS are considered the same thing. Both HRIS and HRMS are meant for automating the HR tasks and processing while serving as a single database for storing workforce information. So, both of these houses all the data that the HR department required for core human resources processes such as payroll and benefits administration. What is the difference between the two?

HRIS is a small bundle of HR software. It is designed to help your company quickly set up and get started while taking care of the most essential HR applications & functionalities that every organization needs. HRIS software plays a pivotal role in managing * organization all the employee-related data such as leave balances, job information, performance review, and demographic data.

On the other hand, human resource management software is a one-stop solution that includes every aspect of HR management. It contains the features included in the HRIS, along with additional features such as time, labor, and payroll.

Since the laws and regulations related to employees vary from one state to another, the HRIS functionalities can be customized to comply with the state guidelines.

Taxation and several other legalities can be handled easily by the HRMS suite.

HRMS analytics are more powerful compared to HRIS. The number of third-party Apps integration is way higher with HRMS than HRIS.


HRMS solves the HR requirements of a small to a midsize organization, while HCM is permissible for the complete employee lifecycle in a larger enterprise. Not only is HCM capable of performing all the functions that are offered by HRM software, but also in the most optimized manner. In addition, it can be employed for succession planning.

The HRMS software does more than the traditional HR functions, enabling organizations to be prepared for the possible risks and opportunities. It can identify the red flags and notify the HR department before it’s too late.

HRMS plays a critical role in engaging, deploying, managing, and retaining human resources. 

Which One is the Right Choice for HR Management Software?

HCM software covers a much broader suite and presents expansive features & functionalities in comparison to HRIS and HRMS. For instance, HCM software offers talent management features that aids in better management, optimizing each stage of the employee’s life cycle, such as results and onboarding 

Some advanced HCM systems also come with the most up-to-date features such as performance management & learning, along with next-gen capabilities. It also covers workforce management & optimization, such as employee engagement features, compensation, analytics, and budgeting.

Human capital management software can be set up on-premises or cloud-based infrastructure, the latter one is a more popular and preferred choice as it eliminates the infrastructure requirements for managing the software. Also, provides benefits like quick scalability, easy software update, etc.

The physiology of HCM is to view the employees as an asset that ensures strategic management. The HCM practices assist HRs within the organization to act protectively, rather than being reactive when it comes to managing the workforce.

The Bottom Line

Finally, we have put forth the differences between HRIS, HCM, and HRMS. So, now the ball is in your court, you have to decide which one to choose within the given well-defined structure of your organization and prospects. If you are a startup with not enough budget to invest in pricey software, then opt for HRIS. And, when the needs expand, shift to HRMS, and eventually HCM to enhance overall work culture

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