HRMS vs HRIS: What's the Difference?

There are many different online tools and types of software that companies can use to manage hr tasks. The two that are referred to most are Human Resource Information Systems (HRIS) and Human Resource Management Systems (HRMS).

These HR technologies both serve similar purposes and carry several overlapping benefits, including improved employee retention, enhanced productivity of HR staff, and added business security. However, not all HR softwares are the same and there are notable differences between HRMS and HRIS systems.

It is important businesses are aware of where these differences lie before investing in either technology. This way, they can ensure they invest their money in a technology that is going to be beneficial to their business and produce the best return on investment.

In this article, we look at HRIS vs HRMS systems in-depth to help you understand the difference. By the end of this article, you will know the answers to all of these questions:

• What are the benefits businesses receive by employing HR systems?
• What is HRIS software and what functions does it offer?
• What is HRMS software and what are its capabilities?
• What are the similarities and differences between HMRS vs HRIS?
• How can you choose the right HR software for your organisation?

What are the Benefits of Human Resources Systems?

Both HRMS and HRIS software carry overlapping benefits for companies. These benefits can be categorised into three main groups: (1) benefits for HR teams, (2) benefits for other employees, and (3) benefits for the organisation as a whole.

Benefits for HR Departments

As a human resources tool, most of the benefits of implementing an HR system are seen directly within this team. These tools take tedious data entry and organisational tasks away from HR staff. Doing so speeds up working processes and allows staff to focus on things that matter. Some of the advantages this brings include:

• Boosted productivity of HR staff
• Enhanced oversight of the company
• Improved company organisation
• Enhanced data-driven working styles

Benefits for Other Employees

Other employees also benefit from an effective HR system. This is more felt when utilising HRMS software because, as you’ll find out, these systems have a larger focus on employee engagement than HRIS. Nevertheless, both bring several benefits to employees including:

• Streamlined onboarding processes
• Better access to training and learning opportunities
• Greater self-management options
• Overall enhanced employee satisfaction

Benefits for the Company

With satisfied staff, workers are more productive and engaged in their jobs. Therefore, establishing a happier workforce through the use of an HR system has ripple effects throughout the entire organisation. This includes all of the following benefits:

• Improved bottom line due
• More effective workforce planning
• Enhanced company culture
• Improved staff retenttion rates

What is a Human Resource Information System?

A Human Resource Information System (HRIS) such as the technology offered by Humaans is an online platform that helps streamline HR processes. It is a data-driven system that helps to track and manage human resources tasks by keeping information on a singular platform. Doing so benefits administration hugely, streamlining processes and improving the organisation of employee data.

All HRIS software is subtly different and the features vary depending on the precise technology in question. With that said, below are some of the features leading HRIS solutions offer:

• Centralised databases for the storage and management of employee-related data
• Employee self-service absence management and tracking features
• Insights into trends for staff absences, average salaries, and headcount changes
• Analytics tools for tracking staff performance reviews and workforce productivity
• Tools for simple and efficient hiring and training of staff
• Central storage systems for filing and sharing organisational documents

HRIS software's features carry many benefits and help fulfil business needs. Without these intelligent tools, companies must resort to manually using spreadsheets to store information. This can lead to human errors and misplaced documents. Yet with an HRIS system in use, these mistakes and lost files are dramatically reduced.

In addition, self-service features such as Humaans absence management solution allow HR staff to become more efficient and utilise their time on other more important tasks. Besides, with intelligent report-pulling abilities, businesses are better able to plan and manage where their resources are sent. Together, the features of a human resource information system make processes more efficient, facilitate business growth, and drive organisational change.

What is a Human Resource Management System?

A human resource management system (HRMS) has all the features of an HRIS. However, these online management tools play a bigger part in maximising productivity and understanding your employees.

Therefore, HRMS software usually combines standard HRIS features with the capabilities of a human capital management system (HCM). HCM software goes beyond the basic organisational features of HR software and has a larger focus on talent management, employee engagement, and staff retention. This includes all of the following features:

• Performance management systems and tracking tools to set and monitor performance standards
• Training tracking tools to help with onboarding and staff learning
• Tools for posting new job openings and receiving online applications
• Analytics tools for pulling reports on company trends to highlight room for growth

A great human resources management system can bring several benefits to businesses. By providing tools for effective workforce management and talent management, they focus on boosting employee performance and maintaining engagement. They can help track the entire employee life cycle along with assisting with core HR capabilities.

HRIS vs HRMS

Both HRIS and HRMS software have many similarities and are both effective HR technology solutions for businesses. They help streamline HR processes, boost employee satisfaction, and improve staff productivity. Besides, with many HR functions available on both systems there is a huge overlap between the two.

So, where do the differences lie? As it turns out, there are two subtle differences to consider: (1) the complexity of the software and its capabilities and (2) their suitability for different types of businesses.

Complexity of the Tools

The main difference between HRIS vs HRMS systems lies in the complexity of the tools available. HRIS software is more straightforward, while HRMS software has advanced functionalities and features. This is summarised in the table below:

As you can see, HRIS software is more focused on the organisation of company and employee data. This type of HR system uses centralised databases to keep information together and make HR tasks easier. They generally offer some reporting and analytics tools and often offer self-service absence management features, but their main focus is giving businesses data-driven solutions and making information easy for HR departments to access.

HRMS systems also offer these data-driven and analytics tools, alongside document storage solutions and central databases. However, they also extend their functionality to provide talent management capabilities with a larger focus on personnel tracking and productivity analytics. They are essentially a more advanced version of an HRIS.

Business Suitability

Due to the simplicity of its functions, an intelligent HRIS system is generally more suited to smaller companies with more straightforward HR needs. They help to keep all employee and company data organised to help improve the efficiency of HR staff while still offerings some perks in regard to employee engagement. However, smaller companies tend to need less help with monitoring staff performance and acquiring new talent. Therefore, they often don’t use all HRMS capabilities to their full advantage.

Comparatively, larger companies might prefer investing in HRMS software. They can help master employee data of even the largest firms and give an overview of staff well-being and productivity. Additionally, larger and more well-known companies tend to have a greater influx of applications for job listings. Using an HRMS can help streamline these traditionally lengthy processes to help find new talent quickly to facilitate growth,

Which HR Software Should You Choose?

Having read this article, you should find it easier to differentiate between an HRIS and HRMS. The former is more simplified, whereas the latter is an enhanced version with additional performance tracking and talent management capabilities. But which is the right investment for your HR department?

Unfortunately, there is no "one size fits all" product that works for everyone. As mentioned, size is a key factor to consider; generally speaking, larger compies have a greater need for more complex software that can take as many tasks as possible away from the human resources department. Comparatively, smaller companies can do more tasks manually and typically have a reduced need for automated processes.

But when choosing HR software you must take things one step further and consider the precise needs of your business. Your HR system is essentially your business partner, and the features available need to alight with your requirements.

Here are some steps you can go through to help determine which HR software will be most beneficial for you:

• Look at the biggest workplace challenges that your organisation is currently facing. What HR tools can help bypass these obstacles?
• Define your company goals and plans for growth. Which tools and features are essential for you to reach these company targets?
• Assess what processes currently work well in your organisation. Do you need an HR system that can correct well-functioning processes?

Answering these questions should give you a good idea of precisely what you are hoping to achieve by investing in human resources software.

If you are predominantly focused on improving administrative tasks and boosting the performance of HR staff, HRIS software will suffice. On the other hand, if you want to improve talent management and increase company-wide employee engagement, HRMS software is a better investment.

How Can Humaans Help Your HR Department?

All businesses, no matter how larger or how small, can benefit from HR software. Both the implementation of an HRIS and HRMS help companies boost productivity, develop a healthy company culture, and ease pressure on human resources teams. Yet not all HR software is on par. And, as discussed previously, these tools are only beneficial if they align with your company's requirements.

Humaans is a high-end human resource information system that can truly transform your business. Our software provides all core HR features, including employee databases, filing solutions, and payroll tools.

We have also designed our system to integrate with other online tools. This includes Slack, GSuite, calendars, and other popular apps.

Do you want to see Humaans in action? You can book a demo with our team.

Simplify your people operations today. Book a free demo to learn how to achieve greatness in human resources management.