HRIS, HRMS or HCMS Solutions: Is there a difference?

If you’ve researched HR software lately, you’ve come across a number of different ways to describe the systems we use to manage and track employees. Some sources use terms like HRIS, HRMS, and HCMS interchangeably, while others give them subtly different meanings and contexts.

So how do you keep it all straight? Does your business need a HRIS, HRMS, or HCMS—and does it really matter? 

Why are there so many terms for HR Solutions?

It used to be enough to say you were looking for HR software. Well, not anymore. Now using this wording is sort of like saying you are hungry but not providing any idea of what you are hungry for.

Savvy marketers sometimes create brand new terms for their products to differentiate them from others on the market. As products evolve, their descriptive terms become more targeted, describing specific functions or levels of sophistication. A new name might be applied to the same system in order to alter customer perception. 

That’s what we’re seeing with HR solutions. You would be hard pressed to find any two HR experts who agree on the precise definitions of the terms. Still, it is helpful to understand the ways in which people use them so you can target your search more effectively.

HRIS, HRMS, and HCMS: Sorting Out the Differences

These days, HR solutions include a wide variety of terms, but these three are the most common:

• HRIS, a.k.a. Human Resource Information System – HRIS is an older term that you don’t hear much anymore. Marketers originally developed this term to describe a comprehensive system with deeper functionality than you would get from an HR database. However, since there was no standard way of categorizing systems, the HRIS label was applied to all HR software solutions. Today, you’ll still see HRIS used as a comprehensive term that includes a variety of different software options, but it usually indicates a system covering primarily core HR functions.
  
  What it does: Recruiting/ATS, Core HR, Benefits Admin, Compensation, Training, Workflow, Self-Service, Reporting
  
  
• HCMS, a.k.a. Human Capital Management System – Over time, companies wanted more from their HR systems. To meet the demand, vendors began offering functions like talent management and global capabilities as part of the package. Marketers concluded that these deeper functionalities warranted a new name, and the term HCMS was born.
  
  What it does: All HRIS functions, plus Onboarding, Performance Management, Position Control, Succession and Salary Planning, Global HR, Analytics
  
  
• HRMS, a.k.a. Human Resource Management System – HRMS rides the center line between HRIS and HCMS. Some vendors use it to describe a system that offers HRIS functions plus payroll and time/labor, while others use it to indicate a full HCM plus payroll and time/labor.
  
  What it does: All HRIS functions plus payroll and time/labor OR all HCM functions plus payroll and time/labor.

The HR Software Caveat

It would be easy to trot out these tidy definitions and functionality lists and call it done. But the truth is that it’s not that simple. Ask any HR professional what defines each term and you’ll find subtle differences in the responses, whether you’re talking to Josh Bersin, Steve Boese, or Suzy HR Manager. That’s why you’ll often see them used interchangeably in the industry.

If you’re still not convinced about the differences, you’re not alone. People who have been in the business for decades still debate terminology. And as technology continues to evolve, we’ll undoubtedly see more shifts in definitions and descriptors. We may never reach 100% consensus, but setting down some basic clarifications can help clear the mud from the water as you do your research. 

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