HRIS vs. HRMS vs. HCM: What’s Best for Modern HR Teams

Finding the right HR technology is hard — even on a good day. Armed with a solid set of criteria and the best of intentions, you’re soon lost in a sea of shiny features, buzzwords, and identical-sounding acronyms — not to mention a list of platforms longer than your employee handbook.

All you want to do is get clear on which type of software will best support your team’s processes. Will a human resource information system (HRIS) that centralizes core HR processes do the trick? Or do you need a more comprehensive human capital management (HCM) platform to help you support strategic workforce planning and development?

Take a breath — we’re here to help. In this article, we’ll explain the key similarities and differences between HRIS, HCM, and human resource management systems (HRMS), and equip you with the evaluation criteria to make the right pick. 

HRIS vs. HRMS vs. HCM: Understanding the Differences

At first glance, HRIS, HCM, and HRMS may sound like the same thing. But while each platform shares an overlap in some core HR tasks, they all differ in their scope, depth of functionality, and strategic focus. 

Key Similarities

HRIS, HCM, and HRMS all fall under the broader umbrella of HR technology systems, so they’re designed to support many of the same HR functions and processes, including:

• Employee data and record management
• Time and attendance tracking
• Payroll processing and management
• Benefits administration
• HR compliance
• Employee self-service, such as viewing paystubs, requesting time off, and benefits enrollment

Key Differences

The right platform for you depends on your organization's size, growth trajectory, and HR complexity. Check the table below for a quick overview of the key differences between these three systems.

In the next few sections, we’ll outline the key features of each platform in more detail. 

What is a human resource information system (HRIS)?

HRIS software is designed to manage your core HR functions and employee data, keeping the lights on for essential HR processes including onboarding, payroll, compliance, and more. 

Compared to the other two platforms, it could be considered a more “lightweight” option because its primary focus is on streamlining administrative tasks and creating a central source of truth for HR teams’ people data. 

But that doesn’t mean it lacks impact. Modern HRIS platforms like Lattice HRIS offer automation, world-class integrations, and unified dataflow and reporting, so that HR professionals can boost efficiency, build smart workflows, and encourage more effective decision-making with real-time data.

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Key HRIS Features

An HRIS is the foundation for your core HR processes. Its key features include:

• Employee data management: Store and manage employee information, historical employee records, and workforce information (including compensation data, absence management, and training records) in a centralized place.
• Compliance management and reporting: Generate reports that show your adherence to regulations and labor laws. Some HRISs (like ours!) offer this as a self-service feature, while others require the involvement of a customer support representative.
• Payroll and benefits administration: Manage payroll processing and employee benefits enrolment efficiently.
• Workflows and automation: Streamline manual labor, including new hire onboarding processes and time-off approvals.
• Time and attendance tracking: Track working hours, employee shifts and overtime, and time off balances.
• Self-service portals: Enable employees to update their information, view their paystub, and request leave without the need for intervention from HR.

Best for: Small to Mid-Sized Organizations Building Out HR Operations

If there’s one thing HRIS solutions are really good at, it’s helping growing HR teams create a reliable foundation for employee data and operational efficiency early on. 

This makes them a great pick for small to mid-sized organizations of between 50 to 250 employees focused on building out workflows and automating HR tasks to streamline processes like reporting, onboarding, and data management.

For smaller teams of up to 50 employees, the biggest advantage is time savings, because HR teams can manage their data and reporting in one place. For larger organizations with over 100 employees, the HRIS offers greater customizability and flexibility — meaning you can truly capture every important detail of your workforce at scale.

What is a human resources management system (HRMS)?

HRMS software comprises all of the features you get in an HRIS, plus tacks on additional modules that help HR teams manage the more complex needs of a larger workforce. HRMS systems are often considered an all-in-one HR software solution because they integrate lots of HR functions and tools in one place.

Depending on the tool, this might include an applicant tracking system, performance management and employee engagement modules, and training and development. 

Key HRMS Features

HRMS systems are designed to help teams manage HR operations and core HR processes at scale. In addition to core HRIS functionality, key features of an HRMS include:

• Performance management: Track and evaluate employee performance, run performance reviews, and set goals and targets.
• Recruitment and applicant tracking: Manage job postings, screen resumes, build a hiring pipeline, and engage candidates.
• Training and development: Create and manage training requests, track growth goals, and implement learning and development (L&D) initiatives.
• Compensation management: Manage budget, set salary structures, administer bonuses, and build incentive programs for high performance.

Best for: Mid-Sized Companies With a Larger Degree of Complexity

HRMS systems are great for managing HR processes and operations at scale because they offer a comprehensive set of tools that span the entire employee lifecycle. Mid-sized companies with workforces of 200 to 500 employees will see the most benefit here because HCM software helps HR teams manage multiple processes as the organization grows.

A great use case for an HRMS is a growing organization expanding into new regions. With specific needs including multi-region payroll processing, local compliance, and employee benefits to manage, an HRMS keeps processes aligned and centralized across locations.

What is human capital management (HCM)?

HCM software is a comprehensive suite of HR tools designed to cover all aspects of the employee lifecycle and HR operations. Building on the HRIS and HRMS functionality, HCM solutions offer a more strategic, efficient approach to HR operations and focus on long-term outcomes, such as workforce planning, succession planning, and workforce optimization.

In a nutshell, do you want all the bells and whistles? You’ll find them in this one mammoth package.

Key HCM Features

HCM software is a powerful tool that helps the HR department align its strategy more concretely to the business. Key features include:

• Talent acquisition and recruitment: Build end-to-end recruiting processes, create talent pools, and align talent strategy with business goals.
• Succession planning and career development: Define career paths and long-term talent development, including a leadership pipeline, succession plans for key roles, and competency mapping.
• Workforce analytics and planning: Scenario modeling and long-term planning for future workforce needs and skills.
• Learning and development: Enable skills and career progression with integrated L&D tooling.

Best for: Mid-Sized to Large Organizations Focused on Strategic Workforce Management

HCM systems can really do it all when it comes to HR operations and strategic management. That’s what makes them a great solution for organizations with workforces over 500 employees — they’re a one-stop-shop for employee data, financial planning, compensation management, and the employee experience, no matter how dispersed your workforce may be.

Companies that could benefit from the broad range of tools an HCM system has to offer might be multinational or global corporations, where HR operations could vary from region to region. For example, global retail brands where key complexities could include forecasting for seasonal hiring, managing compliant multiregional payroll, and international talent management may fall into this category.

Which do you need: HCM, HRIS, or HRMS?

“When you’re looking for a new HR platform, you need to start with two things: your data, and the user experience,” said Kim Minnick, founder and principal consultant at Code Traveller HR. “If you don’t lay the right foundation for your employee data, you can’t build on it effectively.

“User experience is also really important,” Minnick added. “This is a tool you’re going to live in all day long, so it needs to be easy for both your team and employees to use. If your employees find it hard to perform basic tasks, like submitting time off and updating their pay stub, then you’re already losing.”

Building the right data foundation and user experience depends on how your organization operates. For example, for field-based workforces, you’ll need to evaluate the mobile experience. For organizations focused on high-volume hiring, consider how easy it is to automate onboarding workflows and support internal stakeholders involved in the process.

Once you have a sense of the basics, it’s time to start assessing your current processes, bottlenecks, goals, and existing tech stack. 

Here are three key steps to follow to help you identify your organization’s specific needs.

1. Determine gaps in HR processes.

To figure out what you need, you need to know what you’re missing. Running a gap analysis and identifying bottlenecks in your current processes will help you spot where your biggest inefficiencies lie, and which ones are the biggest priority.

Time for some detective work. Use these questions as a guide:

• What pain points can you identify in your existing HR software and processes?
• Which HR tasks or processes aren’t yet covered by your existing tech stack, or could do with an upgrade? For example, is your current payroll processing method able to handle your organization’s pace of growth?
• Have internal stakeholders — department heads, managers, and employees — flagged any challenges about your existing systems or processes? Can you identify any recurring issues?
• Which product features would you like to add to your core HR platform?
• What gaps exist in your employee lifecycle or organizational data? What data do you need better access to?

“You can’t always predict growth,” Minnick noted. “But over time, and as your organization scales, that’s when you begin to notice pain points — like manual data entry, HR task lists and workflows, or challenges with onboarding. 

“Start noting these down, and priority ranking your requirements by must-have or nice-to-have. As you start going out to market, you’ll have a much clearer idea of what you’re looking for.”

2. Identify goals for HR management.

Knowing your specific needs right now is critical. But having a sense of what the future holds for your HR team and the broader organization will minimize the risk of investing a lot of money in a platform that can’t grow with you — or opting for a larger-scale platform with all the bells and whistles too early on. 

For example, if you know your organization is planning for a period of rapid growth, you’ll need a platform that’s flexible enough to accommodate that scale and help you streamline key HR processes like talent management and onboarding. Or, if your organization is planning for an initial public offering (IPO) in the future, a platform that helps you build out your compliance and employee data workflows will be a must.

Use these questions as a guide to help you zero in on your future goals:

• What kind of company culture are we trying to build? How will our HR software systems support that goal?
• What are HR’s top priorities in the coming 12 to 24 months? Are we focused on scaling hiring, improving retention, or boosting performance? 
• How will our workforce evolve over the coming years? Are we likely to experience rapid growth, international expansion, or shifting toward remote or hybrid working models?
• What are our broader organizational goals in the coming few years? Are we planning to expand into new markets or regions? How will this impact our processes?
• How will we define HR’s metrics of success?

3. Match solutions to individual HR needs.

Once you’ve identified your process gaps and future needs, you should start to have a much clearer feel for what you’re looking for. This will help you weed out the tools on your longlist that don’t match your criteria.

As you compile your shortlist, go back to your priority ranking and focus on the outcomes you want to achieve. Try to frame this thinking in terms of the results you’re aiming for, rather than the specific features the platform offers.

Let’s take a couple of outcome-focused use cases:

• Reducing manual labor: OpenWorks’ previous HRIS had poor data visibility and an unintuitive user experience, leading to a huge additional manual workload for the people team. Switching to Lattice HRIS reduced the HR team’s manual burden by at least 25%.
• Streamlining HR processes: With Lattice HRIS, LTSE was able to automate its substantial 75-plus step onboarding workflow, providing a much better employee experience for new hires.

To keep you focused on your desired key outcomes, use our HR Software Checklist as a guide to help you prioritize your key criteria, from implementation to automation, pricing models, compliance, and more.

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