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What is the difference between HRIS and HCM?

The world of Human Resources (HR) holds hundreds of acronyms. We find HR dealing with ADA (Americans with Disabilities Act), AAP (Affirmation Action Policy), EEOC (Equal Employment Opportunity Commission), OWCP (Office of Workers’ Compensation Programs), and more. These standards come from the need to comply with outside forces. HRIS and HCM, on the other hand, offer software support for standard HR accountabilities. So, what is the difference between HRIS and HCM?

HRIS explained

A Human Resources Information Systems (HRIS) offers a software platform with comprehensive capabilities. Comprehensive HRIS support recruiting through onboarding and employee performance analysis. The systems file, sort, and archive documentation to reduce administrative work, replace paper flow, and ensure the privacy and safety of employee records. HRIS interfaces with payroll, group insurance benefits, and paid time off. In doing these chores, HRIS can reduce the labor burden in the HR office.

Employers often find well-known HRIS brands are too comprehensive for their respective size and needs. Many organizations move towards HRIS brands with more focused and specialized potential.

For example, they may need an HRIS platform that serves Functional, Analytical, or Strategical goals.

Functional: HRIS options simplify and reduce the tedious administrative duties of HR management. Such options build cross-functional databases that support recruiting and hiring, placement and performance, training and development, and analysis and benefits. These employee tracking systems better serve employees and their managers.

Analytical: Organizations choose HRIS options to improve decision-making. They integrate data to hire recruits well-suited for positions that systems’ experience has defined as best matches. HRIS can also report employee use of group benefits and encounters with workplace injuries. These reports help HR managers negotiate insurance contracts from a position of strength. And the HRIS database supports compensation administration and budgeting for other functional departments.

Strategical: HR leaders who want a place in the executive suite must advance as strategic partners. With robust HRIS systems, leaders remain on top of the resources needed by others. They become masters and guardians of the data created by the organization’s human capital. HR executives “own” and control the information necessary for the organization’s strategic growth. HRIS holds everything needed for compensation negotiations and budgeting, workforce deployment and succession planning, and forecasting material and facility needs. Senior management finds powerful strategic leverage in HRIS to evaluate performance against goals.

HCM explained

Human Capital Management (HCM) software assumes employees provide a resource worthy of investment. HCM focuses on building, saving, and growing the organization’s human “capital.” The most effective HCM options use their databases to communicate with recruits, employees, and management. These systems use data to follow and analyze employee performance metrics, drive solutions where performance needs correction, and provide insights for better decision-making. Organization leadership can monitor systems and procedures in real-time, recording and sharing observations on project management.

Management can place confidence in HCM that relieves them of the constant duty to drive employees, communicates respect and gratitude, and ensures retention of the most promising workers.

Drive: HCM proceeds from the patterns found in the data collected from recruiting, hiring, and onboarding employees. HCM collects and integrates the data on human performance and promise in an organization’s employees. Employee value increases with added investment and reward for performance. Like a financial market, experience and input add value to capital investment.

Communicates: HCM makes employee information available to those authorized as having a “need to know.” That includes an interface with employees. HCM offerings may include new hire onboarding information, training and development tracks, and recognition and reward tools.

Retention: Information alone does not ensure employee retention. However, HCM fills in the gaps. When time affects personal contact, employees and managers can find answers to their questions. It fills out the Big Picture and provides the data for counseling, rewarding, and advancing performance.

The best HCM offerings include a robust integration of open API to customize solutions to the organization’s workforce challenges and opportunities.

HRIS vs. HCM – What’s the difference?

HRIS solutions manage HR administrative functions. They reduce HR labor, free HR talent to develop strategic roles and ensure data security, privacy, and compliance. The most competitive brands in Human Resources software offer flexible and customizable information systems.
HCM solutions capture employee performance data for talent analysis and retention. Systems manage learning and development, enable and drive collaboration across functions, and support business planning and strategy.

Nonetheless, technologies like those available at ClayHR effectively negate or reduce these differences with fully integrated approaches to organization success and development.

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