HRIS vs HRMS: What's the difference?

What is the difference between an HRIS and an HRMS?

The biggest difference between an HRIS and an HRMS is in how comprehensive the system is. An HRIS is traditionally used to describe a system that stores and manages employee information, often with features like absence management, rostering and some reporting functionality. An HRMS is often considered to be a more comprehensive HR system which offers tools to support HR teams to manage people processes more holistically throughout the entire employee lifecycle; from recruitment and onboarding, through to learning and development, performance management, payroll and employee benefits. 

We look at the two in a bit more detail below to help you make your mind up which system best suits your needs. But there’s a caveat: you will not find two matching descriptions for these systems online so please speak to your preferred provider directly to see what is included in their HR software. 

What is an HRIS and how can you use it?

An HRIS stands for Human Resources Information System and provides a centralised database for employee information and managing core HR tasks as previously mentioned. Some might include payroll and benefits administration, as well as time and attendance but if your provider says their offering is an HRIS it is best to check exactly what is included. As mentioned previously, this can differ from provider to provider. 

Some HRIS platforms can integrate with your other HR systems, such as payroll for example. However, integration is often cited as a limitation of certain HRIS products on the market.

What are the benefits of an HRIS?

The biggest benefit of an HRIS is that it can help to maintain accurate employee records, all in one place, reducing the need for manual entry and reducing the risk of errors. It can also help to automate some HR tasks like data entry and reporting, streamlining processes and helping to save time.

Our top 5 benefits of an HRIS include: 

1. Improved employee engagement

Many HRIS platforms offer employee self-service functionality that mean employees can update their own personal information, request time off and access company policies, further reducing the admin workload for HR teams and empowering employees to manage their own data.  

2. More accurate reporting

An HRIS can often generate reports related to key workforce metrics like turnover rate and attendance. These reports help with strategic decision-making by providing accurate insights to senior stakeholders. 

3. Better compliance management

An HRIS may include features that help organisations comply with government and industry regulations. 

4. Ability to track and report time and attendance

The HRIS can be used to track attendance and time worked, simplifying the process of calculating shifts, work hours and overtime. 

5. A secure way of storing data

HRIS systems provide secure access to sensitive employee information, ensuring that only those with the right level of authorisation can access and modify the data. 

An HRIS might also have a simpler user interface and be easier to use for smaller or mid-sized businesses looking to upgrade their systems, manage data more efficiently and save time with automation. 

What are the disadvantages of an HRIS?

The main limitation with an HRIS is that it could be missing additional HCM features, and functionality often found within an HRMS that could help future-proof your investment in the software.

Choosing the right HR software for the present situation is important, but something that is scalable to meet your organisation’s (and your people’s) future needs should also be considered. 

What is an HRMS and how can you use it?

An HRMS stands for Human Resource Management System (HRMS) and tends to offer a more comprehensive suite of tools and functionalities that go beyond the capabilities of a Human Resource Information System (HRIS). An HRMS is often seen as an end-to-end system that doesn't just help manage employee information but also aligns and connects wider people management processes throughout the employee lifecycle.  

For example, most HRMS systems can be used to: 

Address skills gaps

HRMS systems sometimes include learning management tools to help set organisational training programmes, personalised learning and track and manage training and development initiatives. This supports employee growth and helps address skills gaps. 

Align individual goals with business objectives

Typically, an HRMS can facilitate goal setting, performance reviews, 360 feedback, and personal and professional development. This helps drive continuous performance improvement and aligns individual goals with organisational objectives. 

Attract talent with employee benefits

Some HRMS platforms can provide integrated employee benefit schemes, discounts and other perks, which help support employee engagement, wellbeing and in attracting talent. 

Improve the candidate experience

An HRMS usually provides advanced recruitment features such as job posting management, applicant tracking, automated interview scheduling, integrated onboarding processes and even the ability to create your own careers website. This helps improve the candidate experience and shorten time-to-productivity for new hires.  

Plan for the future workforce

An HRMS aids in identifying high-potential employees and creating succession plans to ensure a smooth transition of key roles, helping provide plans for internal progression of talent. With features like competency assessments and career development tools, an HRMS can also support in talent management - identifying, retaining and developing talent. 

Importantly, with a connected view across multiple areas, an HRMS can be used to facilitate more informed strategic decision-making, from identifying areas to reduce costs, increase efficiencies or support employee engagement and development. 

As stated above, the definitions of an HRIS vs HRMS can vary and are sometimes even used interchangeably so this description should be taken as a guide only. 

What are the benefits of an HRMS?

The biggest benefit of an HRMS is that it can help to streamline HR processes with extensive integrations and automated workflows, facilitating cross-functional collaboration. Automation reduces administrative burden and ensures accurate benefits allocation.

As well as all the benefits included with an HRIS mentioned previously, and what an HRMS can be used for, we’ve picked our top 5 benefits of an HRMS:

1. Ability to manage all people processes in one place 

An HRMS is more likely to have extensive integration capabilities, so that it either includes as standard, or can add on modules, to seamlessly manage the entire employee lifecycle, from the point of recruitment to their onboarding, training plans, performance management, pay and benefits and often a lot more. 

2. Seamless payroll integration 

Many HRMS solutions integrate seamlessly with a payroll system, ensuring more accurate and timely payments. 

3. Unlock advanced workforce analytics

More sophisticated reporting and analytics tools are often included in an HRMS, enabling HR teams to easily access the information needed to demonstrate return on investment from their initiatives.  

4. Automate workflows

An HRMS helps automate complex workflows, reducing manual intervention in various processes, enhancing efficiency, and minimising errors.  

5. Allow for informed decision-making

By offering a comprehensive view of employee data and processes, an HRMS facilitates more informed strategic planning for workforce optimisation and organisational development, as well as the ability for HR teams to focus on the most important initiatives to their people, and overall business success. 

An HRMS is likely to include an enhanced user experience and mobile functionality and is generally best suited to organisations looking to optimise HR operations and enhance efficiency. 

HRMS vs HRIS: which is best for your organisation?

While the HRIS and HRMS have some shared features, they ultimately differ in scope and purpose. The HRIS helps manage employee data and reduce HR admin whereas an HRMS offers more comprehensive functionality to manage your people process, end-to-end. 

Having said this, we think it is more important to define your organisation’s specific requirements from a new HR platform, than to dwell on the name of the system. The most important thing is that your preferred provider offers the specific tools your organisation needs now, and for the future. You can then determine which features and functionalities are non-negotiable and which solution aligns most with your requirements. 

When researching new HR software, it’s always best to have a checklist of your requirements and get a more personalised HR software demo from your preferred provider to find out whether their system meets your organisational needs. 

For example, for smaller businesses looking to streamline and automate HR processes, you might be considering a solution like PeopleHR. For larger businesses, and those with HR strategies that are growing at a rapid pace, your next HR software investment will need to keep up with the pace of change. An end-to-end solution like PeopleXD can help with scalability, ensuring you get what you need now but with the ability to grow with you. 

Understanding the definition of an HRIS and an HRMS at a basic level can provide a good start to know what you’re looking for when you’re researching new HR software providers. You can also get further guidance on what to consider in our extensive guide ‘How to choose HR software’. 

You may also be interested in:

• Benefits of HR software
• How to choose HR software
• How to implement a new HR system
• Problems with legacy HR software and how to build a business case
• Calculating the ROI of HR software