HRIS vs HRMS vs HCM – Differences Explained For 2023

The development of the ERP solutions like HRIS and HRMS has become of growing importance for the modern-day needs of businesses. In the age of data and technology, handling the day-to-day aspects of human resource management without dedicated HRMS software can have a lot of negative results. These includes :

Inability to track and monitor the progress of day-to-day activities of employees.

Inability to enforce HR policies and regulations in an organisation.

Inability to execute important HR functions like processing payrolls, handling leave applications, formulating HR policies and all others. 

In this context, understanding the differences between HRIS, HRMS, and HCM becomes important to help your business stay upbeat with HRMS development needs. 



HRIS is referred to as the Human Resource Information System. It is basically responsible for keeping track of data and information produced in the daily routine of a business. 

HRIS is an application that is created for the purpose of human resource management. Basically, this application will help to manage the details of the employees. Anything that revolves around employees is stored in the HRIS application. This application is mainly used to manage the payroll information of employees.

Along with payroll, the application has the capability to manage the details of the employees like performance management, leave management and payroll management. This application will be mostly desktop-based. It has existed for many years, and every company will have its own HRIS application.

The basic difference between the HRIS application and HRMS application is that HCM and HRMS application is hosted mainly on the cloud, whereas the HCM application is on-premise and it does not have cloud hosting and will be available on-premise and installed in the local systems of an organisation.

Why is HRIS Application important for your business?

HRIS application focuses on the features like managing the payroll for an employee. The payroll management typically helps the employee to get into their payslip every month. The application will help the employee to check out the list of holidays that has been planned by the organisation. The HRIS application helps the organisation to customise the payroll management according to their requirements.

The application will help the employee to initiate their income tax declaration. The income tax declaration is an important task as the salary that they earn every month is accountable to tax, and they should be able to provide the declaration well in advance in some portal.

HRIS application helps the HR team to manage the activities of the employee in an effective way. The initial process with any employee is to complete the paperwork. HRIS application will help the HR team to complete the paperwork and the process of collecting the documents in an effective way. The paperwork will also require certain e-signatures, and this application will enable such signature procedures to be completed properly.

Small Organisations to Bigger Organisations will have a greater dependency on HRIS applications. They use this application to monitor and track employee-related information. Beyond the information related to employees, these organisations use the application exclusively meant for Executives of the organisation and business owners.

These Organisations can manage the hiring process of the employees via the HRIS tool. The HRIS tool will help a company to organise the activities related to training, the onboarding process of new employees and any documentation process for employees can be handled with the tool.



HRMS application is a Human Resource Management Software which will help the organisation manage the employees end to end and also helps the organisation to stay compliant with the tax laws, income tax activities and other regulatory information. This application will help the organisation to understand the details of their workforce and helps to manage the lifecycle of the employees.

HRMS application has the entire steps related to the recruitment and onboarding process. The recruitment process is the first step of the organisation to attract employees, and it would help to deliver the best of people’s work.

The recruitment process can be well managed with the HRMS application. The resume of the employee and the candidate’s information will be stored within the HRMS application. The application will help to keep track of the employees who appeared for the interview in the past. This tracking will help the organisation to assess the employee and evaluate him for recruitment.

The onboarding process will also run smoothly with the help of the HRMS application. This application will also have the process automated for the employees. The candidates can get the offer letters sent from the application directly, and they can even sign off on the offer letters. The employees perform e-signature on the offer letters and can get that saved as part of the onboarding process.

HRMS applications will mostly be cloud-based applications. The application will have an end-to-end centralised HR solution and can help to automate the HR processes for any scale of organisation. The HR team nowadays need not worry about managing the employees. The application is designed in such a way that the organisation does not need to have a great learning curve in using the application. They are very easy to adapt, and it is very effective in handling HR-related activities.

The other important aspect of the application is the leave tracking of the employees. The employees can apply for leave in the application, and they can track the leaves of the employees on the same screen. The advantage is that the application can be used as an employee-friendly tool and at the same time as an organisation-friendly tool. The tool will help the employees to track their performance documents. The entire performance process of a user and the documents related to performance is managed via these kinds of applications.

HRMS application is expanded beyond the HRIS application as it is cloud-based and can help to manage the HR work progressively and effectively. Thus, HRIS helps in performing employee data management, starting from payroll, recruitment, benefits, training, talent management, employee engagement, and employee attendance. An HRMS helps HR professionals manage a smart workforce and collect and displays information about a company’s most valuable assets.


HCM application does similar things that have been performed with HRMS application, but it is the recently used application format in today’s world. HCM is referred to as Human Capital Management software. The entire activity is managed in a cloud-based setup. HCM application is mandatorily deployed in the cloud-based environment, unlike HRIS or HRMS. HCM adapts to the latest techniques, and it will also have an inbuilt AI capability. HCM solutions have inbuilt digital systems that help streamline the onboarding process effectively. The HCM tools will help to transform the traditional work items into other functional activities driven by performance and creates more business value for the organisation.

Benefits of HCM over HRIS and HRMS

The major benefit of the HCM platform is that it is set up in the cloud, and hence there will not be any problems related to scalability or downtime for the application. The cloud-based solution will have an easy integration with other innovative solutions to manage the tasks related to human resources. The cloud setup will also have in-built solutions for document management, which will help during the employee onboarding process and also during the performance management process. 

The application is much more scalable and has the flexibility of a remote or hybrid workforce set up in a short duration. Another important aspect of this solution is that it will be accessible from any environment and is available from any location. The cloud-based solution will perform seamlessly, and it is completely dependent on the network bandwidth. The HR group or the employee group can access the application from anywhere, and they can get the information in hand without any delays.

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