HRIS
Tech

The Difference Between HRIS vs HRMS

15 February 2024

11 min read

Amanda Chua
Amanda Chua

While researching for the right HR software for your organization, you may come across these two primary systems: the Human Resources Management System (HRMS) and the Human Resources Information System (HRIS).

These terms are often used interchangeably, causing confusion and frustration among HR professionals regarding which one is truly necessary for their HR responsibilities. In this article, we will deep dive into the differences between HRMS and HRIS and guide you towards selecting the most suitable solution for your organizational needs.

But before we go into that, it’s important to understand what HR software entails and what functionalities you can expect from adopting one for your organization.

What Is An HR System?

An HR system is a software solution designed to help you streamline and automate your various functions within an organization.

By centralizing and organizing processes and employee records, it empowers your team to operate with increased efficiency and productivity. This tool also serves as a centralized hub for managing tasks such as payroll, employee onboarding, performance management, benefits administration and compliance tracking. 

Main Advantages Of Using An HR System

Implementing an HR system brings about numerous advantages for organizations seeking to optimize their operations. Some main benefits of using an HR system include:

Streamlined HR processes

An HR system streamlines and automates the various time-consuming and repetitive tasks that your HR team handles manually, such as performance management, employee data administration, and payroll processing.

This consolidation minimizes the likelihood of manual errors, thereby preserving valuable time that HR professionals can redirect towards more strategic initiatives.

Improved Data Accuracy

Another benefit of using an HR system is its immediate improvement of data accuracy within your organization. Manual data entry stands as the biggest source of data errors. Therefore, implementing software to automate data collection and storage logically reduces the frequency of such errors. 

By leveraging an HR system, organizations can rely on more precise and reliable data, leading to better-informed decision-making processes and overall operational efficiency.

HR Scalability

As the demands of your organization evolve, it is important that your HR software grows alongside it. Whether it’s adapting to changes in recruitment practices, enhancing performance management processes, or refining compensation strategies, your HR software should be flexible enough to accommodate these shifts. 

By facilitating seamless transitions in various HR functions, the software ensures that HR departments are future-proofed, maintaining alignment with the overarching objectives of business growth and development. This adaptability not only enhances operational efficiency but also empowers HR professionals to support the evolving needs of the organization. 

Reporting And Analytics

HR software also provides your team with valuable insights in ways that surpass what a manual set up can offer. For instance, you can track comprehensive HR metrics, identify skill gaps in your workforce, and monitor the performances of your employees. 

Such capabilities empower you to make data-driven decisions that optimize your organization in the areas of recruitment strategies, employee engagement initiatives, and employee retention efforts

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What Is An HRIS?

HRIS stands for Human Resources Information System. It is a type of HR solution that primarily serves as a central source of information for your employee management needs.

Functions Of An Human Resources Information System

The primary goal of an HRIS is to provide you with streamlined access to information related to people at your organization. This involves the collection and storage of your employee records such as employee name, addresses, payroll details, benefits information, and so on.

HRIS serves as the foundation you need to carry out other HR tasks such as onboarding, payroll processing, applicant tracking, and generating reports.

Essentially serving as a digital repository for employee data, HRIS negates the reliance on paper-based documentation, which in turn cuts down the likelihood of human errors and enhances overall team efficiency. 

Main Features And Benefits Of An Human Resources Information System

Human Resources Management System

It’s clear that HRIS is a useful tool for businesses looking to optimize their operations. However, it is pivotal to understand the features and benefits of HRIS to ensure that it aligns with your organizational needs. These includes: 

Onboarding

A seamless onboarding process sets the relationship between your new hires and the organization up for success. HRIS contributes to this by ensuring that you can track candidates’ information and resumes, allowing you to process new hires quickly and efficiently.

If your organization has a particularly high turnover rate, HRIS onboarding becomes invaluable because you can improve your hiring practices by harnessing the data analytics and reporting function it offers. By leveraging HRIS, you can gain deeper insights into various aspects of your onboarding process, such as time-to-productivity metrics, engagement levels of new hires, and areas of improvement. 

These insights empower HR professionals to refine existing recruitment strategies, tailor onboarding experiences, and ultimately reduce turnover rates without necessitating significant resource investments. 

Payroll Automation

In addition to streamlining onboarding processes, HRIS systems offer significant benefits in automating payroll calculations, ensuring an accurate and timely processing of payroll. This reduces the risks of manual errors and contributes to enhancing overall employee engagement in the workplace. By ensuring that employees receive accurate and timely compensation, HRIS systems contribute to a positive work environment and bolster employee morale.

Beyond payroll processing, HRIS also provides data on employee salaries and benefits. This wealth of information enables the finance team to generate comprehensive profit and loss statements concerning payroll expenditures. With these detailed insights into salary structures, benefit packages, and related expenses, HR and finance personnels can effectively manage future HR budget allocations and optimize financial planning strategies.  

Employee Data Management

HRIS also serves as a central database of employee information. This ensures seamless maintenance and updating of accurate records, eliminating the need to navigate between multiple platforms or rely on paper-based documentation. 

By consolidating necessary information within one accessible interface, HRIS streamlines administrative processes and enhances data integrity. This centralized approach not only saves time but also reduces the risk of errors associated with manual data entry or separate record-keeping systems. Overall, HRIS empowers organizations to efficiently manage employee information, and uphold compliance standards with ease.

Employee Self-service

In addition to core HR functions, HRIS systems offer employee self-service portals, enabling employees, managers, and even potential candidates to access and manage information, complete necessary forms, and engage in various HR-related activities. 

These portals significantly reduce the administrative burden on HR teams by empowering employees to handle routine tasks and inquiries such as updating personal information, submitting time-off requests, or accessing company policies independently with ease. 

Additionally, self-service portals facilitate seamless communication between employees and their managers, fostering a collaborative and transparent work environment. By providing easy access to essential resources and enabling efficient interactions, employee self-service portals enhance overall organizational productivity and employee satisfaction.

Reporting and Analytics

Last but certainly not least, HRIS systems incorporate reporting and analytics capabilities, enabling the tracking of key metrics such as HR cost per hire and turnover rate. These features enable HR professionals to showcase their impact within the organization by providing important insights into workforce dynamics and trends. 

By leveraging data-driven analytics, HR teams can make informed decisions regarding strategic functions such as workforce planning, recruitment strategies, and performance management initiatives. This ability to access and analyze relevant metrics enhances HR’s effectiveness and strengthens their role as strategic partners in driving organizational success. 

What Is HRMS?

HRMS, or Human Resources Management System, serves as a comprehensive solution for overseeing HR processes within an organization. 

It encompasses all the functionalities typically found in an HRIS but goes a step further by offering customization options to cater to the specific requirements of each organization.

So what sets HRIS apart from the Human Resources Management System?

While the primary function of HRIS is to act as a centralized repository for employee information, the Human Resources Management System (HRMS) consolidates various HR functions into a unified platform. 

Despite the distinction however, these terms are often used interchangeably due to the emergence of HR systems that integrate both HRIS and HRMS features. This convergence enables organizations to leverage a comprehensive solution that addresses their diverse HR needs efficiently.

Functions Of A Human Resources Management System

A well-developed Human Resources Management System streamlines various HR tasks, automating processes such as onboarding, payroll processing, and compliance management. This reduces the time and resources traditionally required for these tasks. 

Additionally, adopting a Human Resources Management System leads to a reduction in the number of applications needed to manage HR functions. By consolidating these tasks into a single, integrated platform, organizations can achieve cost savings and enhance team efficiency significantly. 

Features And Benefits Of Human Resources Management System

Contrasting to HRIS, the Human Resources Management System comprises a comprehensive suite of tools designed to manage various aspects of HR operations. The key features of an HRMS include:

Benefits Administration

Managing various employee benefits and accurately tracking them for payroll processing can be extremely time consuming. Fortunately, the Human Resources Management System provides a dedicated benefits module, which helps automate this process and alleviate administrative burdens. 

By automating tasks such as enrollment, eligibility verification, deduction calculations, HRMS enhances efficiency and ensures compliance with benefit regulations. Moreover, the module’s reporting capabilities offer valuable insights into benefit utilization trends, enabling HR teams to make informed decisions and focus on strategic benefit initiatives and employee engagement efforts

Payroll Integration

The Human Resources Management System also extends to assisting in payroll management. Many HRMS platforms incorporate a time off and attendance module, seamlessly integrated with payroll processes. 

This integration ensures accurate calculation of employee salaries by capturing and consolidating attendance data, including working hours, leave balances, and overtime hours. Moreover, it allows payroll systems to retrieve real-time data, facilitating timely and accurate payroll processing cycles. 

Overall, leveraging the payroll function within an HRMS platform streamlines payroll administration, optimizes resource allocation, and ensures compliance with regulatory requirements. 

Real-time Reporting

In addition to its other functions, your HRMS platform should also allow you to access and download customizable reports derived from your data. These reports serve as invaluable insights for informed decision-making, enabling you to analyze trends, identify areas for improvement, and track key performance indicators. 

By leveraging the insights gained from these reports, you can implement targeted strategies to optimize various aspects of your organization’s operations, ultimately driving enhanced performance and competitiveness in the marketplace.

Paperless Documentation

Heavily relying on paper-based documentation for distributing essential communications such as employment contracts, tax forms, or benefits administration can prove inefficient and prone to errors. 

Top Human Resources Management System platforms offer paperless solutions that promote environmental sustainability and also enhance security and cost-effectiveness. By transitioning to digital communication channels, organizations can streamline document management processes, ensure data integrity, and reduce the risk of document loss or misplacement. Additionally, paperless solutions minimize printing and postage expenses, leading to significant cost savings in the long run. Integrating e-signature capabilities further expedites the document signing process, facilitating efficient workflows and reducing administrative burdens. 

Embracing a paperless office through HRMS platforms aligns with modern business practices, fostering efficiency, security, and environmental responsibility. 

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Choosing the Right HR System for Your Organization

Human Resources Management System

While HRIS and HRMS serve overlapping functions, they differ in scope and capabilities. To select the most suitable solution for your business, consider factors such as the size of your organization, your industry requirements, and the complexity of your HR processes. 

By evaluating your business needs, researching and trying out different solutions, finding the perfect HR system for your business needs does not have to be intimidating. Affordable, functional, and suitable for modern businesses — Omni is an HR software that HR teams can count on. 

With Omni, you gain access to data-driven insights that empower informed decision-making, as well as seamless integrations that effortlessly connect with your existing employee favored systems, making your entire engagement process more efficient and modern.

Our full suite of modules provide support for every aspect of your business through an intuitive and fully customizable platform that integrates with your team’s favorite tools for a seamless and timely adoption.

Powering Asia’s fastest-growing, modern companies, Omni scales alongside your company so you can customize and leverage the system to meet your business exactly where you are — as well as where you’re going. To join the 83% of Omni customers who have unlocked new, actionable insights after using our modern HR software solution,

Get started today!

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