Human resources (HR) software has come a long way from on-premises payroll. Far from tracking time and attendance and making sure everyone gets paid on time, modern HR solutions automate what used to be time-consuming core HR processes and help HR teams shift to a talent management and employee growth model.
When considering an investment in an HR solution, it’s helpful to learn how HR software can help you reach your goals. Once you understand what HR apps are designed to help you accomplish, it’s easier to find one that best suits your needs.
HR software acronyms made simple
While researching HR solutions, you’ll encounter three primary acronyms: Human resources information system (HRIS), human resources management system (HRMS), and human capital management (HCM).
The most important thing to know about the various kinds of HR software, such as Dynamics 365 Human Resources, is that the acronym is not as important as the features and capabilities offered by each solution. That said, there are some general rules of thumb that can be applied to help you tell the difference between the acronyms.
HRIS and HRMS
HRIS is an older acronym that is now interchangeable with HRMS. HRMS software typically centralizes the organizational structure of your HR team and people management by providing a single solution for managing people, procedures, and policies.
- Time and attendance tracking
- Employee scheduling
- Leave and absence programs
- Benefits management and administration
- Self-service employee portal
- Recruiting (Applicant tracking system)
- Basic people analytics
HCM refers to HR software that encompasses everything typically offered in an HRMS with the addition of workforce planning and integration with customer relationship management (CRM) and enterprise resource planning (ERP) business applications.
- All the capabilities of an HRMS.
- Full talent acquisition, including candidate relationship management.
- Onboarding resources.
- Employee performance evaluation tools.
- Learning management.
- Succession planning.
- Salary planning.
- In-depth people analytics for employee productivity and performance
- Workforce planning
Questions to ask when evaluating HR apps
Since HRIS, HRMS, and HCM mean different things to different vendors, it’s helpful to focus on the goals you want to achieve with your HR solution rather than what that solution is called. When comparing options, examine the features each solution offers and ask yourself the following questions:
- Does this solution help me build, execute, and measure effective HR programs?
- Will this application meet our needs now, and grow to support our needs in the future?
- Does this solution help simplify the employee experience?
- How much training will be required to enable everyone on my team to use this software?
- Does this application integrate with the apps and tools we already use?
The primary goals of HR software
Modern HR software, regardless of whether it’s an HRMS or HCM, is designed to support four essential HR processes:
- Payroll administration
- Core HR programs such as benefits management, leave and absence and time and attendance
- Talent experiences
- Workforce Planning and people analytics
In other words, its job is to digitize the employee experience while automating workflow. This frees up HR team members from time-consuming manual tasks so they can focus on being strategic business partners for the organization as a whole.
As valuable and important as these processes are, they’re far from all-inclusive in the ways HR software can facilitate the success of your organization. When HR professionals are supported by the right software, they can shift their focus to culture, retention, and other high-value priorities.
How HR software can support your organization’s goals
One example of a strategic goal for your HR team is transitioning to a human capital management (HCM) model. HCM is an overall approach to considering employees the most important assets in the entire organization. This people-centered approach is a shift toward attracting higher-caliber talent and nurturing that talent throughout an employee’s time with the company.
Transitioning to an HCM model for HR benefits the entire organization. Increased employee satisfaction, performance, and personal development elevate the quality of work in every department. Employees who feel supported and valued by their company tend to work harder to provide value and stay with the company longer. This reduction in turnover leads to higher morale overall, and places less of a burden on recruitment. Instead of hustling to fill the same positions over and over, recruiters can focus on targeting the right people with the right skills and HR teams can focus on improving training and skills development.
The right HR software is uniquely suited to helping you make HCM a reality in your organization with capabilities such as:
- Recruiting features that help you attract, recruit, and hire top talent.
- Talent management tools that track performance, foster employee growth, performance, and retention.
- Automating HR processes such as payroll, open enrollment, leave and absence, and time and attendance.
- Empowering employees with self-service tools.