HRIS vs. HCM vs. HRMS vs. BenAdmin: What’s the difference?
Between HRIS, HRMS, HCM, and BenAdmin (Benefits Administration), figuring out the differences between each type of system gets confusing. This guide will break down HR software terms that you need to know, plus the utility of each kind of system.
Human Resource Information System (HRIS)
HRIS systems are the most basic among the three types of software covered in this guide. These systems allow users to manage and automate the most basic necessities of HR. The following is a list of features typically included in HRIS platforms:
Employee information management:
- Centralized employee database
- Personal information tracking
- Employment history
- Emergency contact details
Time and attendance:
- Time tracking
- Attendance monitoring
- Leave management
- Overtime tracking
Recruitment and applicant tracking:
- Job posting and management
- Applicant tracking system (ATS)
- Resume parsing
- Interview scheduling
Basic benefits administration:
- Benefits enrollment and management
- Health insurance tracking
- Retirement plan administration
- Flexible spending accounts
It’s important to note that not all HRIS solutions will have every feature listed, and the level of sophistication can vary. HRIS systems lack the configurability and features that are valuable when managing complex benefits requirements, which is why these solutions are a good option for small businesses (100 or fewer employees).
Human Capital Management (HCM)
HCM systems function similar to HRIS systems, however, HCM systems include the “human element.” This means that HCM systems can manage the entire employee lifecycle, including recruitment, hiring, management, engagement, and development. The feature set includes those that an HRIS system has, plus the following:
Talent Acquisition:
- Recruitment and applicant tracking.
Job posting and requisition management.Interview scheduling and candidate evaluation.
Onboarding:
- New employee orientation.
- Electronic forms and document management.
- Integration with other HR processes for seamless transitions.
Performance Management:
- Goal setting and tracking.
- Continuous performance feedback.
- Performance appraisals and reviews.
- Competency assessments.
Learning and Development:
- Training program management.
- Skill assessments and development plans.
- Certification tracking.
- Employee education and career development.
Employee Engagement:
- Surveys and feedback tools.
- Recognition programs.
- Employee satisfaction tracking.
HCM platforms house functionality for all core human resources functions. Usually, HCM systems are really competent in one HR component, while other functionality suffers. For example, the payroll functionality may work great, but the benefits functionality leaves a lot to be desired. Because of this, it’s common to see HCM systems integrate with third parties to provide better functionality in lacking areas.
Human Resource Management System (HRMS):
The terms HRIS and HRMS are often used interchangeably, but there can be some distinctions depending on the context. Here’s how they differ:
Focus
A broader system that encompasses all HRIS features plus additional capabilities related to workforce management and planning.
Functions
May include:
- All HRIS functionalities
- Talent management (recruitment, performance management, learning and development)
- Workforce analytics
- Succession planning
- Advanced compensation planning
- Employee engagement tools
HRMS systems are typically considered more comprehensive, offering tools for managing not just HR data but also talent and workforce management functions. HRIS focuses more narrowly on essential HR data and processes. However, many companies use these terms to describe the same system, and in practice, the lines between HRIS and HRMS are often blurred.
Benefits administration technology (BenAdmin):
BenAdmin systems provide a robust benefits experience for employers and employees alike. BenAdmin systems provide managers with comprehensive and automated management functionality, while employees benefit from a wealth of features for enrollment.
BenAdmin systems include:
- Eligibility management
- ACA and COBRA administration
- Open enrollment and life events
- Integration with payroll, HRIS, HCM, HRMS, and carriers
- Robust data reporting
- Decision support tools
- Educational content
- Benefits shopping and enrollment
- Analytical tools
A platform that is truly built for benefits not only enhances benefits administration and enrollment, but is essentially necessary for certain organizations. An organization with a complex benefits program needs a system that can flex to handle complicated situations. Without a BenAdmin system, organizations may find that their technology solution struggles to manage complex benefits rules and cost calculations. In other words, HRIS, HRMS, and HCM systems lack the configurability to handle an array of health care plans and voluntary benefits.
HRIS, HRMs, and HCM systems may position themselves as best-of-breed benefits technology. In comparison to BenAdmin systems, HRIS, HRMS, and HCM systems do not measure up. Feature-rich BenAdmin systems streamline administrative tasks and transform a simple enrollment experience into a full-service shopping and support experience, which can’t be said for other systems.
BenAdmin systems are highly recommended for mid-size to large employer groups for their advanced configurability and functionality.
How are HRIS, HCM, HRMS, and BenAdmin systems similar?
HRIS, HCM, HRMS, and BenAdmin systems share several commonalities, as they all play a crucial role in managing various aspects of human resources and employee data. At their core, each of these systems is designed to centralize HR functions, streamline administrative tasks, and improve the efficiency of managing workforce-related information.
How are HRIS, HCM, HRMS, and BenAdmin systems different?
HRIS, HRMS, and HCM systems typically include foundational features like employee data management, payroll processing, and basic benefits administration. BenAdmin systems also share the goal of optimizing HR operations, but they are more specialized in managing employee benefits and ensuring compliance with healthcare regulations.
These systems often overlap in functionality, particularly when HRIS, HCM, or HRMS platforms offer integrated benefits administration features, but they can also work in tandem, depending on the organization’s specific needs for HR and benefits management.
How to pick a solution best fit for you
So, how do you know if an HRIS, HRMS, HCM, or BenAdmin system is best for your organization? Here’s an overview:
Best fit for HRIS, HRMS, and HCM
- Small businesses.
- Businesses with simple benefits programs.
- Businesses that operate in non-regulated industries.
Best fit for BenAdmin
- Businesses with complex benefits.
- Businesses who desire to increase engagement in enrollment (a true benefits shopping experience and support tools).
- Need for deep integration with carriers and other HR systems.
- Need comprehensive reporting and analytics.
Keep in mind, organizations can connect their existing HRIS or HCM systems to a dedicated benefits administration system. You can still streamline benefits administration without making drastic changes to your current tech stack.
Conclusion
Navigating the landscape of HR technology solutions can be a complex endeavor, particularly when focusing on benefits administration. Basic HRIS or HCM systems are suitable for straightforward HR needs, but specialized BenAdmin platforms are needed for intricate benefits structures.
The key lies in aligning the chosen system with the unique requirements of the organization, considering factors such as size, benefits complexity, industry regulations, and integration needs. By making informed decisions based on these considerations, businesses can enhance their HR and benefits management processes effectively.