What Is Human Resources Management Software?

The human resources management software is one of the most important tools for the human resources management of an organization. These systems are characterized by very specific functions for heads of human resources (HR) departments. Although many companies use it primarily for managing employee payroll and salaries, many other tools make any HRMS Software a very valuable tool for a business.

What does human resource management software do?

The human resources management software, or ERP software for human resources management, is generally used in companies that have an HR department or an official dedicated to planning and management of staff. Within the functions of this department are attention to personnel, recording of absences, leaves and working hours, administration of pay and wages, allocation of vacations, and other direct requests of the staff. They may also be responsible for the various selection processes for vacancies, employee performance reviews, or promotion planning.

However, not all human resource management software includes the tools required for each of the above functions.

HRMS vs HRMS vs HCM: what's the difference?

The terminology used by both human resource management software vendors and experts in the human resource management field means that there is no clear distinction between so many terms. First, we need to show the difference between each of these acronyms:

• HRMS: Human Resources Management System
• HRIS: Human Resources Information System
• HCM: Human capital management

Only by their names, it seems that they have slight differences between them. However, neither global HR software experts like Josh Bersin, Naomi Bloom, Jason Overbrook, or Bill Kutik can agree on the definition of each of these acronyms. In the following image, you can see the main differences established by Mike Maiorino for these three definitions of HR software:

In any event, whatever term a manufacturer or supplier uses, they all refer to the same essence: human resource management. The only way to understand the differences is to focus on the functions of each product. To differentiate and examine the features, the HR Software Guide includes a comparison of the features and characteristics of different HR software packages.

HR systems for SMEs

As we have already mentioned, most human resource programs focus on companies that employ a large number of people. However, some suppliers focus on the other side of the business spectrum: SMEs. Human resource management software for this type of business is often in the cloud, in the form of E-HRM, and often offers more specific or even targeted functions for specific industries.

In these cases, it is best to compare the functions offered by different systems and compare them to the internal needs of the company, as the price of human resources software can be a blow to the annual budget of any company.