HR and marketing professionals seem to interchange the terminology used to describe HR technology solutions. HCM (Human Capital Management) and HRM (Human Resource Management) are the most common terms used. Are they the same?
Though often used interchangeably with no universal consensus, there are differences between the two from an historical evolution perspective.
What is HCM?
HCM is the more all-encompassing term, describing functions that are part of the global, strategic management of human capital in an organization from talent and applicant tracking to salary planning and analytics. It also includes budgeting, performance management and onboarding. Managing the implications of a global workforce includes country specific, jurisdictional and legal requirements as well as language and currency. HCM relies on human expertise to construct, plan and execute on strategies that will build and manage effective workforce productivity. Each critical area of the business is analyzed along with core HR data that is collected and provided to management to sustain effective decision making.
What is HRM?
HRM systems encompass the elements known historically in human resources information systems focusing on the core payroll, time and labor management components (originally and oftentimes called HRIS or Human Resources Information Systems.) Additional technology systems used to manage HR functions are included under this umbrella such as benefits administration, employee self-service and management reporting. These systems often are limited to having one or two core strength services but link together additional HR functionality through workarounds and partnerships with third party vendors or through company acquisition.
HRM can be seen as a term to describe HR technology services where HCM ties into the broader, more strategic HR planning disciplines.
Benefits of an HCM Solution
HCM strategy is critical for organizations that want to maximize the impact of their human capital to help realize their overall goals and objectives. Choosing a vendor that supports your HCM strategy both philosophically and technically is key to an organizations success. Integrated HCM provides all-encompassing tools over single function HRM solutions.
Human Resources has well moved beyond transactional processes and procedures. Human capital both in terms of the employment relationship as well as intellect capital has become the broader focus for organizations, consolidating Human Resources with overall business strategy. HCM vendors play a critical role in partnering with organizations to understand their human capital mission and achieve their overarching goals.
Ease Your HR Workload and Save Money
With one seamless platform and HR administrative services, EPAY Systems can ease the burden on your staff so you can get back to focusing on your core business. Our full suite of unified human capital management solutions help you recruit, staff, manage and pay your employees. Get started today with a personalized demo.