You will often hear the terms HCM (Human Capital Management) and HRM (Human Resource Management) used interchangeably and in some respects this is accurate. However, there are some key differences of which you should be aware if you are looking for the right software for your Human Resources department. Here’s a look at the two types of software and then a look at a couple of the advantages to be found in HCM software.
HCM vs. HRM – What Is the Difference?
According to EPAY Systems, HCM software is, in their words, “the more all-encompassing” of the two similar software platforms. What they find to be the main difference is that HRM platforms historically focus on such things as timekeeping and payroll whereas HCM software integrates location-specific laws with key administrative tasks of employee management. HCM software is all-inclusive whereas HRM software implies the use of subsets of software working in conjunction with the master program.
1. No Need for Software Integration
To this end, there is no need to buy and integrate other programs to work with the main HR platform. HCM, then, is more cost-effective and easier to navigate. There is no need to see if other software will work with the main system because everything is contained in the platform from recruitment to taxation and a whole host of other criteria that aren’t inherent in HRM platforms.
2. A Consolidation of Strategies
As mentioned, Human Capital Management is the more all-inclusive of the two, but what does that really mean in terms of business operations? Actually, it says a whole lot. HCM software makes it possible to consolidate business strategies with employment strategies and management. Perhaps it would be best stated like this. HCM software is aimed at achieving business strategies as defined by the Board of Directors or the Owner if there is no board. However, in addition to that, HCM software also holds the personal ambitions and goals of employees so that an overlapping ‘match’ can be made. Those employees best equipped and geared toward specific business strategies can be appropriately placed. With HRM software, HR personnel make the match. In other words, HCM software eases the burden placed on HR staff when filling key positions.
3. Better Utilization of Resources
Since HCM software contains the core business strategies along with key ambitions and goals of employees, it allows for better utilization of company resources. Not only can employees be utilized to the best of their goals and abilities but company time and resources aren’t wasted in the process. Bear in mind that employees are some of a company’s key resources/assets and it is imperative to utilize assets where they can be of the highest benefit. This is what HCM software can do for your company.
Given the choice in terms of cost and reach, HCM software would be the most highly recommended. There is no need to download compatible software to work with an all-encompassing HR system and it surely is much less expensive when just one system can be purchased. Given the choice, which would you choose for your company?