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HRIS, HRMS, and HCM, whats the difference?

High level, each of these abbreviations represents a software system to help the HR  operations manage employee functions, systems and data.

The terms HRIS and HRMS are at times used interchangeably, however there are key differences between in each of these HR software solutions' features and functionalities.

Depending on the size of your organization, and operations you need to manage the best fit for you may vary.  Let's explore.
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What is a HRIS? 

HRIS, otherwise known as a Human Resources Information System is software solution that helps managers gather, organize, store, update and retrieve the information needed for managing employees. 

This could include storing employee licenses, benefits information, resumes or certifications. An HRIS is essentially the most basic and core system a restaurant might choose to use to manage their teams' information.

HRIS typically manage four types of static employee information, otherwise known as "core functionalities".  These core functionalities allow HR professionals to streamline their employee information, manage, and compensate them in an efficient way.

HRIS = Core functionalities.

The HRIS system covers the basic core functionalities that an HR professional may need to streamline their HR operations, those core functionalities include:
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1- Personal and job information.
Employee name, titles, birth date, gender, contact details, job position, etc. 

2 - Payroll integration.
Salary calculation and tax deduction.

3 - Administration and compliance of benefits.
(e.g., tax deduction, health insurance). 

4 - Tracking working hours.
Time tracking, attendance, and absences.

What are the benefits of a HRIS? 

As your employee base grows beyond 50, manually handling HR information becomes cumbersome. This is when the need for an HRIS becomes indispensable. 

Imagine all your HR data is stored, tracked, and updated in one location. Wouldn't that ease the administrative burden and save the time of your HR team? 

Apart from the decrease in administrative burden and improvement in collaboration, there are more benefits of using HRIS: 

• Faster completion of the tedious HR processes involving requests and approvals.
• Automatically track important data points leave accruals and balances. 
• Create bandwidth to focus on driving the strategic initiatives.
• Offer self-service HR to your employees and managers.
• Keep your organization on top of compliance regulations.
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These items are crucial not just for saving time and operations, but compliance is something that many HR departments and business owners fail to consider.

For example, it is mandatory by law that restaurant employees take regular breaks to avoid employee burnout. Manually tracking time is difficult. One of the secrets for scheduling employees is deploying an advanced time clock tracking to comply with the law.

All this data can be pulled into an HRIS system for safekeeping, and to avoid lawsuits.

What is a HRMS? 

‍HRMS software, otherwise known as a Human Resource Managment System, is a technological application that helps organizations to manage and maintain their employees. HRMS is more comprehensive than HRIS as it typically includes talent management functionalities such as hiring and onboarding, and employee performance management.
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To understand an HRMS system, you can consider the 4 basic core functionalities of the HRIS system, and add on top of them a layer of human management, and resources.

A HRMS solution delves deeper into talent management and focuses on the critical HR processes involved in an employee lifecycle.
Its three additional features are recruiting, onboarding, and performance management. 

HRMS = Core functionalities + talent management.

The HRMS system covers the basic core functionalities that an HR professional may need to streamline their HR operations, plus additional people management tools.

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HRMS Core functionalities:

1 - Personal and job information.
Employee name, titles, birth date, gender, contact details, job position, etc. 

2 - Payroll integration.
Salary calculation and tax deduction.

3 - Administration and compliance of benefits.
(e.g., tax deduction, health insurance). 

4 - Tracking working hours.
Time tracking, attendance, and absences.

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HRMS Talent managment functionalities:

1. Recruiting and applicant tracking.
Automate postings for job openings, receive online applications, track candidates and manage hiring workflows.

2. Hiring and onboarding.
Internal interview checklists, automate paperwork, track training progress, and streamline the new hire process.

3. Performance management.
Establish KPIs, evaluate performance, appraisals, and promotions. 

While HRIS is the most basic HR solution that automates the core HR administrative tasks, HRMS is an enhanced solution with additional features. It is at an intersection between HRIS and HCM – more comprehensive than HRIS but not as extensive as HCM. 

What are the benefits of a HRMS?

For restaurants, using an HRMS system is key as it allows for easy hiring and onboarding, a task that can be cumbersome in the age of the great resignation. Other benefits of using an HRMS include: 

• Smooth onboarding - HRMS solution offers a smooth onboarding process that in turn creates a pleasant experience for the new hires. Imagine your new hires can complete all their paperwork even before their day of joining. Won't that make an excellent first impression? 

• Encourage collaboration – HRMS comes with in-built social collaboration tools that are so crucial for engaging Millennials, and Gen Z. Employees can reward and recognize their peers, share work updates, and stay connected. 
• Improved performance – When employees have greater clarity about their goals and the company's expectations, it helps them put their efforts in the right direction, leaving little scope for misses and errors. 
  

And, of course, all this translates to a wonderful experience for your employees. 

HRMS allows you to build a happy and confident workforce which is equal to better productivity and commitment. Push offers an all-in-one HR platform, or HRMS, that integrates Payroll, HR, Scheduling, and time tracking to manage the entire employee life cycle. You can hire and onboard, track time and attendance, schedule, run payroll, manage KPIs, performance, and create reports from one or multiple locations.

What is HCM? 

Introducing HCM, or human capital management.
‍ The HCM solution is the broadest in scope compared to the other two HR solutions – HRIS and HRMS.  It resonates with the philosophy that employees are a valuable asset for an organization and strategically driving employee management to create business impact. 
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It includes all the HRMS features along with enterprise-level capabilities, including workforce management and optimization, such as budgeting, analytics, and compensation, and business intelligence tools to visualize current trends and predict future needs. 
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HMC capabilities and functions:

1 - HRMS functions.
Including core functions like payroll, time tracking and workforce, plus talent benefits such as benefits administration, onboarding, compliance management, and maintenance of employee data.

2- Workforce management suite.
Including recruitment, performance management, learning & development, and succession planning.

3- Workforce optimization and investment tracking.
Including workforce planning, scheduling, and budgeting. It aids decision-making related to deploying employees with the necessary skills to particular projects, departments, and regions. 

4 - Service and support.
Service delivery including HR help desks, intranet portals, employee self-service, and manager self-service. 

A Harvard Business Review research study highlights in the retail industry more stable scheduling increased sales and labor productivity by 7% and 5%, respectively. Retail companies using Push HCM software solution integrated with their POS systems reiterates the above fact.  

What are the benefits of an HCM? 

For growing companies who are investing in education or career development for their employees, and HCM could be a solution that can help track these things, while still managing basic HR functionalities.  

• Allow business managers to model workforce needs based on changes in business strategy.
• Help to identify and nurture in-house talent. 
• Show compensation spends in multiple ways, e.g., according to regions, pay grade, or department wise. This can help you re-define your compensation strategy. 
• Match the learning & development needs of employees with all the available opportunities in the organization
• Get real-time reports to manage your labor cost better.

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Let's sum it up. 

• HRIS offers the most basic functionalities to automate the core HR administrative processes
• HRMS allows automating onboarding and performance management along with the core HR administrative processes offered by the HRIS.
• HCM brings in more strategic focus with the enterprise-level capabilities to drive HR decisions with business impact. 

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How do I pick the right HR solution for my restaurant? 

Every organization is unique. The right HR solution is the one that meets the specific needs of your organization.  For restaurants however, an important tool to have would be applicant tracking, hiring and onboarding. Therefore, an HRMS might be the best fit.

Other important things to look for when selecting an HR software solution for your restaurant would be to consider if it can integrate with the rest of your software suite, including payroll and workforce management.

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5 Steps to selecting your restaurant HR software.
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1 - Make a team.

Put together a project team that includes all the critical stakeholders like HR, line managers, IT, and payroll. Don't forget to include the legal department to ensure the HR software solution complies with the local and regional laws. 

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2 - Understand the needs of your organization.

• Outline the workflow for HR processes
• Talk to the employees, managers, and HR teams regarding the issues they are facing
• Take into account the long-term business and HR plans
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3 - Prioritize your software requirements.

By knowing what you need, you'll be in a better position to control the selection process rather than let software vendors dictate your needs.

• Start with the problems you want to solve
• Analyze the shortcomings of your current system
• Prioritize as "must-have" and "nice to have" features 

4 - Conduct extensive market research.

Conduct research to identify reputable HR software vendors. Shortlist at least five HR software solution vendors who offer products with features and functionalities that meet your needs and budget. Suggested criteria to shortlist are: 

• HR specialty they serve
• Business size they serve
• Key features and functionalities offered
• Must be within your budget
  

5 - Schedule demos and get references.

Connect with selected solutions with the shortlisted HR software vendors to request live demos. This will allow you to preview the software.

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Making people management easy.‍

The right HR software for restaurants alleviates HR pain points by automating administrative tasks, record-keeping, aiding in compliance, and giving HR managers tools to find and retain the best talent.

Also, as there is a crucial need for automating and centralizing workflows to improve efficiency in core administrative tasks like payroll, hiring, managing employee performance, and record-keeping for compliance, it should integrate with the rest of your people management suite. 

In parallel with facilitating smooth HR operations and employee lifecycle management, focusing on internal communication strategies can significantly enhance workforce productivity and well-being by ensuring employees are aligned with organizational goals and changes. Emphasizing the role of technology in supporting efficient communication methods is fundamental for nurturing a connected and engaged team environment.

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We hope this post helped clear all of your questions around restaurant HR  tools, including HRIS, HRMS, and HCM, so you can feel confident in selecting the right HR software for your business!  

Looking for help with employee retention?  Be sure to check out our free checklist templates below!