The 10 Best HCM Software To Manage Your HR Needs in One Place

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When in the market for an HCM, the main thing you want to watch out for is picking a system that actually delivers on the practices that define human capital management. Unfortunately, HCM is little more than a buzzword for some people, to the point that they’ll throw the term here and there even if they don’t really have a product that addresses those requirements.

So how do you make sure that you’ll get what you need? If we take a tip from ADP’s 10 tips for evaluating HCM systems, the best bet is to identify your future HCM requirements first. This entails defining what you want to accomplish in terms of employee management and HR functions, and understanding how this may be underserved right now by current tech stack. 

In other words, narrowing down what you expect from the tool and understanding whether it’s an HCM suite you need or just a regular HR management tool. The two tend to be confused with each other, and there are times where you could get the exact functionality you need from core HR software and spend less; even if you need to get additional tools, such as an applicant tracking system or a payroll management tool.

The thing with almost every HCM solution is that they’re built for the enterprise sector. Some of them are certainly made to accommodate SMBs, or any sort of organization size, but even in those cases, pricing is rarely discussed up front. 

The reason for this, like with a lot of SaaS tools, is that costs can vary widely depending on the actual size of your business (however big) and the needs you’re looking to cover. For instance, some vendors will have a Core HR product that is priced per employee per month, and separately-priced modules for more particular necessities like benefits management and employee experience.

In order to build a list of requirements and use it effectively to evaluate vendors, it will help to know which are the key HCM software features and how these can support your goals. 

As mentioned at the beginning of this article, human capital management software is implemented in three categories; workforce acquisition, workforce management, and workforce optimization. We’ll look at the key features from each category: 

• Workforce Acquisition: This part of HCM is concerned with managing applicant tracking, recruitment, onboarding, and pretty much every early stage of the employee lifecycle. For modern tools, it should also include employee self-service so you know the recruitment and onboarding process can be expedited. 
• Workforce Management: Although sometimes a category of its own, for the purposes of HCM, this is the tier where we could consider all the core HR tools. These include the daily administrative work of the HR department, such as payroll, benefits administration, leave and absence management, time tracking, and an HR service center. For features in this category, you should look mainly towards automation and efficiency. ‍
• Workforce Optimization: This is where the ‘workforce as competitive advantage’ part of HCM really finds its momentum. Optimizing the workforce to align with business goals includes performance management, workforce planning, training & learning management, employee engagement, and reporting & analytics. This category is all about generating actionable insights that let you use data in your decision making and make sure that HR is doing its part in steering the workforce in the proper direction.

As you start demoing various HCM software solutions, it’s important to prepare and attend these meetings with some questions already in mind. These inquiries should aim at answering whether the solution in question will indeed address the main use cases and core needs that you’re looking for. 

Of course, the most concerning of these questions shouldn’t be saved for the demo at all, but rather handled prior, through an email thread for instance, so you won’t waste time on a demo if X or Y solution turns out to be incompatible with your core needs. 

Further, the demo should also help check certain boxes that your internal stakeholders care about, such as integrations, security, data management, self-service portals, features, etc. 

You should write down a list of those questions, share it with your team, and maybe have stakeholders add to it as well. While that list will be unique, here are some common questions when demoing an HCM that should help get you started: 

• What integrations are key to us? Does it integrate with ATS/payroll system/any other systems you might have that impact workforce management?
• Does this solution have SSO capabilities?
• Are there multiple authorization levels for different types of users?
• Is there a maximum number of employees it will support across the workforce?
• What types of reporting capabilities does it have?
• Does it include features to help HR communicate with employees (i.e. mass emails, filtering messages by criteria)?
• What kind of tasks can we automate or streamline with this tool? How many man hours can we expect to save doing so? 
• How much technical training will be required?
• What kinds of technical support are provided?
• What recruiting capabilities are built-in?
• Which HR processes will be automated?
• How will information be exchanged with carriers (for employee benefits)?
• Does it accommodate benefits carriers’ rules?
• How can we import employee data into this system? (API, Excel spreadsheets, employee records, other databases, and paper documents)
• What built-in security measures does it contain?
• Does your solution feature pandemic-related tools like a vaccine management system?

Moving on, here are some of the most frequently asked questions from HR professionals when it comes to human capital management software: 

What is the best HCM system?

While some of the top vendors in HCM software are Workday, SAP SuccessFactors, ADP Workforce, and UKG, “the best” is really a matter of your business size and requirements. There are many HCM vendors, out of which there are likely 1-2 that will align perfectly with what you’re looking for. 

What is the difference between HCM, HRMS, and HRIS?

The main difference between HRIS, HRMS, and HCM is that the former two refer to a specific type of software, systems of information, as their names imply (human resource information system and human resource management systems). HCM, on the other hand, stands for human capital management. This is a set of business practices around the acquisition, management, and optimization of a business’s workforce. 

What is HCM software?

HCM software is a software tool that takes most features that you would expect out of a labor management platform, but builds it purposefully for the business practices that encompass human capital management. This software puts together widely-varying features such as workforce planning, performance reviews, and employee onboarding in a single management platform where they can all help to generate insights that drive broader business decision making.

Why do definitions of HCM, HRMS, and HRIS vary so much? 

This is a good question precisely because the definition of each term varies widely from vendor to vendor, and among HR professionals as well. That being said, the differences between each software category are all about features and use cases. Most thought leadership indicates that HRIS is the most circumscribed type of solution, focusing on core HR needs. HRMS takes it up a notch in features, while still sticking to HR use cases, and HCM is about rounding up all those features with strategic planning for the business in mind, with the workforce as the main component to analyze and optimize.