Our clients need answers, not acronyms, when they look for the right HR/Payroll tool for their company.

For a lot of reasons, there is no "one-size-fits-all" approach to vital HR needs like time tracking, payroll, benefits, and onboarding.  That's why it can be difficult for business owners and operators to filter through the marketing from providers of HRMS, HRIS, and PEOs to know which kind of solution makes the most sense for their company, or to compare solutions on an "apples-to-apples" basis.

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In plain language, here's what these categories of HR & Payroll solutions are all about:

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HRIS (Human Resource Information System)

HRISs are software and/or hardware platforms that will enable you to collect, store, manage, and retrieve employee-related data and information. An HRIS facilitates a company's HR processes using a centralized database or system that focuses on managing and organizing HR data.

 

HRMS (Human Resource Management System)

HRMSs are more feature-rich systems that integrate and automate HR-related tasks, data, and workflows for a wider range of core HR processes such as personnel tracking, payroll management, benefits administration, time and attendance, recruitment, performance management, training, and more.

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PEO (Professional Employer Organization

PEOs are specialized outsourced HR service providers that become co-employers of their client's employees, sharing certain employer responsibilities and liabilities like payroll processing, benefits administration, employee onboarding, compliance management, risk management, HR policy development, employee relations support, and assistance with regulatory compliance.

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Choosing the Right One: Cost, Capabilities, & Complexity

In general, HRIS solutions typically focus on managing employee data and streamlining HR processes without the extensive additional features found in HRMS platforms. As a result, HRIS systems may be more cost-effective for organizations that primarily require robust employee data management and basic HR process automation.

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PEOs provide comprehensive HR support and expertise, often acting as a co-employer for the business's employees. They handle various HR functions, including payroll, benefits administration, compliance, and employee relations. If your business lacks internal HR capabilities or requires extensive HR guidance and support, a PEO can be a valuable choice.

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Companies with a more demanding HR environment might be better served by HRMS solutions with a broader range of advanced functionalities such as workflow automation, reporting and analytics, compliance tracking, self-service portals, and customizable workflows.  If your company fits that description, an HRMS' extra dimension of payroll management, benefits administration, and performance management, in addition to core HR functions, could be worth its weight in gold to you.

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At DNI, we're committed to helping clients "right-size" their solution based on where they are, and where they're going.

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Each of these categories of systems (and sometimes a hybrid solution) have been the right fit for some of our clients.  Let us review your business case and share our knowledge of HR solutions with you.  Trust DNI to assess your objectives and help you choose the solution you need to take your business to the next level.