There are more HR software solutions on the market than ever, making it difficult to choose between them. Will a standalone payroll software be enough or should I opt for HRIS software? Would the more comprehensive features of HCM be a better fit for your business than HRIS? Is ERP software too complicated for your business needs or is it exactly what you were looking for?
In this guide, we compare payroll software to HRIS, ERP, and HCM to help you decide what type of software you need for your business.
Payroll Software vs. HRIS vs. ERP vs. HCM: Comparison Table
| payroll software | HRIS | ERP | HCM | |
|---|---|---|---|---|
| Potential customers | Small companies | Small companies | Companies | Medium and large companies |
| Main features | Unlimited payroll runs, tax calculations and filings, direct deposit | Employee self-service, recruiting tools, benefits administration | Financial management, supply chain management, reporting and analysis. | Performance management, compensation management, learning management. |
| Prices | $ | $$ | $$$$ | $$$ |
Payroll Software vs. HRIS vs. ERP vs. HCM: Pricing
Payroll software pricing
Most payroll software charges a base monthly fee of $30 to $40 per month, plus an additional fee of $4 to $8 per paid employee per month. Payroll software is typically more affordable than HRIS, ERP, or HCM software since it is a standalone product for a single service.
SIRH prices
HRIS pricing is usually a little more expensive than payroll software. Monthly prices typically start at $40 per month and can range up to $100 per month, plus a fee of $8 to $12 per employee per month. Some features (such as benefits management) may only be add-ons, which will increase the price even further.
ERP Pricing
ERP prices vary greatly depending on the size of your company, both the number of employees and sales volume. ERP software for a smaller business can cost around $2,000 per month, while enterprises may be charged $10,000 per month or more.
HCM Pricing
HCM software costs fall between HRIS and ERP prices. These software platforms typically charge per employee, with rates ranging from $50 to $100 per employee per month. Adding optional features, such as learning management, will increase the cost even further.
Feature Comparison: Payroll Software vs. HRIS vs. ERP vs. HCM
Payroll Software Features
Payroll software helps businesses of all sizes manage payroll quickly and accurately. It should also automatically calculate and file all necessary federal, state, and local taxes to ensure your business is in compliance. Some payroll software offers several HR features in addition to payroll, although you may have to upgrade to a more expensive plan to access them.
These are the main features to look for in payroll software.
Unlimited payroll runs
Some payroll software charges for each individual payroll run, resulting in increased costs. Look for payroll software like Gusto that allows unlimited payroll runs on each pricing plan so you don't rack up charges for frequent pay runs.
Tax calculations and presentation.
If you do not properly calculate and file your payroll taxes, your business could be subject to an audit and heavy fines. Most payroll software will automatically calculate and file all payroll taxes so you never have to worry about calculations again.
Direct deposit
Most payroll software now offers direct deposit, although faster turnaround times, such as next-day deposit, may only be available on more expensive plans. Not all platforms offer a same-day deposit option, so if that's important to your business, prioritize it during your search.
HRIS Software Features
HRIS stands for “human resources information system.” HRIS software focuses on data management and automation of repetitive tasks. HRIS software is primarily aimed at small and medium-sized businesses that do not have more complex human resources needs. HRIS solutions typically include payroll and other functions, such as time tracking, benefits administration, and employee self-onboarding.
These are the main features to look for in HRIS software
Employee self-service
One of the great benefits of HRIS software is employee self-service options. This means employees can do everything from access their pay stubs to choose their health insurance plan, all without needing someone on the HR team to do it for them.
Recruitment tools
Most HRIS systems offer tools to support recruiting, interviewing, and hiring. These range from one-click job postings and interview rubrics to comprehensive applicant tracking systems (ATS) that store and manage every application your team receives.
Benefits Administration
HRIS software partners with insurance brokers so you can find the plans that work best for your business and your employees. After your employees make their selection, the software will make the necessary calculations and deductions for each person.
ERP Software Features
ERP stands for “enterprise resource planning.” ERP providers make it possible to manage all business functions in a single software system. ERP encompasses not only payroll and human resources, but also accounting, finance, manufacturing, procurement, sales, supply chain, and more. Due to its breadth, ERP is often used by very large companies and companies, hence the name.
These are the main features you should look for in ERP software.
Financial management
ERP software goes far beyond basic accounting and into complex financial management. The finance module will pull data from other parts of the software, such as sales and supply chain, and compile it all into centralized reports and forecasts.
Supply chain management
Whether your company manufactures its own products or simply purchases them from third-party suppliers, ERP software offers modules to support the entire supply chain. You can compare raw material prices, monitor inventory level, and track transportation, all from within ERP software.
Reports and analysis
Reporting and analytics, also known as business intelligence, are absolutely essential for decision making, especially in businesses. The best ERP software will incorporate analytics into each module and offer a dedicated module strictly for reporting.
HCM Software Features
HCM stands for “human capital management.” As the name suggests, HCM software focuses on human resources functions, but goes far beyond the capabilities of payroll and HRIS software. HCM software is a good option for medium to large businesses that have outgrown HRIS software but don't need comprehensive all-in-one software like ERP.
These are the main features to look for in HCM software.
Performance management
Performance management software helps managers and employees work together to set and achieve goals. Many HCM systems support all types of performance management programs, from weekly check-ins to annual reviews.
Compensation management
Compensation management software helps your company offer competitive salaries and raises while staying within your budget. This module will also automate calculations for bonuses, commissions, and more to ensure your data is accurate every time you run payroll.
Learning management
The best HCM software includes a learning management system built into the tool. Learning management systems allow your company to design customized training and compliance programs and track employee completion progress.
Pros and Cons: Payroll Software vs. HRIS vs. ERP vs. HCM
Pros and cons of payroll software
Advantages
- It is generally more affordable than HRIS, ERP and HCM software.
- Very suitable for small businesses looking to pay their employees.
- It offers a lower learning curve than other types of HR software.
- Helps ensure compliance and reduce liability.
Cons
- More expensive than completing payroll manually.
- It lacks some features that more robust HR software offers.
- It may not be complex enough for large companies.
Pros and cons of HRIS
Advantages
- Typically combines payroll with basic human resources functions.
- Centralized digital storage for all HR documents.
- Beneficial for small HR teams that need software support.
- Employee self-services reduce the work of the human resources team.
Cons
- More expensive than standalone payroll software.
- It does not have as many features as ERP and HCM software.
- Not suitable for larger companies with more complex human resources needs.
Pros and cons of ERP software
Advantages
- Centralize all business functions in a single software.
- Minimizes the need for multiple enterprise software products.
- Includes advanced business intelligence.
- Provides modules for many departments outside of HR.
Cons
- Very expensive.
- A high learning curve is difficult to master.
- Its implementation is complex and time-consuming.
Pros and cons of HCM
Advantages
- More robust HR functions than HRIS software.
- Suitable for medium and large growing companies.
- You can manage the entire employee lifecycle in one software.
- Easier than cobbling together several standalone HR tools.
Cons
- It is generally more expensive than HRIS software.
- It has a longer learning curve than HRIS software.
- It could be too much for small businesses.
What software should your organization use?
- If you are a small business that just needs help paying your employees, then payroll software should be enough for your needs.
- If you want basic HR tools in addition to payroll, then HRIS software might be a better option without increasing the cost too much.
- If you are a medium or large company looking for more comprehensive HR solutions, then HCM software could be what you are looking for.
- If you are a large enterprise or a company looking for a full enterprise software stack, not just HR software, consider ERP software.
