There are more HR software solutions on the market than ever before, which makes choosing between them difficult. Will a standalone payroll software suffice, or should you opt for HRIS software instead? Would HCM’s more comprehensive features be a better fit for your company than HRIS? Is ERP software too complicated for your business’ needs, or exactly what you’ve been looking for?
In this guide, we compare payroll software vs. HRIS vs. ERP vs. HCM to help you decide what type of software you need for your business.
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Payroll software vs. HRIS vs. ERP vs. HCM: Comparison table
| Payroll software | HRIS | ERP | HCM | |
|---|---|---|---|---|
| Target customers | Small businesses | Small businesses | Enterprises | Medium and large businesses |
| Main features | Unlimited payroll runs, tax calculations and filing, direct deposit | Employee self-service, recruiting tools, benefits administration | Financial management, supply chain management, reporting and analytics | Performance management, compensation management, learning management |
| Pricing | $ | $$ | $$$$ | $$$ |
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 employee paid per month. Payroll software is usually more affordable than HRIS, ERP or HCM software since it’s a standalone product for a single service.
HRIS pricing
HRIS pricing is typically a bit more expensive than payroll software. The 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 administration) may be add-on only, which will increase the price further.
ERP pricing
ERP pricing varies wildly based on the size of your business — both the number of employees and the volume of sales. ERP software for a smaller company might start around $2,000 a month, while enterprises might be charged $10,000 a month or more.
HCM pricing
HCM software costs fall between HRIS and ERP prices. These software platforms usually charge per employee, with fees ranging from $50 to $100 per employee per month. Adding on optional features such as learning management will increase the cost further.
Feature comparison: Payroll software vs. HRIS vs. ERP vs. HCM
Payroll software features
Payroll software helps businesses of all sizes run payroll quickly and accurately. It should also automatically calculate and file all necessary federal, state and local taxes to ensure your business stays compliant. Some payroll software offer various HR features in addition to payroll, although you may have to upgrade to a more expensive plan to get access to them.
Here are the main features to look for in payroll software.
Unlimited payroll runs
Some payroll software charge for each individual payroll run, causing costs to rise. Look for a payroll software like Gusto that allows for unlimited payroll runs on each pricing plan so you won’t rack up charges for frequent pay runs.
Tax calculations and filing
If you don’t properly calculate and file your payroll taxes, your business could be subject to an audit and hefty fines. Most payroll software will automatically calculate and file all payroll taxes for you so that you never have to worry about the math again.
Direct deposit
Most payroll software now offers direct deposit, though faster turnaround times — such as next-day deposit — may only be available on more expensive plans. Not every platform offers a same-day deposit option, so if that matters to your company, prioritize that during your search.
HRIS software features
HRIS stands for “human resources information system.” HRIS software is focused on managing data and automating repetitive tasks. HRIS software is mostly targeted towards small and midsize businesses that don’t have more complex HR needs. HRIS solutions typically include payroll as well as other features such as time tracking, benefits administration and employee self-onboarding.
Here are the main features to look for in HRIS software
Employee self-service
One of the big benefits of HRIS software is the employee self-service options. This means that employees can do everything from accessing their pay stubs to choosing their health insurance plan, all without needing someone on the HR team to do it for them.
Recruiting tools
Most HRIS systems offer tools to support recruiting, interviewing and hiring. These range from one-click job postings and interview rubrics to full-blown applicant tracking systems (ATS) that store and manage every single application your team gets.
Benefits administration
HRIS software partners with insurance brokers so you can find the plans that work best for your business and 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 vendors make it possible to manage every business function on one single software system. ERP encompasses not just payroll and human resources but also accounting, finance, manufacturing, procurement, sales, supply chain and more. Because of its comprehensiveness, ERP is typically used by very large companies and enterprises, hence the name.
Here are the main features to look for in ERP software.
Financial management
ERP software goes far beyond basic accounting to complex financial management. The finance module will pull in 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 business manufactures its own products or simply procures them from outside suppliers, ERP software offers modules to support the entire supply chain. You can compare prices for raw materials, keep an eye on inventory level and track transportation all within ERP software.
Reporting and analytics
Reporting and analytics, a.k.a., business intelligence, is absolutely essential for decision-making, especially at enterprises. The best ERP software will embed analytics into each module as well as offer a dedicated module that is strictly for reporting.
HCM software features
HCM stands for “human capital management.” As the name suggests, HCM software focuses on HR functions, but it goes far beyond the capabilities of payroll and HRIS software. HCM software is a good fit for medium and large businesses that have outgrown HRIS software but don’t need a comprehensive all-in-one software like ERP.
Here are the main features to look for in HCM software.
Performance management
Performance management software helps managers and employees work together to set and meet goals. Many HCM systems support all sorts of performance management programs, from weekly check-ins to annual reviews.
Compensation management
Compensation management software helps your business offer competitive salaries and raises while still 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 custom training and compliance programs and track employees’ completion progress.
Pros and cons: Payroll software vs. HRIS vs. ERP vs. HCM
Payroll software pros and cons
Pros
- Usually more affordable than HRIS, ERP and HCM software.
- Well-suited to small businesses looking to pay employees.
- Offers a lower learning curve than other types of HR software.
- Helps ensure compliance and reduce liability.
Cons
- More expensive than completing payroll manually.
- Lacks some features that are offered by more robust HR software.
- May not be complex enough for large businesses.
HRIS pros and cons
Pros
- Typically combines payroll with basic HR features.
- Centralized digital storage for all HR documents.
- Beneficial for small HR teams that need software support.
- Employee self-services reduces work for the HR team.
Cons
- More expensive than standalone payroll software.
- Not as feature-rich as ERP and HCM software.
- Not suitable for larger businesses with more complex HR needs.
ERP software pros and cons
Pros
- Centralizes all business functions in one software.
- Minimizes the need for multiple business software products.
- Includes advanced business intelligence.
- Provides modules for many departments outside HR.
Cons
- Very expensive.
- High learning curve is difficult to master.
- Complex and time consuming to implement.
HCM pros and cons
Pros
- More robust HR features than HRIS software.
- Suitable for growing medium and large businesses.
- Can manage the entire employee lifecycle in one software.
- Easier than cobbling together multiple separate HR tools.
Cons
- Usually more expensive than HRIS software.
- Presents a higher learning curve than HRIS software.
- Might be too much for small businesses.
Which software should your organization use?
- If you’re a small business that just needs help paying your employees, then payroll software should suffice for your needs.
- If you want basic HR tools in addition to payroll, then HRIS software might be a better fit without driving the cost up too high.
- If you’re a medium or large business looking for more comprehensive HR solutions, then HCM software might be what you’re looking for.
- If you’re a large company or enterprise seeking an entire business software stack — not just HR software — consider ERP software instead.