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Which one is right for you?

There are more HR software solutions on the market than ever before, which makes choosing between them difficult. Is standalone payroll software enough, or should I choose HRIS software? Are the more comprehensive features of HCM a better fit for your company than an HRIS? Is ERP software too complex for your business needs or what you’ve been looking for?

In this guide, we compare payroll software, HRIS, ERP, and HCM to help you decide what type of software your business needs.

Payroll Software, HRIS, ERP, HCM: Comparison Chart

Payroll software Human Resources Information System Enterprise Resource Planning hypertrophic cardiomyopathy
Target customers small companies small companies enterprise Large and medium-sized enterprises
main feature Unlimited payroll calculations, tax calculations and filings, direct deposits Employee self-service, recruiting tools, benefits management Financial Management, Supply Chain Management, Reporting and Analysis Performance management, salary management, learning management
Price $ $$ $$$$ $$$

Payroll Software, HRIS, ERP, 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 per month. Payroll software is typically less expensive than HRIS, ERP, or HCM software because it is a standalone product for a single service.

Human Resources Information System Pricing

HRIS pricing is typically a little more expensive than payroll software. Monthly prices typically start at $40 per month and go up to $100 per month, plus $8 to $12 per employee per month. Some features, such as benefits management, may be just add-ons, which will further increase the price.

ERP pricing

ERP pricing varies widely based on the size of your business (number of employees and sales). ERP software may start at around $2,000 per month for a small company, while an enterprise may pay $10,000 per month or more.

HCM Pricing

HCM software costs fall between HRIS and ERP prices. These software platforms typically charge per employee, ranging from $50 to $100 per employee per month. Adding optional features such as learning management will further increase the cost.

Feature Comparison: Payroll Software, HRIS, ERP, 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 remains compliant. Some payroll software offers a variety of HR features in addition to payroll, although you may need to upgrade to a more expensive plan to use them.

Here are the top features to look for in payroll software.

Unlimited payroll runs

Some payroll software charges for each payroll run, driving up costs. Look for payroll software like Gusto, which allows unlimited payroll runs on each pricing plan so you don’t incur fees for frequent payroll runs.

Tax calculation and filing

If you don’t properly calculate and file payroll taxes, your business could be subject to an audit and hefty fines. Most payroll software automatically calculates and files all your payroll taxes for you so you don’t have to worry about the math anymore.

direct deposit

Most payroll software now offers direct deposit, but faster turnaround times (such as next-day deposits) may only be available on more expensive plans. Not every platform offers same-day deposit options, so if this is important to your company, prioritize it during your search.

Human resources information system software functions

HRIS stands for “Human Resources Information System.” HRIS software focuses on managing data and automating repetitive tasks. HRIS software is primarily aimed at small and medium-sized businesses that do not have more complex HR needs. HRIS solutions often include payroll as well as other features such as time tracking, benefits administration, and employee self-service onboarding.

The following are the main functions of 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 check their pay stub to choose a health insurance plan, all without someone from the HR team doing it for them.

Recruitment tools

Most HRIS systems provide tools to support recruiting, interviewing, and hiring. These range from one-click job posting and interview rules to a full-blown Applicant Tracking System (ATS) that stores and manages every application your team receives.

Benefits management

HRIS software works with insurance brokers so you can find the best plan for your business and employees. After your employees make their selections, the software will make the necessary calculations and deductions for each individual.

ERP software features

ERP stands for “Enterprise Resource Planning.” ERP vendors make it possible to manage every business function on one software system. ERP covers not only payroll and human resources, but also accounting, finance, manufacturing, procurement, sales, supply chain, etc. Due to its comprehensive nature, ERP is commonly used by large companies and businesses, hence its name.

Here are the main features to look for in ERP software.

Financial Management

ERP software goes far beyond basic accounting to cover 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 business manufactures its own products or simply sources them from outside suppliers, ERP software offers modules to support the entire supply chain. You can compare raw material prices, keep an eye on inventory levels, and track shipments in ERP software.

Reporting and Analysis

Reporting and analytics, aka business intelligence, are absolutely essential for decision-making, especially in businesses. The best ERP software will embed analytics into every module and provide dedicated modules 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 very suitable for large and medium-sized enterprises whose HRIS software can no longer meet their needs but does not need comprehensive integrated software such as 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 achieve goals. Many HCM systems support a variety of performance management programs, from weekly check-ins to annual reviews.

Payroll management

Payroll management software can help your business offer competitive salaries and raises while still staying within budget. The module will also automatically calculate 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. A learning management system allows your company to design custom training and compliance programs and track employee progress toward completion.

Pros and Cons: Payroll software, HRIS, ERP, HCM

Advantages and Disadvantages of Payroll Software

advantage

  • Typically more affordable than HRIS, ERP and HCM software.
  • Ideal for small businesses looking to pay their employees.
  • The learning curve is lower compared to other types of HR software.
  • Helps ensure compliance and reduce liability.

shortcoming

  • More expensive than completing payroll manually.
  • Lacks some of the features offered by more powerful HR software.
  • Might not be complex enough for large enterprises.

Advantages and Disadvantages of Human Resources Information Systems

advantage

  • Payroll is often combined with basic HR functions.
  • Centralized digital storage of all HR documents.
  • Good for small HR teams who need software support.
  • Employee self-service reduces the work of the HR team.

shortcoming

  • More expensive than standalone payroll software.
  • Not as feature-rich as ERP and HCM software.
  • Not suitable for large enterprises with more complex human resources needs.

Advantages and disadvantages of ERP software

advantage

  • Centralize all business functions in one software.
  • Minimize the need for multiple business software products.
  • Includes advanced business intelligence.
  • Provides modules for many departments beyond HR.

shortcoming

  • Very expensive.
  • High learning curve and difficult to master.
  • It is complex and time-consuming to implement.

Advantages and Disadvantages of HCM

advantage

  • More powerful HR functions than HRIS software.
  • Ideal for growing mid-sized and large businesses.
  • The entire employee lifecycle can be managed in one software.
  • Easier than cobbling together multiple separate HR tools.

shortcoming

  • Typically more expensive than HRIS software.
  • The learning curve is higher compared to HRIS software.
  • It may 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, payroll software should be enough to meet your needs.
  • If you need basic HR tools in addition to payroll, HRIS software may be a better fit without being cost-prohibitive.
  • If you are a mid-sized or large business looking for a more comprehensive HR solution, then HCM software may be what you need.
  • If you are a large company or enterprise looking for the entire business software stack (not just HR software), consider ERP software.

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