HCM Software

Human Capital Management Software or HCM Software is a system that helps in the efficient administration of the employees of an organization.

It provides human resources and related departments with enhanced tools that automate numerous HR functions such as payroll processing, absence management, time-tracking, workforce planning, recruitment, and others.

HCM Software Guide

What is (Human Capital Management) HCM Software?

Human Capital Management (HCM) Software is an effective solution that automates every function essential for effective workforce management. It streamlines the administrative HR processes of the team to save time and money for the company. The duties undertaken by an HCM software include:

• Employee Attendance

• Performance Tracking

• Recruitment & Onboarding

• Leave Management

• Employee Management

• Payroll System & Compliances

HCM software provides the employees and the HR department with a central, secure HR data repository, which ensures its integrity. As a result, it avoids the hassle of storing paper-based documentation, making it a highly time and cost-effective solution.

Which are the best HCM Software Applications in India?

For an in-depth review of each software, simply click on the corresponding links:

Elements of Human Capital Management Software

Various elements of HCM software ensure the correct functioning of all modules of the HCM system. These HR software elements support the human capital management efforts of the organization as they provide the HR professionals with several tools that ensure the smooth operation of the various departments in the company.


The most significant elements of HCM software are:

1. Core HR

Core HR refers to the must-have features of human capital management software, which include:

▸ Strategic HR

Strategic HR includes various human resources activities such as the development of engagement strategies, goal-setting, job structure creation, performance reviews, attrition prediction, managing employees, time and attendance management, and others.

▸ Compliance Management

With active compliance management, HRs can rest easy knowing that their human capital management software is actively monitoring for security lapses and reporting them to the concerned department.

▸ Employee Engagement

HCM solutions also include modules dedicated to improving engagement, such as employee welfare planning, survey creation and sharing, employer branding, employee self-service, work culture development, and other activities.

2. Talent Management

Talent management refers to the various strategies and global HR operations related to hiring and retaining human capital, such as:

▸ Talent Acquisition

It deals with creating jobs, designations, and salary structures, and sharing the same for recruiting talented candidates, creating an engaging candidate experience.

▸ Succession Management

Succession management evaluates the existing employees for leadership qualities and helps the HR develop plans for effective succession of leadership positions.

▸ Performance Management

Performance management refers to the steps the HR takes to ensure the employees maintain their performance to attain the organizational objectives. It includes the numerous KRAs and KPIs set for the employee to ensure adequate performance levels.

▸ Training

With training management, the HR department can develop various training programs and undertake them successfully. With this module, they can also schedule training sessions and quizzes and certify the employees.

3. Workforce Management

Workforce Management refers to the administration of the workforce using the software, including:

▸ Employee Compensation

It involves analysis, budgeting, administration, calculation, processing, and disbursal of employee compensation for their work. It is a demanding task, requiring dedicated software for efficient processing.

▸ Workforce Rewards

Recognizing and rewarding your employees go a long way in making them feel that they are part of a family. You can automate performance tracking with workforce rewards and easily reward the best performers.

▸ Staff Benefits

Staff benefits include the additional benefits employees enjoy on top of their compensation. It includes various benefits administration such as creches, unlimited snacks, and others.

What is HRIS?

What is the importance and use of HCM Systems?

Human Capital Management refers to the management of human resources in a company. Hence, the significance of an HCM system for any company lies in the fact that it can optimize the multitude of HR processes and streamline their execution. Since HCM systems automate several manual tasks of the HR department, it saves their valuable time, making them more productive. Additionally, HCM systems also provide the employees with a portal to voice their opinions and undertake their HR and employment-related tasks.

Using the Employee Self-Service (ESS) portals, the staff can accomplish numerous tasks such as marking their daily attendance and checking their previous attendance details, viewing and downloading their payslips, applying for leaves, reimbursements, on-duty, and more. Such easy access to a self-service portal helps them accomplish these tasks without the need to contact their HR.

Additionally, since the employees and the HR are constantly feeding the HCM systems with company and employee records, it can provide the HR with in-depth analytics regarding various metrics required to analyze the company’s current status. These metrics can range from employee attendance details to their attrition rate, cost per hire, leave patterns, and budget analytics, among others. Having such minute details at the tip of their fingers will enable HR managers to develop innovative strategies to optimize the business processes while keeping their employees engaged and satisfied with their organization.

Hence, we can conclude that the HCM system improves the efficiency of the HR team by multiple times by automating several of their manual tasks. Additionally, the software also keeps the employee engaged by improving the transparency of the employee-centric business processes.

How do HCM tools benefit your business?

Deploying human capital management software provides multiple benefits, such as:

▸ Data-backed Decisions

Human capital management software or HCM software provides the HR team with relevant data through predictive analytics that can help them make better decisions for the company.

▸ Improved Profitability​

Automation in workflows helps reduce errors and streamlines various HR tasks, making it cost-effective and providing significant savings in time and effort.

▸ Enhanced Growth

Human capital management software adapts to the company’s growth and can be scaled as and when required to ensure compatibility with the business data.

▸ Automated Compliance

Since HCM software, especially those deployed on the cloud, stays updated with the latest rules, it automates regulatory compliance, further simplifying HR processes.

▸ Secure Database

HCM Software provides additional security to the database, ensuring the safety of employee and business data. Additionally, it offers different user access for different users.

▸ Interactive Reporting

With interactive reporting, HRs can gather the exact data for any specific period and interpret meaningful inferences. It proves helpful in making data-backed decisions.

▸ Integrated Systems

HCM software can be integrated with other systems to enhance its functionalities. It helps the HR team further improve their business processes.

Essential HCM Software Features for any Organization

There are multiple key features of HCM systems that make them extremely valuable for any company in this digital age. Some of the most relevant ones are:


➔ Payroll Management

One of the most essential features of a human resources management system is payroll management. By managing employee payroll effectively, companies can gain the trust of their staff as well as ensure their retention.


Since salary is one of the basic motivating factors for an employee, it is essential to compensate them for their work as per industry norms by providing competitive salaries as well as added benefits.


HCM systems help you with understanding the industry standard for any designation in your company, while also providing you with a streamlined approach to handling their payroll processing operations.

➔ Analysis & Reporting

Since HCM systems deal with massive amounts of company data, these systems provide invaluable insights into employee behaviour and company operations. The HR professionals can analyze this data along with the upper management and make any changes as deemed necessary.


Along with in-depth data analytics, HCM systems also provide the user with multiple options to generate customized reports, which would be easier to understand. For example, if the HR management needs to provide insights to an external stakeholder, they will be able to generate visually rich reports using the HCM systems. Analytics and reporting play a major role in justifying the deployment of the HCM system in the company.

➔ Benefits Management

Another major feature of HCM systems is the ability to manage employee benefits administration. Since the cloud-based HCM system has all the data required to analyze the employees, it can suggest relevant rewards for them.


Additionally, it can also provide flexible employee benefit programs, which will also be beneficial for the company’s finances and budgeting constraints. It can also make the benefits administration program adapt to changing business requirements, taking the stress away from the human resource management and workforce planning. Cloud HCM suites will also help them avoid manual errors.

➔ Workforce Management

Undertaking workforce management is tough since it consists of numerous activities. Having a dedicated HCM system will enable the HR team to undertake various workforce management features: planning, shift scheduling, budgeting, training management, and more.


By undertaking workforce management effectively, the HR team can ensure satisfied employees. Since all aspects related to employees and their shifts, compensation management and payroll would be streamlined by the HR team with the help of the HCM system, they will be more likely to stay with their current company for longer.


Hence, workforce management is an essential feature of HCM systems, making it a strong suite for engagement of employees and their retention.

➔ Employee Self-service

Employee self-service or ESS has a major part to play in improving the engagement of employees. With the help of HCM systems, you can deploy dedicated ESS portals for your employees, empowering them to undertake their tasks from the comfort of their smart devices.


ESS portals also lower the HR workload since the employees can undertake various tasks such as applying for leaves, downloading payslips, uploading expense invoices, requesting Form-16, and more. In the absence of a dedicated unified HCM solution, HR would have to fulfill these requests manually, which is both strenuous and time-consuming.

➔ Performance & Appraisals

HCM systems can also analyze employee performance and provide in-depth analysis into various aspects related to it. It can also be used to set goals, provide continuous feedback, and more. As a result, the performance evaluations become more transparent, improving the employee’s trust in their company.


HCM systems also provide a good idea about the job market, helping the HR teams to understand the current industry-standard salary for an individual in a specific designation. It helps them provide well-calculated appraisals, which can satisfy the employee as well as fit within the budget constraints. Such a transparent performance and appraisal process will transform organizational productivity and help develop a performance-driven culture.

➔ Recruitment & Onboarding

Since company productivity begins with hiring the right employees, recruitment, and onboarding plays a critical role in a company’s success. Hence, HCM systems provide enhanced options for sourcing the right talent and keeping them warm and engaged. HCM systems even provide effective email templates to ensure that the candidates remain interested in the company through their interview and onboarding process.


Additionally, HCM systems also increase interactivity during the onboarding and hiring process, making it more engaging for the candidate. You can provide systematic onboarding with the help of HCM systems, enhancing your brand as an employer.

➔ Training & Development

HCM systems also provide training and development modules that enable the staff to upskill themselves. The training and development can be targeted as per the employee’s personal skillset, as it will ensure that the employee also undertakes their training with interest.


HCM systems can also provide the training materials required for effective training of the staff members. As a result, the system can be used by employees at their convenience from the comfort of their smartphones and laptops. With video, audio, quizzes, and interactive sessions, employee training will be more effective with the help of HCM systems.

➔ Data Protection

An additional feature of HCM systems is that it protects the security and integrity of the employee and company data. Since employee records are the foundation for any HCM technology, it comes with data protection features that ensure that it can be accessed only by personnel with the right access as well as ensure that it stays encrypted and secure in the database.


Most HCM systems provide enhanced data security by ensuring user access control, which is a mechanism that effectively abstracts the data to maintain integrity. For example, a manager in the company would be able to see the leave details of all of their team members, while an employee will be able to access their leave records only.

➔ Integrations

Another major feature of modern workday HCM and systems is the ability to integrate with other software and systems used in modern organizations. Since a company consists of multiple departments, they would be using different software to undertake their daily tasks. In this scenario, it is essential to have enhanced integrations with other systems to provide HR and management with a streamlined user experience.


Having such a streamlined approach will also improve the efficiency of the HR team, while also helping them undertake their tasks smoothly. Additionally, integrations ensure that cross-departmental processes are completed quickly with limited to no interaction from the users, further enhancing the overall efficiency of the company.

How to choose a Human Capital Management System?

Choosing the right Human Capital Management software is an overwhelming task. Hence, let us break down the process for you:


1. Develop a ‘Software Requirement List’ after discussing the details with the head of individual departments. Simultaneously, develop a list of the significant challenges to ensure that the requirements can resolve the same.


2. Develop a ‘Plan of Action’ for establishing the project scope, allocating budgets and resources, and a timeline for the project.


3. Identify the ‘Major Stakeholders’ of the project and develop methods to keep them in the loop regarding its progress.


4. Identify the other systems interacting with the HCM software and find ways to integrate them with the developing solution.


5. Deploy the human capital management software and refine it based on employee feedback. The feedback should help you refine it for better agility and enhanced usability.

11 Best HCM Software Solutions in India

Following are eleven of the best HCM software tools in India currently. We’ve also put together a thorough list of the best payroll software in India. The list includes information about the features and prices of each software. You can explore the article to find out more.

Pocket HRMS Logo

Pocket HRMS is an all-inclusive HRMS solution that enables companies to streamline their HR and employee management tasks with the help of artificial intelligence and machine learning. It enables enhanced employee engagement through an interactive AI-based chatbot and user-friendly mobile app with facial recognition-based attendance marking.

▸Key Features:

  • Payroll Software
  • ESS Portal
  • Time Tracking System
  • Leave Management System
  • Full & Final Settlement
  • Performance Management System
  • Recruitment Management System
  • Employee Management System
  • Shift Management Software
  • Employee Offboarding Software
  • SmHRty HR Chatbot
  • Expense Management System


  • Starts at ₹2495/month for 50 employees.


Keka is an all-inclusive complete HR solution and software that integrates several features which enable the HR team to streamline their daily tasks. Being a cloud-based system, it comes with multiple modules which can be customized as per your preferences. Keka is the Telugu word for ‘awesome’, and the name is meant to evoke emotion among its users.

▸Key Features:

  • Time Tracking
  • Payroll & Expenses
  • Employee Self Service
  • 360 Reviews
  • OKR & Goal Tracking


  • Starts at ₹6999/month for 100 employees and ₹60 per additional employee per month.
GreytHR Logo


GreytHR is another major software in the HR systems marketplace in India. Like the software mentioned earlier, GreytHR is also one of the most-preferred HRMS systems in the country for small and mid-size businesses. It is also based on the cloud architecture and hence, is modular in nature.

▸Key Features:

  • Payroll
  • Time Tracking and Management
  • Employee Self Onboarding
  • Employee Portal
  • Attendance Management


  • Starts at ₹2495/month for 50 employees.
HR one logo


HROne aims to provide the best user experience for its clientele with an enhanced user interface and advanced modules. Their HR software enables automation by simplifying clerical HR tasks and providing streamlined workforce management. It consists of various integrated modules, that enable the HR team to actively monitor employee management and take action as required.

▸Key Features:

  • Payroll Software
  • Performance Management
  • Attendance Management
  • Expense Management
  • Recruitment Management
  • Asset Management


  • Not Disclosed
Darwinbox Logo


Darwinbox aims to improve organizational transparency by providing streamlined access to employee and company data for the HR team. They have a dedicated chatbot, aptly named ‘Darwin’ to keep employees engaged. Additionally, they also provide a dedicated ESS portal and user-friendly mobile apps for both iOS and Android platforms.

▸Key Features:

  • Core HR software
  • Attendance and Leave Management
  • Performance Management
  • Talent Acquisition
  • Integration and Customization
  • Payroll and Benefits Management
  • Learning and Development
  • Analytics and Insights


  • The pricing is available on request. Anyone can get pricing by sending a quote today.
Zoho people Logo

Zoho People

Zoho People is a popular HRMS in India with enhanced data migration and various integration options for improved user experience. It provides a robust platform for enabling HR to undertake their tasks efficiently. It also automates the salary disbursal process by undertaking payroll management efficiently with the help of automated compliance handling.

▸Key Features:

  • Employee Onboarding
  • Employee Database Management
  • HR Files Management
  • Performance Management
  • Employee Self-Service
  • Time Off Management


  • Starts at ₹48/month/user
zimyo logo


Zimyo is another popular HR software option in India which provides a comprehensive set of modules which help the HR teams to automate the various processes in the entire employee lifecycle, from recruitment to retirement. They have provided added features for improved employee engagement, increasing their popularity among their user base.

▸Key Features:

  • Payroll
  • Onboarding
  • Assets Management
  • Geo Tracking and Fencing
  • Expense Management


  • Not Disclosed
Kredily Logo


Kredily is a payroll and attendance management system for the HR teams, which can also transform into a complete, human resource management platform, based on your company requirements. From attendance to payroll, Kredily aims to streamline the various HR tasks and ensure simplified processing for making it easier for the HR teams to accomplish their administrative tasks.

▸Key Features:

  • Employee Database
  • Payroll Processing
  • Attendance Management
  • Leave Management
  • Compliance
  • Reports and Analytics


  • For Professional, this plan is Rs. 4999 per month for 100 employees. Kredily also adds an additional charge of Rs. 40 in case any new employee is added. For Enterprise it is not disclosed
Akrivia HCM Logo

Akrivia HCM

Akrivia HCM is a comprehensive HCM solution that provides several modules for hire-to-retire employee management. Being a cloud-based solution, it is quite easy to add or remove modules as per your requirement. As a result, you get maximum ROI for your investment, while ensuring enhanced employee performance and engagement. With its comprehensive list of user-friendly modules, Akrivia HCM provides complete peace of mind for the HR teams.

▸Key Features:

  • Employee Management
  • Leave Management
  • Time & Attendance
  • Payroll Management
  • Recruitment Management
  • Off Boarding


  • Not Disclosed
Razorpay Logo


Razorpay differentiates itself from the various HCM software solutions systems by having advanced payroll management features, which also automate statutory compliance handling. The HCM tools from Razorpay will also include filings of forms such as TDS, PF, ESI, PT, etc. ensuring a smooth payroll process.

▸Key Features:

  • Employee Onboarding
  • Employee Self-Service Management
  • HR & Payroll
  • Payroll Management
  • Statutory Compliances
  • Time & Attendance Management
  • Leave Management


  • Starts at ₹100/month per user
HR mantra logo


HRMantra is another popular cloud HCM suites option for HRs which provides a complete cloud HCM platform for companies to manage their employees effectively. They provide numerous features such as management of recruitment, attendance, leaves, payroll, performance, and learning, to ensure an engaging experience for the staff.

▸Key Features:

  • Attendance Management
  • Time Management
  • Leave Management
  • Payroll
  • Performance Management
  • Learning Management


  • Not Disclosed
35 Best HR Software in India 2023

Human Capital Management (HCM) Challenges

Manual human capital management has significant challenges, which include the following:


➔ Efficient Administration


Administrative tasks such as business strategy planning become ineffective with the lack of the right tools. Additionally, it requires coordination among various departments, which is impossible with manual methods.


➔ Data Privacy


Data security and integrity become a concern with manual database management. There are multiple chances of data manipulation and errors with manual updates.


➔ Compliance Automation


Staying current with the numerous employment and business-related regulations is challenging with manual human capital management. Non-compliance can also lead to hefty penalties, which should be avoided.


➔ Employee User Experience


With manual employee record entries, it becomes cumbersome for the employee to manually submit the data with their HR team and verify the authenticity, making for a terrible employee experience.


➔ Big Data


Analyzing larger quantities of employee data is next to impossible with manual data ledgers. Maintaining it proves to be an incredibly arduous process.


➔ Recruitment


Manual acquisition methods have become outdated since everyone uses modern digital strategies and the internet to attain maximum reach and find the best candidates.


➔ System-wide Integration


Integration with other HR systems makes human capital management software efficient. With manual human capital management, there is no option for integration, making the processes tedious for the HR departments.

How can Pocket HRMS help?

Pocket HRMS is a modular cloud-based HCM software offering an extensive number of modules to undertake numerous HR processes. To ensure maximum profitability, it even offers you the ability to easily choose the relevant modules and customize them as per your company requirements while deploying Pocket HRMS. Being a part of cloud HCM suites and an AI-enabled solution, Pocket HRMS is the ideal option for any small to mid-range company.

Pocket HRMS comes with a host of new features such as machine learning-based employee payroll processing with automated compliance handling, virtually instant data search algorithm, biometrics and geolocation-based attendance management, completely flexible leave management, enhanced integrations with other common HR software, and more, which ensures streamlined HR processes. It also includes next-gen data analytics and reporting system to provide enhanced insights into the employee and company data.

Pocket HRMS also includes multiple options for improving the employee engagement rate in your organization since it includes an interactive AI-based chatbot – smHRty, a customizable employee self-service portal, an interactive dashboard, facial recognition-based attendance, as well as a dedicated mobile app.


HCM companies are organizations that provide the best HCM software services through modern technologies such as artificial intelligence and machine learning. HCM companies develop dedicated cloud-based HCM software and systems which can be used to effectively manage the employees in the organization and ensure streamlined processes.


The best HCM software systems also provide enhanced data security and integrity, by abstracting the database and the inner working of the system from the end-user, improving the overall effectiveness and simplicity of the software.

There are several advantages to choosing cloud-based HCM applications, such as:


  • Cost-efficient Processing

  • Improved Data Security

  • Easy Accessibility

  • Enhanced Collaboration

  • Automatic Software Updates

  • Self Service

  • Increased Mobility

  • Flexible Processes

  • Advanced-Data Insights

  • Increased Scalability

The main objective of human capital management software is to provide the company with strategic business growth opportunities by empowering employees and connecting people with daily operations and workflows. HCM software supports workforce optimization and related HR efforts.

Since the employees are the most valuable asset, there are several steps involved in developing work-life solutions for an organization, such as:


1. Hiring the best talent who are great team workers and have an excellent aptitude

2. Monitoring employee lifecycle and providing performance reviews periodically

3. Providing regular training and upskilling session.

4. Engaging the staff with innovative rewards, distinct work culture and competitive salaries to avoid workforce attrition.

In one word, the simple answer is ‘No’. While the terms HCM and HR are used interchangeably, they differ in the fundamental approach towards managing the employees in an organization. Human Resources or HR is mainly concerned with establishing tasks and processes that enable the HR team to handle the employees effectively. It includes processes such as recruitment, attendance and leave management, employee management, exit management, and more.


On the other hand, Human Capital Management or HCM is concerned with gaining maximum returns on investing in the staff by ensuring optimized processes and enhanced engagement to ensure long-term employee retention. It also includes several processes that ensure streamlined HR processes to optimize the efficacy of the company and the business processes.

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