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The significance of Human Capital Management (HCM) systems in today’s era of digital transformation cannot be overstated. Organisations that do not employ a type of HCM system in the UK, where competition is fierce, are limiting their ability to thrive and stand to lose out on operational efficiency.

Properly implemented HCM systems can increase employee engagement and enable better talent management. In this article, we will review the 10 best HCM systems in the UK in 2023, hopefully helping you make an informed decision about which platform is the best fit for your organization.

So let us go on an adventure to discover the history and capabilities of human capital management systems and the reasons why companies can not ignore their significance.

What Is Human Capital Management Software?

Human Capital Management (HCM) software is a collection of methods and tools for handling HR processes and the employee lifecycle as a whole. An effective HCM system seamlessly combines various functions, from recruitment – the cornerstone of any thriving organisation – to nurturing, developing, and retaining top talent. 

In addition to facilitating the hiring process, it also enables the timely payment of wages, the monitoring of employees’ attendance, and their professional growth.

HCM vs. HRIS: Unravelling the Distinctions

Human resource technology is a broad and complex field, with its own unique jargon. Is HCM the same as HRIS? is by far the most frequently asked question.

While at a glance, HCM systems and Human Resource Information Systems (HRIS) seem the same, they diverge in scope, features, and primary intentions.

HCM (Human Capital Management)

  • Definition: Prioritises a strategic approach for managing the HR function, focusing on talent acquisition, management, and overall employee engagement.
  • Features: Beyond core HR functionalities, HCM includes talent acquisition and onboarding, talent management, performance management, and advanced workforce analytics.
  • Objective: To improve employee performance in alignment with an organisation’s goals.

HRIS (Human Resource Information System)

  • Definition: Emphasis on core HR business processes. Essentially, HRIS is a tool for the efficient management and tracking of a company’s HR operations.
  • Features: Data entry and retrieval, attendance monitoring, payroll and benefits management, and rudimentary report generation are all central features of HRIS.
  • Objective: Streamlining HR administrative tasks and efficiently managing employee information.

While HRIS is primarily concerned with operational efficiency and employee data management, HCM is a more comprehensive solution focused on increasing employee value. For a thorough understanding and guidance on choosing the right system for your needs, delve into our exclusive article on HCM vs. HRIS.

Cloud-Based HR System Outlook

According to Gartner forecasts, by 2023, 60% of large businesses will have invested in automating the administration of worker-related HCM tasks in an effort to improve managers’ and the employee experience. 

Furthermore, by 2025, 60% of global midmarket and large entities will invest in cloud-hosted HCM suites for administrative HR and talent management. Notably, these enterprises will still source 20% to 30% of their HCM needs through other solutions.

The Rise of Cloud-Based HR Systems in the UK

A company’s ability to attract, retain, develop, and engage its employees, as well as its overall management of its workforce, can be profoundly impacted by adopting a cloud-based human resources software suite. 

These suites offer a broad range of HCM capabilities, ranging from HR administrative functions, such as core HR, benefits, and payroll administration, to talent management applications, encompassing recruiting, onboarding, engagement management, and more.

Additionally, HCM suites prioritise reporting and data in accordance with local and international regulations, and many include analytics and role-based dashboard features. Advanced technologies, such as AI or NLP, further augment these reports and analytics. The availability of chatbots and virtual assistants has also improved HCM suites’ user interfaces.

One of the critical shifts in online HR software is the user experience (UX). As in-person conversations with HR teams begin to morph into digital interactions, the demand for intuitive and personalised UX grows. HCM suites now play a pivotal role in this digital transformation.

Why Use an HCM System?

Modern organisations cannot rely solely on antiquated on-premise tools. Cloud-based HR systems offer a number of benefits:

  • Streamlined HR Functions: Efficiently manage everything from recruitment to retirement.
  • Centralised Data: Transition from scattered systems to a consolidated view of all employee data.
  • Enhanced Employee Management: Bolster workforce productivity and morale.
  • Data-driven Decisions: Using comprehensive analytics, HR can align decisions with business goals.

Criteria for Selecting HCM Systems

Selecting the right HCM system for your organisation should go beyond a simple checklist of features. 

Consider:

  • Scalability: Does the system evolve with your organisation?
  • User Experience: Opt for intuitive systems.
  • Integration Capabilities: Ensure smooth interaction with existing systems.
  • Security: Data protection is paramount.
  • Implementation Process: A seamless transition is crucial.
  • Cost-effectiveness: Ascertain value for money.

And remember, during demos, remain focused on your needs, and, although important, don’t be distracted or swayed by the vendor’s latest innovations.

With the right HCM system in place, businesses can effectively navigate the complexities of HR management and lay the foundation for sustained growth and success.


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The Different Types of HCM Systems in the UK and Globally

The HR technology landscape is extensive and diverse, catering to the many needs of modern HR departments. When selecting HR systems, geography plays an important part in determining which systems are likely to be a fit for your organisation. 

E.g., the needs of an organisation operating solely in the UK will differ in contrast to those of a multinational operating across several countries.  Each system provider will place more emphasis on one or more broader areas of a specific HR capability, ranging from talent acquisition to payroll processing. 

Let us take a bird’s-eye view of the various domains that these systems support:

Talent Management Systems (TMS):

  • Focus: Primarily centres on attracting, acquiring, developing, and retaining talent.
  • Features: Recruiting, onboarding, performance management, learning and development, succession planning, and talent analytics.
  • Benefit: A holistic view of the entire employee life cycle, ensuring that the right people are hired, nurtured, and retained for the right roles.

Workforce Management (WFM):

  • Focus: Managing and optimising the daily performance and productivity of employees.
  • Features: Time and attendance, scheduling, absence management, and labour forecasting.
  • Benefit: It helps businesses to ensure that they always have the right number of people working in the right places at the right times.

Payroll Systems:

  • Focus: Processing employee compensation accurately and on time.
  • Features: Pay and tax calculation, benefit deductions, wage garnishments, and direct deposit functionality.
  • Benefit: Ensures compliance with tax laws and regulations, providing employees with timely and correct payment, which can in turn boost morale and trust.

Core HR and Employee Management:

  • Focus: A system of record for centralising employee data and supporting basic HR administrative tasks.
  • Features: Personnel tracking, benefits administration, HR reporting, and regulatory compliance documentation.
  • Benefit: Provides a single source of truth for employee data, streamlining HR processes, and enabling informed decision-making.

While there’s some overlap among these systems, each has a primary function that addresses a unique facet of HR management. While an all-in-one approach to HR systems may be preferred, many modern HR departments often integrate best-in-class HR systems to create a cohesive HR tech stack that seamlessly manages the end-to-end employee journey. 

By understanding the differences and interconnections among these systems, organisations can better select and implement the right tools to meet their existing and future HR needs. Now, let us review the 10 best HCM systems in the UK for 2023.

The Top 10 HCM Systems in the UK for 2023

workday logo

Workday

  • Background: As a major player in the global HCM arena, Workday ensures its offerings are apt for the unique requirements of the UK market. With a history of consistent innovation, they’ve become a trusted partner for many enterprises.
  • Features: Comprehensive modules encompassing talent management, payroll, and attendance. The cloud-first approach ensures accessibility and real-time data management.
  • Pricing: Workday operates on a subscription model, with the cost tailored depending on enterprise size and requirements.
  • Feedback: Many large-scale and multinational organisations choose Workday for its robust features and reliability.
  • Capability Focus: Core HR, Talent, and Employee Management
  • Best for organisation (employee headcount) size: 1,000+
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Ceridian

  • Background: With decades of experience, Ceridian has emerged as a formidable HCM solution provider, particularly with its flagship product, Ceridian Dayforce HCM.
  • Features: Boasting a single, cloud-based application for human capital management, it offers features from talent management to payroll software and everything in between.
  • Pricing: Ceridian follows a modular pricing model, ensuring businesses only pay for what they require.
  • Feedback: Praised for its intuitive interface and powerful analytics, it’s a top choice for businesses that need a comprehensive HR solution.
  • Capability Focus: Core HR, Attendance Tracking, Workforce Management, and Payroll.
  • Best for organisation (employee headcount) size: 500+
mhr logo

MHR

  • Background: MHR has positioned itself as a frontrunner in the HCM space in the UK, with a strong emphasis on innovation and data-driven solutions.
  • Features: Alongside core HCM capabilities, MHR offers advanced analytics, performance management, and unique employee engagement tools.
  • Pricing: Costs are typically customised based on organisational needs and module selection.
  • Feedback: Highly recommended for its localised support and robust, scalable solutions.
  • Capability Focus: Core HR, UK Payroll
  • Best for organisation (employee headcount) size: 500+

 

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ciphr logo

CIPHR

  • Background: A leading UK-based provider, CIPHR focuses on delivering fully integrated HCM solutions.
  • Features: Distinct modules for recruitment, talent management, and payroll software. Its cloud-first architecture promises real-time insights and ease of access.
  • Pricing: CIPHR adopts a per-employee-per-month pricing structure, making it adaptable for businesses of various sizes.
  • Feedback: Users commend its seamless integrations and robust data handling capacities.
  • Capability Focus: Core HR, UK Payroll
  • Best for organisation (employee headcount) size: 500+,
cornerstone logo

Cornerstone

  • Background: Renowned globally, Cornerstone brings its rich legacy to cater to the HCM demands of the UK market.
  • Features: Their solution promises comprehensive talent management, advanced learning & development modules, and detailed reporting tools. 
  • Pricing: Operating on a subscription-based model, prices vary based on modules chosen and the size of the organisation.
  • Feedback: Appreciated for its continuous innovation and a wide array of features.
  • Capability Focus: Employee Management & Talent Management
  • Best for organisation (employee headcount) size: 1,000+
sage logo black

Sage

  • Background: A well-established player, Sage offers a blend of accounting and HCM solutions tailored for the UK.
  • Features: Beyond the typical HCM modules, Sage brings payroll software expertise, ensuring flawless financial integrations.
  • Pricing: Tailored pricing is a hallmark, with costs contingent on the specific needs of the business.
  • Feedback: Sage’s prowess in both HCM and accounting makes it an ideal choice for those seeking dual functionalities.
  • Capability Focus: Core HR and UK Payroll
  • Best for organisation (employee headcount) size: 200 – 1,000
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Personio

  • Background: Personio, a European gem, has been growing in stature in the UK for its holistic HCM solutions targeting SMEs.
  • Features: A well-rounded suite includes recruitment, employee management,document management and more. This cloud-based HR system is designed for simplicity.
  • Pricing: Subscription tiers are based on company size, ensuring cost-effectiveness for SMEs.
  • Feedback: Gaining traction for its ease of use and efficient customer support.
  • Capability Focus: Core HR and workflows
  • Best for organisation (employee headcount) size: 10 – 500
iris logo

Iris

  • Background: With a solid presence in the UK, Iris delivers HCM systems that seamlessly blend with its broader software offerings.
  • Features: Its robust suite includes payroll software, talent management, and attendance tracking. Integration capabilities are one of its standout features.
  • Pricing: Varies based on the modules chosen and organisational requirements.
  • Feedback: Iris is often chosen for its broader ecosystem of software solutions and local support.
  • Capability Focus: Core HR and UK Payroll
  • Best for organisation (employee headcount) size: 500–2,000
sap logo

SAP Success Factors

  • Background: Packed with a comprehensive HCM suite, as you’d expect from a global titan,
  • Features: Its robust suite includes payroll software, talent management, and attendance tracking. Extensive Integration capabilities are one of its standout features.
  • Pricing:Given its enterprise nature,SAP’s pricing is customised per project, with bundles available for the various HCM modules.
  • Feedback: SAP has a wide array of software solutions within HR and beyond. They offer global support, which ensures ease of implementation and continued use.
  • Capability Focus: Core HR, Talent Management, and Global Payroll
  • Best for organisation (employee headcount) size: 2,000 +
access people logo

Access Group People HR

  • Background: Access Group’s People HR software stands strong in the UK’s HCM market, smoothly integrating with its wider software ecosystem.
  • Features: Offering a comprehensive suite,including payroll software, talent management, attendance tracking.
  • Pricing: The cost is modular, allowing flexibility based on specific organisational needs and chosen features.
  • Feedback: Access Group has a broader suite of products, which can be an advantage for organisations looking for all-in one ERP-type solutions.
  • Capability Focus: Core HR, UK Payroll
  • Best for organisation (employee headcount) size: 500–2,000.

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HCM Integration with Other Business Systems

In the contemporary digital age, siloed systems and platforms are outdated. The real strength and competitive advantages are found when HCM systems seamlessly connect with core platforms – ERPs, CRMs, and specialised accounting tools. 

How well these systems work together is dependent on their level of integration, whether through APIs, sFTP, or webhooks. However, traditional point-to-point integrations can sometimes muddle this process.

Introducing iPAAS: Your Integration Solution

iPAAS, or Integration Platform as a Service, is a cloud-driven integration suite designed to simplify the orchestration, deployment, and management of integrated data workflows. 

Acting as a bridge, it ensures a seamless integration between on-premises and cloud-based processes, applications, services, and datasets.

With iPAAS, there’s no need to manage multiple integrations, which is a typical pain point when integrating HR into an existing ecosystem.

An iPAAS acts as a hub, centralising and easing the integration process. By removing data silos, an iPAAS manages the integration landscape end-to-end. This integrated strategy not only refines HR processes but also creates infinite possibilities for data flows throughout the organisation.

The Future of HCM Systems

Change is the only constant, and the HCM landscape isn’t immune to evolution. Over the next five years, we anticipate groundbreaking innovations, including generative AI-powered analytics and enhanced performance management tools. 

Furthermore, the rise of the Composable HR Applications Framework (CHAF) suggests a paradigm shift. CHAF is poised to be the potential successor to today’s cloud HCM suite, signalling a new era for human capital management. Still, even acknowledging the probable evolution within the field, HCM systems’ importance in the modern UK business environment cannot be overstated. 

Ensuring efficient and adaptable HR operations isn’t just a nice-to-have but a necessity, forming the foundation for long-term organisational success in a rapidly changing world.

Recommendations and Next Steps

Deciding on a new HCM system is a significant investment. Thus, further research is advisable. Dive deeper into HCM software, explore the debate on HCM vs. HRIS, or read our comprehensive HR Technology Health Check guide to kick-start your vendor selection process on the right footing. 

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Marcus Dasilva is the Managing Partner and Head of HR Technology at BaseLinked. He has worked as an HR technology expert for 25 years. Marcus leads the technology and automation practice, specializing in helping organizations digitally transform HR. His mission is to drive business value and efficiency through HR innovation in an ever-changing environment.
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