HR Software Glossary
Plain-English definitions for every term you'll encounter when evaluating HR software. 5 terms and counting.
Core HR Systems
Human Capital Management (HCM) is the full talent-lifecycle suite: HRIS + payroll + recruiting + performance management + learning + workforce planning. The term is mostly used by enterprise vendors (Workday, Oracle) to signal breadth beyond core HRIS.
A Human Resources Information System (HRIS) is the system-of-record for employee data — storing contracts, salary, benefits, time-off balances, and org structure. It is the spreadsheet you replace when you grow beyond 10–15 people.
Pricing & Commercial
PEPM (Per Employee Per Month) is the dominant HR software pricing model — you pay a fixed amount for each employee on your headcount every month. It sounds simple but compounds in three non-obvious ways: headcount growth, module additions, and year-2 renewal increases.
Renewal price shock is the 15–30% year-2 price increase that many HR software vendors impose at contract renewal. It is the largest hidden cost in the category and the primary reason mid-market companies switch platforms at the 18-month mark.