HRIS vs HCM vs payroll vs PEO
Functional differences
| Category | What it does | Pricing model | Typical anchor |
|---|---|---|---|
| HRIS | System of record for people data (directory, time-off, documents, org chart) | PEPM | BambooHR, HiBob, Namely |
| HCM | HRIS + Talent (Recruiting, Performance, Learning) + Workforce Management (time, scheduling) | PEPM, often modular | Workday, UKG Pro, Paycom, ADP WFN |
| Payroll | Wage calculation, tax withholding, payment, year-end forms (W-2, 1099) | Base + per-employee + per-payroll-run | Gusto, Paychex Flex, ADP Run |
| PEO | Co-employment: vendor is legal employer; bundles benefits master plan, payroll, HR services | PEPM admin fee + pass-through benefits cost | Justworks, Insperity, TriNet |
When PEO beats standalone HRIS on total cost
The benefits-arbitrage case. A PEO's master health plan typically lands 5-15% under directly-brokered SMB plans because the PEO pools risk across all member companies. For a 50-person company in a tough rating area (urban California, Northeast US), the PEO arbitrage can offset the higher headline admin fee and still net out cheaper. Below 20 employees the arbitrage is usually too small to overcome the admin fee.
Vendors that straddle categories
- Rippling: HRIS + Payroll + Talent + IT in one platform. Functionally an HCM-plus.
- Gusto: payroll-first that has grown into HRIS. Functionally an HRIS for sub-100 employee buyers.
- BambooHR: HRIS-first that added payroll. Functionally a light HCM at the Pro tier.
- TriNet: sells both PEO (co-employment) and HR Platform (software-only). Same buyer often considers both.
- Justworks: PEO with a software UX that feels like an HRIS.
What does a 75-250 person Series B SaaS need?
Almost always an HRIS + Payroll bundle (Rippling, BambooHR + payroll, Gusto Plus / Premium). PEO arbitrage rarely pencils for venture-backed SaaS that runs in healthcare-cheap geographies (Austin, Denver) and uses a tech-friendly broker like Sequoia or Newfront. HCM (Workday, UKG) is overkill below 500 employees. Standalone payroll without HRIS is usually a transition phase, not an end state.