Why integrate your HR and Payroll systems?

Typically, all companies have different systems to manage their HR and Payroll. However, despite HR management and payroll being critically connected, traditionally, these systems remain separate within an organisation. To be effective in all respects, organisations require a solution that combines the best of HR functionality with specialist payroll management.

According to Moorepay's 2022 Payroll report, the use of separate Payroll and HR systems has increased since 2019. Businesses connecting their payroll & HR software via APIs also dropped in 2022 by 8% YOY. This can be explained by the apparent different and sometimes conflicting needs of the various roles within a business, e.g., what payroll requires versus HR. Sometimes choosing separate systems just seems more straightforward in the short term!

An integrated HRIS enables these disparate systems to 'speak to one another' and provides HR and payroll teams access to the same information (a single source of truth).

Integrating current HR systems can significantly benefit a company by improving its overall operations and performance. Moreover, with the recently identified trend for 2023 of companies looking to optimise the systems they already have before investing further in new systems, system integration will play a key role.

Furthermore, if you are considering adopting a new cloud-based payroll system or reviewing your current system, it is worthwhile to find out more about that solution's integration capabilities.

The ability to integrate your HRIS and payroll systems becomes even more valuable for multinational organisations with further expansion plans as it enables you to get processes in place from the beginning that will support your future business growth strategies.

The challenges of having separate systems

Issues related to having different systems to manage each of these critical business functions are vast and include:

1. Inaccurate or incomplete employee information: HR and payroll systems rely on the same employee data. If the information in the two systems isn't kept up to date and consistent, it can lead to errors and discrepancies in payroll calculations and tax reporting.
2. Inefficient processes: Using two separate systems can create additional steps and duplication of effort, such as entering employee information twice or manually reconciling differences between the systems. This can be time consuming and lead to an increased workload for HR and payroll staff and avoidable errors.
3. Increased risk of errors and compliance issues: With two systems to maintain, there is a greater risk of mistakes or oversights that can result in incorrect employee payments or violations of employment laws and tax regulations. Not to mention the negative effect these mistakes have on employees.
4. Difficulty tracking and reporting on HR and payroll data: Separate HR and payroll systems can make it challenging to get a comprehensive view of employee data and generate reports that incorporate information from both systems. This can make it difficult to make informed decisions and identify trends or patterns in HR and payroll data.
5. Higher cost and complexity: Implementing and maintaining two separate systems can be more expensive and complex than using integrated systems.

So why integrate?

Integrating your HRIS and payroll systems will address the issues mentioned above and provide numerous other benefits, which include:

Reduction in manual effort

Streamline your processes and reduce the time and effort required to manage your people and payroll. Additionally, time spent keying information from one system to another can be reduced or removed altogether, enabling your HR and payroll teams to focus on the more strategic aspects of their roles. In short, integrating systems ensures that the right information is in the right system at the right time.

Improved accuracy and reliability

Employee information is consistent across both systems, reducing the risk of errors and inaccuracies and giving you the confidence that the payroll information is accurate and up to date. This can also make it easier for HR and payroll staff to access and update employee information, increasing efficiency and reducing the time and effort required to process payroll.

Enhanced data security and improved compliance

Data security and accuracy is improved, as sensitive employee information can be uploaded and maintained in one system, rather than having to rekey or share data via email or download it to spreadsheets for re-upload. As a result, companies can also better protect sensitive employee information from unauthorised access or breaches and provide peace of mind for both the business and its employees.

According to the UK Government's 2022 cyber security breaches survey, in the past 12 months, 61% of medium to large businesses experienced a cyber security breach. Of these, 32% experienced attacks at least once a week. This further supports the need for the use of secure methods of data transfer, particularly given the sensitive nature of valuable employee data.

You can also ensure compliance with relevant laws and regulations regarding payroll and employee benefits, preventing the business from facing costly penalties or legal issues.

Data management and reporting accuracy

With data seamlessly flowing from one system to another, you can be confident in your reporting and analytics accuracy, providing a powerful tool upon which to base business decisions that can positively impact business goals. It also eradicates the time consuming and sometimes arduous task of gathering data from various systems, cross-referencing and consolidating it.

Better decision making

By providing HR and payroll staff access to a single, integrated system, companies can make it easier to analyse and interpret employee data, facilitating informed decision-making about staffing levels, compensation, and benefits.

Improved employee experience

For employees, being paid correctly is the first step towards employee satisfaction and will ultimately assist with employee engagement. If employees know they will be paid correctly, they build trust in that important process and can focus their time on the tasks at hand.

Furthermore, by providing employees with a single platform for managing their personal and payroll information, companies can make it easier for them to access and update their own information, simultaneously improving the employee experience. This is especially useful for companies with employees working in multiple locations, as it allows them to manage all their employee information in one place. Additionally, HR and Payroll are not dealing with queries from employees surrounding their pay and benefits, enabling them to focus on other aspects of their role.

Increased cost savings

By streamlining HR and payroll processes and reducing the risk of errors and inaccuracies, companies can save time and money, which can help to reduce administrative costs and free up HR and payroll staff to focus on more value-added tasks.

So, what's not to like?

Therefore, by integrating your HRIS and payroll systems, you can manage employee information more efficiently, save time and money, improve security and compliance, enhance employee satisfaction and engagement, and make informed, timely business decisions!

Additionally, integrating your systems sets you up for success from the offset and provides a solid foundation for process improvement, which can scale as your business grows.

Want to find out more?

If you would like to learn more about payroll solutions,  integrating your payroll solution or other systems with your HRIS or simply to discuss your potential requirements, then please reach out on tel +44(0)1908 030360 or email: info@tugelapeople.com. Alternatively, complete the ‘Get in touch’ form, and a member of our team will be in contact with you.