Is 2022 the year you integrate HR with payroll?

April 28, 2022 | 5 Mins Caitlyn Simons

Payroll and HR software will always need to be integrated, both systems contain data that is relevant to each other, and so bidirectional data flows will always be needed.

Digital integrations and platforms are needed for this to happen- the result will be smoother and more efficient payroll that facilitates execution excellence and operational efficiency.

2022 is the year that HR leaders should be looking at integrations with payroll. Companies are growing and hiring as we emerge from the pandemic, this means that more people will need to be paid, which is just more data and more complexity for payroll. HR integrations will make a huge difference to this process.

This article will address some of the reasons why integrating these two business critical systems and benefits administration teams and can only help companies become more efficient.

The data duplication problem

Many global payroll processes are still being done manually at multinational companies today- this process is slow, cumbersome, non-secure and unsustainable. Global payroll professionals are taking data out of HR systems and manually inputting them again into a separate payroll system. There must be another more efficient way to carry out this process and there is- to implement a human capital management integration.

When there is a HCM integration, then a bidirectional data flow would remove the need for either HR or global payroll professionals to manually transfer data from one system to another. Introducing automation technology could make this process easier. Automation could be introduced to make data flows seamless and rapid- this would also free up time for professionals in both departments to focus on higher value work and also eliminate the data duplication problem.

By integrating these two systems, then data flows would be quicker, smoother, and faster. This would help payroll delivery turnaround times and it would also make things a lot more secure because the likelihood of human error is reduced, as automated process and machine learning tech would be responsible for transferring this data, instead of a person. It is usually typical for HR teams to use spreadsheets and emails when moving data, even more so now with people working from home. This is risky & unsafe and important or sensitive data could easily end up in the wrong hands and result in a breach of GDPR legislation. Integrating HR and payroll via technology featuring data protection and cyber security tools would help to make this process significantly more secure.

Furthermore, if any relevant or important information comes up for an employee which needs to be entered into a HR system, such as a change to job title or salary, then the payroll aspect of this information is automatically entered in at the same time, due to the integration of the two systems. This takes away the need for any manual data entry or duplication for either department and makes the overall process much more efficient for the professionals in both teams.

The bigger picture insights benefit

Global payroll data has a lot to say when it is released via smart reporting and analytics tools. A digital integration between human resources and payroll would facilitate the easy extraction of important payroll and HR data for digestible and easily understood reporting that can be seen in real-time. HR leaders and global payroll managers would be very interested in this kind of reporting, as would the members of the wider leadership team.

The data that is presented in the reporting could indicate a lot about a company’s payroll costs, as well as allowing you to drill down into specific cost elements or relevant employee information- such as overtime costs, sales bonus figures and tax figures- even pointing to which country would be advantageous for recruiting new hires due to labor costs. Anything that would be able to make this data more readily available or easy to access, as well as having the ability to customize from a reporting angle, would be a major benefit when it comes to bigger picture insights and actionable decision making- which would be beneficial for a company’s performance management activities.

The single source of truth is also important, when you have data being entered into two different systems- HR and payroll, and then having that data duplicated across, things can quickly become complex as there is too much data flying around. The question then becomes, which system is the master for accurate data? If a human resources manager wants to get data on joiners and leavers, then which software system contains the most up-to-date and accurate data? At a lot of companies, they simply cannot say.

A HCM integration would remove the duplicate data issue and create a single source of truth on employee data from a HR perspective, as well as a single source of truth on the payroll data from the payroll side. This is really valuable data to have and be able to access quickly and easily- a HCM integration between payroll and HR systems makes this possible.

Payroll and HR aligned- it makes sense

These two business critical service delivery departments cannot operate in isolation from a data perspective, they are always going to be connected- so system integrations that can connect them in a faster, smarter, and better way, are a valuable investment for multinational companies when it comes to finding payroll and HR solutions.

The new ‘work from anywhere’ concept and new world order of remote working means that recruitment and payroll complexities are coming down the line. Now is the time to make a HR and payroll systems integration happen- it would be unwise to wait any longer and it is best to try and get ahead of the complexity that is coming, especially if there are major recruitment and scaling objectives in place at an organization.

Additionally, if your payroll and HR data are all available from a single system, then it would be possible to have a more efficient employee self-service portal- resulting in a more enhanced employee experience. Employees would have the ability to access their information about their payslips, holiday allowances, and so on- which is not only beneficial for employees, as they can now have the sense that they have a bit more control over their information.  They can also access, edit, and add personal information on their own, which helps free up HR professionals to deal with more pressing issues. This could contribute to a better rate of employee engagement and satisfaction, which could enhance the company’s retention goals.

It makes business sense for payroll and HR services to be aligned from a technology, data sharing and streamlined working process perspective. Recruitment, retention, and accurate payroll can only benefit from these departments being aligned and benefiting from digital technology stacks that connect them in cohesive ways.

A company’s management system can gain a lot of benefits by integrating their HR and payroll software, both departments would no longer need to concern themselves with data duplication and manual inputting, which would save time and allow for enhanced efficiency and workflows. It would also lead to HR and payroll leaders having access to valuable reporting and the chance to see bigger picture insights. 2022 should really be the year you get around to integrating these two systems.

 

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