HR and payroll systems integration: Solo in silo or together in tandem HR and payroll systems integration: Solo in silo or together in tandem

HR and payroll systems integration: Solo in silo or together in tandem
31 Mar 2015

The payroll department sits at the heart of a smooth-running business, steadily and reliably fuelling every aspect of a company’s operations - the underlying linchpin across an entire organisation. However, there are specific departments with which the payroll team work more closely than others, and the HR department is one of these.

At a time when any and every organisation has efficiency front of mind, the idea of integration between these two teams is becoming more and more popular. As a result, around half of mid-market companies are currently looking for an integrated solution.

This perhaps isn’t a surprise, as a system which integrates the HR and payroll departments provides the best return on investment for those organisations which look after both functions themselves, rather than outsourcing. The crucial factor is of course that it helps to avoid unnecessary duplication of effort, but the benefits don’t end there. Though there may be clear benefits, are there any pitfalls that companies should be aware of?

Better together

The most straightforward - and arguably the most compelling - benefit is quite simply that integrating HR and payroll systems reduces unnecessary duplication. With a ‘siloed’ approach, the same data is often entered into each department’s own system.

By implementing an integrated solution for the two teams and ensuring effective collaboration between them, organisations can reduce workload and free up employees’ time for other activities. This in turn reduces costs for the business overall.

But there are further benefits to single data entry. Thinking again of the business as a whole, entering data once also helps to limit business risk from manual data entry errors. This improved accuracy means better business decision-making, which relies on uniform, consistent information.

Holding both HR and payroll data within an integrated solution also allows for easier crossfunction business intelligence. At a time when volumes of data are surging, the ability to swiftly make better-informed business decisions cannot be overstated and these decisions rely on clear,up-to-date, easily-accessible data. Integrating data within one solution is an ideal step towards this.

In fact, better flow of management information is the second most commonly cited benefit of an effectively managed, integrated solution. One system providing data for multiple departments means that management decisions can be made as soon as the data has been entered once, rather than waiting for disparate systems to be updated. This translates into better resource and activity planning across all departments. Efficiency and speed, the watchwords of successful business. 

Making it happen

As with any area of business, collaboration is the key to unlocking the benefits of an integrated solution. Though the advantages may be clear to overall business leaders and heads of department, it’s these figures who must ensure that a collaborative approach exists throughout their teams. Business functions have to come together into one project team to achieve a single goal.

In fact, the most common barrier to success is when one department wants integration but the other doesn’t. It’s crucial that both the HR and payroll functions are on board before integration can happen.

Once this has been agreed, there’s one more obstacle on the path to integration - ownership. A successfully integrated HR and payroll solution needs to be used and driven by a group that has clear understanding of roles and responsibilities, such as who owns the entry and management of particular data sets. We therefore come full circle, as this is based on close collaboration and trust between the HR and payroll teams. 

The starting point for this collaboration is clarity from the outset. Both the HR and payroll teams need to be clear about their short and long term objectives for the integration before making any decisions on which system to go with. This allows any potential sticking points to be identified at the very beginning, but also ensures that the right integrated solution is chosen to serve both combined and individual team needs.

If the payroll team is leading the integration, they must then ensure the HR team is getting everything they need from the solution once it’s been deployed. Collaboration must not just be in the preparation, or initial on-boarding, but continuously, from the moment discussion of an integrated system begins.

Returning briefly to the issue of keeping costs down, the simplicity of using one system can also help to minimise training costs and boost expertise. Rather than paying to train the HR and payroll teams on different, disparate systems, organisations can train them together to use an integrated tool. Familiarity with one core system means a higher level of expertise within the organisation as a whole, and a larger pool of talent to draw on should issues or questions arise.

Strategic gain

Given the benefits to the company overall, there’s an additional strategic advantage for the head of payroll. Suggesting and leading on the integration and collaboration of two different teams clearly positions them as a strategic, business-focused leader.

The payroll department can sometimes be overlooked when it comes to wider business strategy, but a team player who drives on-the-ground efficiencies is hard to ignore.

If efficiency and speed really are the watchwords of successful business, then collaboration and strategy are the watchwords of successful management. Fortunately for the head of the payroll department, integrating HR and payroll systems boosts speed and efficiency, which in turn showcases a collaborative, strategic leader. It’s ‘win win’.

By Jonathan White, head of sales, Sage HR and Payroll

The payroll department sits at the heart of a smooth-running business, steadily and reliably fuelling every aspect of a company’s operations - the underlying linchpin across an entire organisation. However, there are specific departments with which the payroll team work more closely than others, and the HR department is one of these.

At a time when any and every organisation has efficiency front of mind, the idea of integration between these two teams is becoming more and more popular. As a result, around half of mid-market companies are currently looking for an integrated solution.

This perhaps isn’t a surprise, as a system which integrates the HR and payroll departments provides the best return on investment for those organisations which look after both functions themselves, rather than outsourcing. The crucial factor is of course that it helps to avoid unnecessary duplication of effort, but the benefits don’t end there. Though there may be clear benefits, are there any pitfalls that companies should be aware of?

Better together

The most straightforward - and arguably the most compelling - benefit is quite simply that integrating HR and payroll systems reduces unnecessary duplication. With a ‘siloed’ approach, the same data is often entered into each department’s own system.

By implementing an integrated solution for the two teams and ensuring effective collaboration between them, organisations can reduce workload and free up employees’ time for other activities. This in turn reduces costs for the business overall.

But there are further benefits to single data entry. Thinking again of the business as a whole, entering data once also helps to limit business risk from manual data entry errors. This improved accuracy means better business decision-making, which relies on uniform, consistent information.

Holding both HR and payroll data within an integrated solution also allows for easier crossfunction business intelligence. At a time when volumes of data are surging, the ability to swiftly make better-informed business decisions cannot be overstated and these decisions rely on clear,up-to-date, easily-accessible data. Integrating data within one solution is an ideal step towards this.

In fact, better flow of management information is the second most commonly cited benefit of an effectively managed, integrated solution. One system providing data for multiple departments means that management decisions can be made as soon as the data has been entered once, rather than waiting for disparate systems to be updated. This translates into better resource and activity planning across all departments. Efficiency and speed, the watchwords of successful business. 

Making it happen

As with any area of business, collaboration is the key to unlocking the benefits of an integrated solution. Though the advantages may be clear to overall business leaders and heads of department, it’s these figures who must ensure that a collaborative approach exists throughout their teams. Business functions have to come together into one project team to achieve a single goal.

In fact, the most common barrier to success is when one department wants integration but the other doesn’t. It’s crucial that both the HR and payroll functions are on board before integration can happen.

Once this has been agreed, there’s one more obstacle on the path to integration - ownership. A successfully integrated HR and payroll solution needs to be used and driven by a group that has clear understanding of roles and responsibilities, such as who owns the entry and management of particular data sets. We therefore come full circle, as this is based on close collaboration and trust between the HR and payroll teams. 

The starting point for this collaboration is clarity from the outset. Both the HR and payroll teams need to be clear about their short and long term objectives for the integration before making any decisions on which system to go with. This allows any potential sticking points to be identified at the very beginning, but also ensures that the right integrated solution is chosen to serve both combined and individual team needs.

If the payroll team is leading the integration, they must then ensure the HR team is getting everything they need from the solution once it’s been deployed. Collaboration must not just be in the preparation, or initial on-boarding, but continuously, from the moment discussion of an integrated system begins.

Returning briefly to the issue of keeping costs down, the simplicity of using one system can also help to minimise training costs and boost expertise. Rather than paying to train the HR and payroll teams on different, disparate systems, organisations can train them together to use an integrated tool. Familiarity with one core system means a higher level of expertise within the organisation as a whole, and a larger pool of talent to draw on should issues or questions arise.

Strategic gain

Given the benefits to the company overall, there’s an additional strategic advantage for the head of payroll. Suggesting and leading on the integration and collaboration of two different teams clearly positions them as a strategic, business-focused leader.

The payroll department can sometimes be overlooked when it comes to wider business strategy, but a team player who drives on-the-ground efficiencies is hard to ignore.

If efficiency and speed really are the watchwords of successful business, then collaboration and strategy are the watchwords of successful management. Fortunately for the head of the payroll department, integrating HR and payroll systems boosts speed and efficiency, which in turn showcases a collaborative, strategic leader. It’s ‘win win’.

By Jonathan White, head of sales, Sage HR and Payroll