Author: Simon Bradbury, Global Payroll Consultant and CEO at Global HRIS
Last updated: 26/06/2023
If you’re in the market for a new HR or payroll system, there are many options to consider. All software should offer you the same basic functions, so your pay is correct. However, each option has a set of benefits. For example, greater efficiency and improved reporting. So, it’s best to find a system that fits your unique business needs.
Businesses have previously kept software separate through stand-alone systems. However, payroll and HR responsibilities have grown significantly. Both teams now play a more strategic role in the business. For some companies, combining both systems is a logical step forward.
Every business is different and changing your software isn’t a quick process. With so many options available, we’re here to help. Here we’ve shared the pros and cons of both an integrated system and stand-alone software.
An integrated system simply means all your data is in one place. It is a shared database that pulls in all employee data from the same source. It allows your HR and payroll team to access the exact same database. You will need an interface to access the same data via a stand-alone system. An interface allows two unique products to share data. You will have to manually transfer all relevant HRIS data to your payroll, or vice versa. This means there is an added level of risk with a stand-alone system.
Another benefit is the reduced risk of data duplication. An integrated system will keep you compliant with any new regulations. Your team should be more efficient, too. All data about an employee is more accessible, including their pay, title, and conditions. Finally, a combined system may lower your overhead costs.
An integrated HR and payroll system should keep your data secure. These systems will be cloud-based, so all your data is stored securely online. Both teams will be able to carry out safe payroll transactions and data maintenance. Combining both datasets will also improve your reporting. Analysing data can be a huge task if your employees are using two separate systems. Instead, your reporting should become clearer when datasets are combined.
It also provides a consistent user experience for employees. They will only be required to access one dataset, which simplifies this process. However, systems like Workday and SuccessFactors now have their own application stores, where you’re able to access other system providers information directly from your HRIS.
Dealing with several stand-alone systems can be time-consuming. Also, an integrated system could boost your team’s productivity. Depending on the provider, a combined system may be cheaper, too. Ask any potential providers for a breakdown of costs. This should help to avoid any hidden expenses.
Stand-alone HR and payroll systems have traditionally been the preferred choice. You may also have an existing system in place. For instance, Workday, Oracle, or SuccessFactors. In some cases, it may be easier to upgrade your existing system.
Stand-alone systems offer you more control over your HR technology contracts. They often have more in-built features, too. For example, greater capacity for setting up variations for leave or audits. Most stand-alone systems will include some forms of accounting data, such as pay groups or cost centres. With stand-alone systems, the HR system will feed payroll and then finance. However, with an integrated system, it only feeds finance.
When it comes to the selection process, stand-alone systems can be more straightforward. The needs of a payroll and HR team are very different. So, a stand-alone system may suit your unique business needs more. It can be tough to transition from a stand-alone software to a new system, especially if your business is on a global scale. You may be committed to an existing system, too. It’s a simpler process to update your current software, as this requires less training.
Every business has its own unique needs, and there is no one right choice. Firstly, spend time understanding how your business manages HR and payroll functions. Write a list of critical payroll and HR features, as well as your internal processes. This can be a lengthy process, but it should make your requirements clearer.
Secondly, have a list of non-negotiables for both functions. You may find it helpful to write a list of questions to ask each provider. For example, ask about the security of each system. You may want to ask about any additional support available. These questions will help you compare each software provider.
Finally, consider the cost of each system. Pricing should be straightforward and there shouldn’t be any hidden costs. Look for a provider that doesn’t lock you into a long-term contract. They should be upfront about their pricing. This will avoid a lengthy negotiation process.
Choosing a new software can be tough, so we will advise you throughout the process. We can outline the unique benefits of each system for your business. Our team will work with you to review your current processes. Implementing a new system can cause difficulties with your current processes. Change within a business is as much a part of a project as the system build. So, we are here to support with change management.
Speak to us today or use our contact form.