• Startup
  • Payroll/Taxes
  • Human Resources
  • Employee Benefits
  • Business Insurance
  • Compliance
  • Marketing
  • Funding
  • Accounting
  • Management
  • Finance
  • Payment Processing
  • Taxes
  • Overtime
  • Outsourcing
  • Time & Attendance
  • Analytics
  • PEO
  • Outsourcing
  • HCM
  • Hiring
  • Onboarding
  • Recruiting
  • Retirement
  • Group Health
  • Individual Insurance
  • Health Care
  • Employment Law
  • Tax Reform
Coronavirus Help Center - May 22: The latest government update loan forgiveness is here.

Payroll Management and HCM: Technology Creates a Leadership Opportunity


When paying employees, you may be tasked with monitoring and applying payroll controls, scheduling, and reporting. Meanwhile, HR duties such as applicant tracking, data on new hires and existing employees, and managing benefits along with staying compliant also demand regular attention.

These routine payroll and human capital management (HCM) tasks could rob you of time, energy, and focus that could be spent on more forward-thinking activities. Integrating payroll management and HCM can be your key to being a strategic and influential contributor to your organization while helping the organization function more optimally.

Payroll management and HCM integration

Advances in HR technology have empowered payroll managers and HR to work as a single system, ultimately driving efficiency, boosting productivity, and unleashing strategic potential. Instead of maintaining human resources and payroll as separate entities, an integrated HR and payroll system connects payroll (e.g. tracking time, attendance, and cutting checks) with HR (e.g. benefits, recruitment data, onboarding, training, and reporting) into one platform.

Organizations with a strong HCM strategy often allow the payroll manager to evolve into a leadership position. The competitive demands of business today, coupled with the possibilities opened by automation, have elevated payroll management and HR from transactional roles to a valuable, strategic asset in many firms.

Why integrate payroll and HCM?

With the right automated HCM software in place, an organization can experience a reduction in paperwork, freed-up administrative time and focus, the ability to gauge employee performance and increase employee access to information through self-service.

Collectively, HCM integration is both a technological solution and a strategy for improving the company. The right tools can help enhance department operations, increase return on investment, and influence transformative activities in your organization — ultimately nurturing a work environment that encourages employee engagement and maximizes their potential. This is the foundation that helps a business to become more competitive and successful.

Transitioning payroll into a leadership activity

A key component to driving positive change in your company resides in how you influence decisions. With the right HCM and payroll vendor, technology, and solutions, you may be able to expand your strategic influence. Your checklist of what to look for in a combined payroll and HCM system may include the ability to:

Reduce costs with automation. Pushing paper is expensive and inefficient. Most companies, regardless of size, are adopting some form of automation in their payroll process to save time, reduce laborious data entry, improve accuracy, and decrease redundancy. An HCM system can be a powerful tool when it integrates payroll with other human resources functions, such as:

  • Recruiting, applicant tracking, and hiring;
  • Employee demographics;
  • Time and attendance;
  • Benefits administration;
  • 401(k) recordkeeping;
  • Expense management; and
  • Performance management.

By automating these areas, you can demonstrate measurable improvements in accuracy, processing times, and data protection.

Use HR data insights to guide decisions. HCM solutions offer powerful reporting and data analytics capabilities. Payroll costs typically represent one of the company's largest expense line items, and you're in the best position to identify and correct abnormal cost trends. Using simple yet powerful reporting tools, you can answer key questions, such as:

  • Where do we spend the most money?
  • Where are my labor costs allocated?

Making these queries at regular intervals can keep your firm's costs in line. Reporting features such as real-time, function-focused, and customizable analytics tools, can help you uncover patterns in business operations, such as inefficiencies or productivity gaps.

Drive employee engagement. Employees are engaged when they see the big picture and how they align with the overall company strategy. Cumbersome, labor-intensive processes can make for a frustrating employee experience and potentially limit your company's ability to engage and retain your most promising talent. Employees today are no longer interested in meeting with the HR department to accomplish simple tasks like filling out forms or requesting status information. Rather, they expect an experience that empowers them to:

  • Update their own demographic information;
  • Enter time and attendance data;
  • View available vacation and sick time balances; or
  • Find answers to benefit questions online, at their convenience, anytime and anywhere, and on their devices.

Moreover, they expect that experience to be simple and easy-to-use. Anything less can be frustrating.

Expand benefit offerings. Employee benefits give an organization an advantage in attracting and retaining talent. But managing benefits including (but not limited to) a company-sponsored 401(k), disability insurance, flex time, and health savings accounts translates to more paperwork, unless your system is automated. With an integrated HCM system, you can streamline administrative tasks while giving employees benefits that demonstrate the organization's appreciation for their hard work.

Scale your system to the organization's needs. It's not just the number of employees that grow with a business. Your payroll/HR needs, benefits, and reporting requirements will evolve as well. Having the right system in place means you can add features as your needs and workforce evolve without the hassle of changing systems or vendors.

Becoming an HR thought leader

With the capabilities of the right payroll management and HCM solution in place, you can deliver insights that empower your HR department and the rest of the organization — and perhaps more importantly, demonstrate to the C-suite how payroll functions have significance beyond employee paychecks. For example:

  • Align payroll costs with company goals;
  • Track overtime trends;
  • Become proactive and monitor your audit log;
  • Develop "what if" scenarios; and
  • Compare payrolls to spot errors.

A good first step toward achieving this is studying industry and technology trends, keeping yourself and other leaders on top of appropriate applications for your firm. Additionally, identify areas for improvement — inside your department and for employees directly.

Demonstrate a positive return on investment by using HCM data analytics. More HR professionals are relying on analytics, with 95 percent currently using them, compared with 90 percent in 2017, the 2018 Paychex Pulse of HR Survey found.

Ultimately, technology can help HR teams be more strategic. Drive change through your organization by proving the value of your ideas. Use automated payroll and HCM solutions to develop managerial efficiencies, provide data-driven business insights, and position yourself as a leading change agent within your organization.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.