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The Value of Integrating Human Resources and Payroll

Payroll
Article
08/11/2015

Businesses large and small have generally maintained human resources and payroll as separate functions in their organizational charts. But increasingly, business owners are seeing the wisdom of an HR/payroll system - not only as a potential cost-savings measure, but to enhance efficiency and lessen or eliminate duplicate work.

If you're still questioning the need for this type of automated integration, here are some benefits to consider for your own business:

Reduction in Paperwork

Applicant tracking and data on new hires and existing employees can generate a mountain of paperwork. The problem is compounded when payroll requires similar information. Integrating HR and payroll may enable managers and others to access applicable information via the same database. For example, when an employee opts to add a benefit and HR compiles the information and enters it in the database, the payroll deduction is entered simultaneously, removing the need for additional paperwork.

Another key feature of an integrated system is automatic updating. When HR and payroll utilize the same employee database, information entered by HR is automatically updated in payroll. This means less work for employees and HR staff, and fewer chances for mistakes in documentation.

Freeing Administrative Time and Focus

Your HR and payroll staffs will be the first to note just how much time and energy they spend on routine administrative tasks. This type of low-level activity diminishes the opportunity for them to focus on more productive efforts, such as streamlining the new employee recruitment process or improving payroll operations. With payroll and human resources integration, HR can enter data - everything from staff reviews and benefits information to mandatory payroll and tax forms, once, into a single interface, rather than expend valuable resources on the routine collection and inputting of employee data.

Gauging Employee Performance

An integrated system enables businesses to more effectively combine data on recruitment, learning, and compensation models (information that previously existed in separate and sometimes overlapping functions). Analyzing this data can lead to new approaches to employee training and development.

Employee Access to Information

With payroll and HR data available via a single interface, employee self-service features can become more efficient. Employees can quickly access information about benefits, payroll, available sick-time and vacation, as well as tax deductions. The result is often greater employee satisfaction and the ability to resolve simple issues on their own, with a corresponding reduction in the time needed by HR managers and staff to address these issues.

Enhanced Accuracy and Security

With fewer people entering information across platforms, the process of data entry can be made more efficient and more accurate, and may help prevent costly mistakes along with saving the time required to fix them. Sensitive information such as compensation, Social Security numbers, and benefits is less likely to be breached where such data has been integrated into a secure HR platform,

Businesses absolutely depend upon having accurate and detailed information about their workforce. By integrating human resources and payroll functions, the managers and executives charged with making key personnel decisions may have better material to work with and a keener understanding of how employee performance, compensation, and benefits fit into the long-range strategy for growth.

 

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.
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