We ran a poll recently asking the industry about the factors behind HR vs Payroll friction that stops their two teams working effectively together.
The feedback was encouraging. Most people felt that in their organisations HR & Payroll enjoyed a harmonious working relationship.
But where there was friction, more often than not it was around information flow.
The information bottlenecks that characterise the traditional relationship between separate HR & Payroll software can become a serious hindrance; reporting ability is curtailed, and delays and mistakes can impact employee trust.
That’s why many modern organisations are exploring the benefits of a single solution cloud system to deliver both HR & Payroll. A single solution platform alleviates many of these issues, delivering immediate time and efficiency benefits for Human Capital Management.
So, let's take a look at the benefits of using a single HR and Payroll solution to solve the common issues that arise between HR and Payroll.
- Integrated systems versus single solutions
- Data accuracy
- Security and compliance
- Cost savings
- Analytics and reporting
- Employee engagement with self-service
Integrated systems versus single solutions
In the past, many organisations preferred to outsource payroll processing to an external payroll provider, but now increasing numbers are choosing to bring the payroll process in-house. While sometimes organisations choose a stand-alone system for payroll processing, often they'll choose a system that combines payroll and HR: an integrated HR and Payroll or single solution HR and Payroll software.
These sound similar, but there are some key differences between an HR and Payroll integration and a true single solution.
Integrated HR and Payroll solutions usually have two separate databases - one for HR and one for Payroll - that are integrated to share information.
In contrast, a truly single solution HR and Payroll solution is a single database that can do both functions.
Although at first glance it may seem like these two options do the same thing, the problem with integrations is that data exists separately in the two databases. Sometimes, in integrations, the data can only flow in one direction between them.
This becomes a problem for integrations when something changes in the HR database and isn't copied into the Payroll data, leading to accounting errors. Suddenly, there's a mistake in payroll processing or a tax deduction calculation, and an unhappy employee hasn't been paid the right amount.
This can lead to friction between HR departments and Payroll departments.
This sort of scenario happens when you integrate Payroll and HR software rather than using a single solution. In single solution HR and Payroll systems, there's a single database. This reduces the likelihood of errors, therefore reducing friction between the two departments.
Now we've looked at the main difference between a single solution and integrated HR and Payroll software, let's break down the ways that a single solution can prevent friction between Payroll and HR professionals.
You might be interested in: Key benefits of a truly single HR and Payroll solution.
One of the most important reasons to choose a single solution for HR and Payroll is the increased accuracy and security it provides. With a single solution, there are fewer duplications and errors because there's only one source of data. You only have to input employees' information once and then it is stored securely in the system. Unlike integrated HR and Payroll software, having all of the information in one central database means that errors won't lead to late payments or incorrect payroll processing.
Security and compliance
Post-GDPR, a single solution HR and Payroll platform is also seen by many practitioners as a more secure way to manage sensitive employee data. Areas of risk such as repeated rekeying or transfer of data between systems are eliminated, along with the other complications that arise through having to deal with multiple vendors or systems.
For example, XCD's HR and Payroll software automates GDPR compliance responsibilities, automatically seeking data processing consent from new and existing employees in, and using reporting templates to notify HR teams when employee records should be deleted.
HMRC legislation is also continuously evolving, which means that payroll software needs to be frequently updated and checked. Compliance with HMRC legislation is easier in a single cloud-based HR and Payroll software, reducing your organisation's liability. A HMRC-recognised single HR and Payroll software simplifies compliance because it automates the administration of accounting, tax, and compliance in the cloud.
You might be interested in: XCD cloud HR solutions and data security.
With HR and Payroll single solutions, functions such as time tracking, reward, attendance, performance management, and more are all kept in the same place that handles payroll process, tax deductions, and benefits administration.
For example, if an employee is promoted, the changed employee information will immediately be visible also in the payroll details, so they can be paid accordingly.
Another example is in absence and leave reporting. While in separate HR and Payroll systems or even sometimes in integrated systems, this might cause information bottlenecks leading to payroll delays. In contrast, a single solution automates this information flow, meaning that each employee's absence and leave can easily be taken into account when processing payroll.
And, when it comes to rewards processing, combining HR and Payroll in one system makes sense because performance and salary reviews and bonus awards can be managed within the same system.
Combining all Payroll and HR information in a single HR system means that it's easier for Human Resources professionals to identify inefficiency and leakages in payroll management. Bringing these processes together in a single system means that it's easier to prevent unnecessary costs caused by liability, admin, errors, and failure demand.
Moreover, payroll processing can be sped up by up to 50% by a single solution HR and Payroll software, significantly boosting productivity for the Payroll department and the entire workforce.
Payroll processes like pensions are streamlined by cloud Payroll and HR software with auto-enrolment, regular pension contribution calculations, additional voluntary contributions, and pension opt-outs.
Analytics and reporting
In a truly single solution system, the information required for reporting and analytics is contained within a single source. This means quicker and simpler running of reports and removing the need for different data sets to be combined and cross-referenced by employees, therefore reducing the risk of human error creeping into information processing.
Single solution Payroll and HR software also has the benefit of being able to bring together data from both departments for improved reporting about the entire workforce. This means that Payroll and HR teams can get actionable insights more easily.
You might be interested in: 6 people analytics metrics you should be tracking.
Employee engagement with self-service
With self-service software that brings together HR and Payroll, employees are able to more easily update information, check digital payslips, and access information. With all this data in one place, employees no longer need to rely on HR for simple tasks and questions.
Being able to access the information via employee self-service in a web browser or mobile app also improves employees' confidence and job satisfaction. This is because employees know that HR and Payroll processes will be carried out effectively, efficiently, and fairly for the whole workforce.
Time and process efficiencies stack up in different ways too. Implementing a single, easy-to-use solution reduces the amount of training required for employees and HR & Payroll staff and ensures a consistent user experience across both HR & Payroll tasks.
The user-friendliness of a single solution boosts productivity for all employees, meaning that the functions and information are easy to access whenever employees require them. With XCD's HR and Payroll single solution, employees benefit from an improved user-friendly experience via a dedicated mobile app, meaning they can access their employee data, timesheets and invoices anywhere, any time.
You might be interested in: How can technology improve employee experience?
Why is single solution HR and Payroll software important post-pandemic?
Covid-19 has changed a lot about how we work, from the rise of remote working to employees' so-called Great Resignation from their employers, to increasingly flexible working hours.
With flexible work, tools that help HR and Payroll departments with time management, absence, attendance, and pay for an increasingly remote workforce are more important than ever.
Not all HR and Payroll solutions are created equal: while many vendors describe their HR & Payroll solution as one ‘integrated’ or ‘combined’ system, this is not the same as single solution.
XCD’s software is a true single solution HR & Payroll platform, meaning data is held in one database. Information added to XCD is immediately available to both HR & Payroll, which operate as one – no integration or combination required.
One login, one system, immediate access to all the information you need.
Our recent webinar examined this issue in more detail: Overcoming Operational Barriers Between HR and Payroll.
Want to learn more about how a single Payroll and HR solution can benefit your organisation? Book a demo today or get in touch.