What is the Difference Between Integrated HR and Payroll and a Single Solution?

The past few years have been challenging for Human Resources and Payroll departments. The rapid shift to remote working has necessitated new ways of managing teams, with businesses investing heavily in digital transformation – adopting new software for internal communications, employee engagement, and project management.

But for many organisations, investment in HR and Payroll systems has been slower – with many HR leaders feeling their businesses need to invest more to improve employee experience. While both departments have typically been seen as back-office processes, they provide business-critical functions that must be streamlined to meet the demands of the post-pandemic world.

The great resignation, combined with a candidate-driven market means that organisations need to change their approach to both HR and Payroll. From employee onboarding and throughout and employee lifecycle, employers need to provide self-service options and improved employee experience to remain competitive.

Organisations need to be investing in HR and Payroll solutions to bolster their digital transformation efforts. Every business is different, with a specific set of needs and goals, and with the plethora of software options to choose from, finding the right solution can be a daunting task. Messaging from vendors can often be confusing, with terms like single solution and integrated solution frequently used interchangeably.

However, these are not the same – so let’s explore the difference between integrated HR and Payroll software, and a single solution, built on the same platform.

What is a single solution for HR & Payroll?

A single solution is not the same as a payroll system that can integrate with an HR solution. Because an integrated solution will have separate databases for both HR and payroll, this can lead to separate versions of the truth – this is the most important distinction to make between the two.

In a single solution, changes made to an HR record will be replicated in real-time for payroll– becoming immediately aligned without any external interaction. This automates and streamlines processes, removing any risk of duplicate data or simple mistakes.

With a single solution, the two departments can work together seamlessly, delivering a consistent and coherent employee experience, though onboarding, compensation management, payroll processing, payslips – vital and sensitive functions for the benefit of all employees.

Our research has shown that the friction between Human Resources and Payroll departments often stems from the flow of information. These types of bottlenecks have typically characterised the relationship between the two departments, creating unnecessary administrative burden and delays. This can result in limited trust for these departments, damaging their reputation in the business and hurting employee experience.

At a time when many employees are suggesting that poor work-place technology is contributing to their desire to leave their jobs, this is not an acceptable situation.

This is why many business leaders are increasingly recognising the need of implementing a unified platform solution, as having separate HR software and Payroll systems – even integrated ones – can quickly become unwieldy, with increased security risks that can hamper digital transformation efforts.

The Benefits of a Single Solution

Efficiency and Agility

Implementing a single solution for HR and Payroll reduces administrative overheads. With a single database, any information only needs to be uploaded or updated once, with changes mirrored instantly across the two departments. This makes managing every stage of an employee lifecycle much easier.

The ability to automate processes also hugely impacts the speed and efficiency for both departments. Being able to swiftly onboard new employees helps them to quickly settle into new roles, and research from Glassdoor shows that a strong onboarding process boosts retention of new hires by as much as 82%.

Similarly for Payroll, automating processes such as benefits administration and tax deductions reduces burdens on Payroll staff.

This streamlined way of managing employees and cross-departmental collaboration is less possible with an integrated solution, simply because mirroring all this data in separate systems creates more manual processes, rather than minimising them.

Collaboration and Productivity:

Having this shared access not only improves efficiency but also drives greater collaboration between the two departments. Removing information bottlenecks allows for a seamless flow of data between both Human Resources and Payroll and reducing manual data entry.

Self-service overtime or holiday requests from employees will immediately be updated in the system for both departments, allowing any change in payment calculations to be done simultaneously. Likewise, any promotion or change in benefits is instantly replicated, removing any concern that employees will not see changes in their position in the company reflected in their salaries.

With a single platform, there is also no need to have to learn multiple different systems – employees require less training, and don’t need additional skills or understanding to work closely together.

Reporting and Analytics:

A single solution provides a more complete and holistic view for both managers and employees. With full visibility of everything from recruitment, onboarding, training, expenses, performance, absences and

With personalised dashboards, built in and custom workflows, analytics, and approval processes, any changes are viewable instantly across departments, without the need to sync data between systems.  

Having all this data easily accessible means that HR and Payroll can analyse and report on any relevant KPIs seamlessly.

Security and Compliance:

Another issue with integrated HR and Payroll systems is the transfer of sensitive employee data between the two systems. This adds an additional point of failure and additional concerns around security breaches.

The fewer vendors and systems your data must pass through, and the less time it needs to travel or sync between multiple platforms, the better. This is especially true for HR and Payroll departments handling confidential employee information, from tax information to personal contact details, this information needs to be secure.

For XCD, we can leverage the world-leading security Salesforce, with a solution built on the Salesforce platform. This means we are also able to cater to sector-specific regulations, ensuring that businesses are able to implement the right compliance processes and procedures to fit their organisational needs.

Auditing this data is also made simpler, for all the reasons already mentioned: a single source of truth, without the need to check and double check data between two systems, and less prone to problems of human error in data entry.

Employee Experience

A single solution also has positive benefits to your workforce.

With self-service provided across both HR and Payroll, employees can easily access their own records and payslips, keep track of performance reviews and KPI’s, or book annual leave all from the same portal. Simply, better technology equals a better employee experience. Employees don’t need to file forms with HR to request holidays or contact Payroll for their payslips – instead enjoying a streamlined experience where they feel in control of their own needs.

The reduced risk of errors or inconsistencies engenders trust in employees, improving their relationship with the organisation. Happier employees are more productive and easier to retain.

The Business Case for a Single Solution

Investing in technology to increase productivity, efficiency, and compliance is something that all businesses should be looking to accomplish. While many vendors may promise this, the often-integrated nature of the solutions they provide can fail to accomplish these goals in the way that a truly single solution can.

For businesses adopting a single-platform strategy and already heavily invested in the Salesforce platform, there are even more benefits.

Book a demo today and take another step towards complete digital transformation with a cloud based, HMRC approved, single HR and Payroll solution on the Salesforce platform.