How payroll integration can generate transformative HR change

Payroll is all too commonly perceived as a standalone function that quietly gets on with processing everyone’s wages in isolation.

But taking such a view is to ignore the key role it plays within the business. In fact, without the ability to pay employees, there soon would be no business at all. As a result, a more appropriate way to view payroll might be as the core engine of HR, around which all other activities are based.

This means that if people are to be paid accurately and on time, professionals must have access to clean, up-to-date information from a range of different departments and systems.

But all too often, this is simply not the case. Many organisations have a habit of isolating their payroll software from other HR applications, with the upshot being that they fail to integrate easily. An equally challenging situation is when an all-in-one payroll and HR system is introduced that lacks the sophisticated functionality required to process complex payrolls.

The importance of payroll integration

There is some awareness at the senior executive level of just how problematic this situation is though. According to our research, just over half (52%) of the business leaders believe that a lack of integration between their internal payroll and HR systems is creating major problems for their organisation.

Three quarters recognised that their existing payroll and HR applications don’t integrate effectively with third party software, while a huge 88% said that improving integration levels is either ‘quite’ or ‘very’ important over the next two years.

To illustrate this crucial point, here are five key areas in which having integrated HR and payroll software can bring about transformative change for HR:

1. HR System of Record

There are a number of advantages to integrating your payroll and core HR software. For example, when new starters join the organisation, the payroll team will automatically be made aware of the situation to ensure they have all the relevant information needed for payment to take place – without any unfortunate delays.

Integration also makes it possible to consolidate all important pay- and HR-related information into a single employee record in a secure and compliant fashion. Doing so avoids any unnecessary manual rekeying of data, which tends to lead to human error.

2. Time and attendance

Integrating payroll systems with time and attendance applications (or other workforce management software) makes it possible to automate the process of sharing accurate records relating to an employee’s working hours and, therefore, the number of hours they should be paid for. This is particularly important for organisations that have shift-based or contingent workers.

As it is no longer necessary to manually key in information here either, the chances of under- and overpayment become much less likely. As a result, not only will employees be more satisfied with the service they receive, but compliance with regulations such as the National Minimum Wage and National Living Wage will become less of a concern too.

3. Benefits

If employee benefits and payroll systems are integrated, it means that when individuals opt to take advantage of a new perk, which includes tax-deductible and salary sacrifice schemes, the information is communicated directly to payroll. This again reduces the likelihood of manual inputting errors and improves the overall efficiency of the payroll process.

Another benefit of combining such information is that it can be presented on each individual’s payslip in the form of a Total Reward Statement. Usually accessed via employee self-service platforms, these statements clearly present the total value of an individual’s employment package, which helps to boost both satisfaction and financial literacy.

4. Financial wellbeing

The advantage of integrating financial wellbeing tools with payroll systems is that staff have more control over how they access their pay. To this end, we have taken the step of integrating our payroll solution, Zellis HCM Cloud, with Wagestream. The move is part of a wider, marked shift towards giving employees more flexibility in how they are paid.

Wagestream’s smartphone app enables employees to view their expected earnings and understand their current financial position. It also enables them to access up to 40% of their earned pay each month before payday, a sum that, due to seamless integration with Zellis HCM Cloud, is automatically deducted from their wage packet. This means there is no impact on either the normal payroll process or the company’s cash flow.

5. Data analytics

While payroll data is often viewed as simply functional in nature, in reality, it has a strategic role to play too, especially if combined with other key HR, business, and financial metrics.

Having a single source of truth for all people data, which includes payroll, makes it possible to use analytics and reporting tools to gain powerful insights into workforce trends and patterns, thereby helping organisations to understand and optimise the employee experience and drive better business outcomes.

Some key examples here include enhanced workforce planning, improving the recruitment and retention of talent, and minimising errors to ensure payroll processing is more accurate and cost-effective.

Putting payroll at the heart of your HCM operation

Put another way, the strategic nature of payroll, which sits at the heart of the HR mission, means it should never simply be included as an afterthought when putting together your wider Human Capital Management (HCM) technology stack.

Instead, the sure-fire way to payroll and HR success involves integrating your best-of-breed payroll software with other key HR systems. So, what are you waiting for? To learn more about how Zellis can help transform your payroll and HR operations, get in touch today.