Do you need multiple HR tools or one system?

Implementation

Installation and implementation of each individual piece of software is usually quicker and easier due to the narrower scope and smaller number of users compared to an organization-wide HRMS.

However, multiple tools means multiple projects, with multiple project teams, and unconnected project timelines and activities.

Though a larger endeavor, an implemented and installed HRMS is more likely to work out of the box, as opposed to a collection of separate items that must be made to work together.

Furthermore, an HRMS implementation is a single project, with a single team and management process.

Features

Any best-of-breed software tool is likely to be more advanced or offer more sophisticated functions – in other words, a payroll module is likely to be better at managing your payroll than the payroll element of an all-inclusive HRMS.

The lack of specialization means than an HRMS is more generic and likely to be more limited in function… which does not mean it can’t be a perfect fit - it depends on your business needs).

User training

A specialized, one-function piece of software will almost certainly have less users than an HRMS. This means shorter and more focused user training which is likely to be more effective (though narrower in scope) than the equivalent training in an HRMS implementation project.

If you’re working with multiple individual tools from multiple vendors there is likely to be less consistency across your HR tech user training.

Larger-scale training programs for greater numbers of users can have benefits in terms of costs (economies of scale) and consistency (a single trainer or team of trainers for the whole system).

Data

To get the best from your HR tools, they need to be working with the same employee data. This leaves two options: either double (or multiple) entry of information, or exchange of information between tools.

The former risks mistakes and complaints. The latter can be a significant technical problem.

An HRMS uses a single, integrated information database, avoiding issues of compatibility and (with single input) human error.

Security

Multiple logins for multiple tools can result in security risks. As can the complex architecture between disparate best-of-breed platforms.

A single login on a single platform reduces the potential points of ingress for a cyber-attack.

User experience

The usual user experience of several HR tools includes not only multiple logins but also multiple and varied interfaces and processes.

A clear benefit of an integrated HRMS is that once a user has learned to navigate the system, has understood the system’s logic and structure, then that knowledge applies to the whole system.

In other words, the uniformity of the user experience means it’s not necessary to learn the basics every time a user learns to use a new automated process.

Management and strategy

Individual HR tools may come equipped with more sophisticated reporting and analytics capability. But the benefit of HR analytics depends on the depth and variety of data available and so the above issues around data compatibility and sharing apply.

An HRMS suite usually comes with a single reporting function that draws on the system’s common database (i.e. all your digitally-available HR data).

Maintenance and support

On the one hand, specialized HR tools are easier to maintain and upgrade, working on a much smaller scale to an integrated suite.

However, though individual updates may be more frequent, if those tools are from multiple vendors then it becomes much more difficult to coordinate the support across your HR function.

A more coordinated schedule of updates and upgrades is not only easier to manage, but it also reduces any burden on your in-house IT managers.

Vendor relationship

A vendor that specializes in one or two types of HR tools is likely to be bringing a degree of expertise to the table.

Also, dealing with multiple vendors mitigates the risk of a vendor going out of business – you may lose vendor support for time and attendance, for example, but the fallout will not affect your recruitment activities.

Your relationship with a vendor supplying all your HR software needs via an integrated HRMS will potentially be deeper and more involved than those with a collection of vendors, each supplying a different tool.