3 Reasons HRMS is Still the Best Choice for Managing Payroll
Your organization has many options for managing payroll, and one model utilized by many is to utilise HRMS payroll management. While you could manage in separate products and interface the data between systems, managing your payroll within your HRMS is often a best case scenario, and here’s why:
1) The Data Becomes a Single Source of Truth
While you could manage payroll outside of your HRMS, I’ve seen in many cases where the use of the local payroll system then overshadows the HRMS. It causes confusion—should a headcount report come from payroll or the HRMS? Which one is right if they’re different? Whose report should I trust? While you can mitigate and manage this risk, when you have one HR data set, there is no discussion in this area, and people learn to trust it as this one system will then be used universally.
2) Less Work to Keep Systems in Sync When Everything Is in One System
While there are many wonderful payroll systems, there’s no arguing the fact that interfacing data costs money. There are design and analysis costs, file transfers to set up and maintain, plus the staff time and effort to investigate when something goes amiss. I recently reviewed a situation where a multi-national had an HRMS plus local payroll systems around the world. When the interface in a certain country stopped running, the HR colleagues did not have the time or incentive to do dual entry and the two systems quickly became different as the HRMS data was not maintained. You can imagine the reconciliation and data cleanup efforts that ensued, on top of fixing the broken interface!
3) You Gain Process Efficiencies through Tightly Woven Processes
I once saw a full-service HRMS where everything was consolidated in the one system. An employee would be hired into the HRMS and later would register for training. The manager was automatically informed to approve, and once approved, the timekeeping system was inside the HRMS and it would automatically block the employee’s time from being scheduled on a work shift. After the training, the payroll was also inside the HRMS, so a pay increase would then be applied automatically to the employee. If you use multiple systems in such a scenario, it’s possible for things to break and steps are often manual and with a time lag. Putting all of this functionality into your HRMS enables all of the components that impact pay to be at hand for more streamlined HR processes.
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