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The advantages of integrating HR and payroll software

Stephanie Coward, Managing Director of HCM, IRIS Software Group

Payroll teams are integral to businesses up and down the country. After all, ensuring workers get paid accurately – as well as on time, every time – is no mean feat. 

But while payroll is full of talented and highly qualified individuals, there are inefficiencies plaguing the industry. For example, many businesses haven’t integrated their payroll and HR software. This is a shame, as integrating payroll and HR software comes with many advantages.

Boosted accuracy rates

One of the main advantages of integrating payroll and HR software is accuracy. According to a recent survey, 91% of businesses in the UK and Ireland admit to making payroll errors every month. While some of these errors are minor and easy to resolve, some are serious. They can take significant time to fix and lead to penalties and interest charges from HMRC. As one survey reported, payroll errors can cost some businesses up to £150,000 a month. Not only this, but they can seriously demoralise a workforce. According to a survey, almost half (49%) of employees would search for a new job after only two issues with their payroll.

While there can be any number of reasons behind payroll errors, many are administrative in origin. This is especially the case when businesses use separate payroll and HR databases. After all, maintaining separate payroll and HR databases often entails extensive manual inputting and transferring. Such administrative tasks can be tiresome as well as prone to human error. It only takes one missing zero or one misplaced decimal point for a serious mistake to occur. 

Using a combined HR and payroll software can vastly reduce the risk of such payroll errors, as it eliminates the need for separate payroll and HR databases. With payroll and HR software integration, inputting mistakes and duplication are much less likely. For example, whenever an employee updates information such as their home address or bank details, this change is properly recorded everywhere it needs to be recorded – straight away.

Support compliance 

As every payroll professional knows, on a day-to-day basis, there can be any number of compliance issues to bear in mind. Deducting the right amount of tax and National Insurance falls under the umbrella of compliance, as does the correct classification of employees. On top of this, payroll information – names, addresses, pensions, bank details, and salary – is personal information. As a result, payroll teams always need to ensure their processes are GDPR compliant.  

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But if a business doesn’t embrace payroll and HR software integration, there is an increased risk of GDPR non-compliance. For example, it can be all too easy for an overworked payroll professional – perhaps working from home – to accidentally send personal information to the wrong email address. When this happens, it can amount to a serious GDPR breach. 

On the other hand, with a cloud-based integrated payroll and HR solution, there is no need to share personal information via email. Instead, payroll professionals, HR professionals, and employees can upload and update their sensitive data securely from anywhere – a vastly more secure and flexible way of working.

Help with streamlining 

Not only can a combined payroll and HR solution boost accuracy and bolster compliance, but it can also improve efficiency by consolidating documentation, streamlining workflows, and automating manual tasks.

For example, an integrated payroll and HR solution could house all payroll documents in one place – stopping line managers from sending payslips insecurely and making it easier for employees to access what they need, when they need it. On top of this, an integrated payroll and HR solution could send line managers automated reminders about pay amendments such as overtime or expenses, ensuring key deadlines aren’t missed. 

Integration and automation

Without integration, payroll and HR professionals are often stuck with unwieldy administrative tasks – for example, using separate spreadsheets to record absences, expenses, and holidays. Payroll and HR professionals are talented and often highly qualified folk; doing avoidable and automatable admin is not the best use of their time. 

A combined payroll and HR solution can streamline what can be streamlined, freeing up the time of payroll and HR professionals so they can focus on adding strategic value.

What’s more, using integrated payroll and HR software can boost accuracy, bolster compliance, and improve efficiency without adding headcount: especially useful while we’re in the midst of a shortage of payroll professionals.

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