10 Reasons You Should Do Payroll In-house – Reason #8: Integrating HR

(eighth post in a series)

One of the most underappreciated reasons for taking payroll in-house is the ability to integrate it with your human resource processes. Most businesses either maintain paper files as their primary record keeping system, or they work with an add-on that their payroll servicer introduced to them. Let’s take a closer look at those, and then we’ll show you some of the advantages of a true integration.

In case you haven’t any experience with HR management systems, they allow you to replace those paper employment files with digital documents. Everything about the employee relationship can be generated, documented, and tracked electronically. Offer letters, resumes, benefits packages, vacation and sick time accruals, and documentation of corrective action are stored in the system. Approvals and acknowledgments are handled electronically. The documents are linked in a relational database, much like client information is tracked in a CRM.

Sticking Apart: HR and Payroll

Despite the fact that salary and benefit information is a critical part of any employee’s human resources file, the information doesn’t always stick together in a convenient way. Instead, it tends to “stick apart” for a variety of reasons, like

  • confidentiality,
  • security, and
  • access control.

Salary information is among the most sensitive in an employee’s file, so access it usually much more restrictive.

Piles of paper

This problem begins with classic paper files. Not every person who has access to HR files needs to have access to payroll information, as well. The only way to control that access is to have separate files, stored in different cabinets or storerooms.
This ensures that different types of sensitive data are properly secured, but it also means that there’s no meaningful integration. Filing times are longer, because information on the same individual is stored in different locations. And as with any physical filing system, there are other problems. Files take up space, which increase overhead. Hard files can also be lost, in whole or in part.

The semi-solution

Payroll services are aware that more and more companies wish to drive payroll with HR, and many of them have responded to that need by adding on human resource management systems. Such a system can address the limitations of physical files, using backups to prevent loss of data and allowing staff access regardless of location.

This usually is a system which was tacked on to the payroll management, and is integrated through some kind of import/export interface. The payroll service may have acquired a company that offers HR management solutions, or written something of their own, but it’s not a seamless integration. The data must be moved back and forth between two programs, and will almost never be entirely synchronized. It’s clumsy and slow, but it’s the best they can do to keep the data secure.

Seamless, Secure Solutions

Where an in-house system shines is its ability to be fully integrated, while at the same time providing granular control for access to information. Each staffer can be given the ability to view what he or she needs to perform job functions, and nothing more. Because the data are in the system regardless, it’s possible for the system to perform background calculations and write reports based on information which isn’t available to the specific employee responsible for those reports.

An in-house solution is built for integration, so importing and exporting data is not necessary. It means that there can be automatic tracking of payroll-related HR decisions, such as those pertaining to vacation, medical benefits, or employment contracts.
Are you still keeping a storeroom full of employee files under lock and key? Or have you tried your servicer’s HR solution, and found it to be lackluster at best? The only way to free yourself of paper files and also receive all the benefits of full integration is with a custom in-house solution.

Contact us today to find out what your HR process could look like.

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