No HR and payroll integration? You’re missing the full picture

The role of HR has changed.

No longer strictly confined to admin and policy, HR is increasingly taking on a more strategic role.

Hugely exciting for the industry!

However, many HR professionals are being blocked at the first step in acting more strategically: making use of their workforce data.

To fully transition into a strategic business function, HR professionals need accurate, up-to-date data.

Without it, you’re missing the full picture.

Employees suffer, problem areas go unchecked and decisions are based on guesswork rather than fact.

Unfortunately, the reality for many small businesses is that a lack of HR and payroll integration, coupled with outdated reporting processes, impacts their ability to use data and hinders their strategic thinking.

The current state of data: disconnected HR systems

The CIPD recently published an article in relation to maximising the impact of people professionals, stating that well-designed, strategically aligned HR systems can drive stronger organisational outcomes. 

However, for all the talk in the industry around HR operating more strategically, the reality on the ground tells a completely different story.

Our research found that HR professionals lose an average of half a working day (3.4 hours) every week to poorly integrated systems.

Only 28% have a fully or largely integrated HR platform in place, and the rest are navigating a patchwork of systems and spreadsheets (34%) or relying on manual processes alone (24%).

It’s also not exclusively an HR issue.

The CIPP cites a lack of integration as a key challenge for payroll, creating a fragmented landscape.

The role of integrated HR and payroll systems

I’m sure you have plenty of burning questions on how to close the gap between where HR is now and where it needs to be.

Well, it starts with integrating your HR and payroll software, creating a single source of truth for HR.

HR and payroll integration uses an Application Programming Interface (API).

Think of an API as a digital bridge, linking your HR and payroll software so information flows automatically between systems.

Now, the real value isn’t just cleaner data flow.

It’s what connected data empowers you to do.

Data visibility

Data visibility matters more than ever because demand for workforce insight is rapidly climbing.

CIPD research urges businesses to prioritise clearer, more consistent workforce reporting.

Their findings flag that stronger workforce reporting standards help build a future of higher business performance, greater accountability and more meaningful engagement with shareholders and other stakeholders. 

So, if you’re looking to elevate your role and be more strategic, putting accurate, current figures in front of leadership becomes a key part of the job.

To achieve this, integrated HR and payroll systems help break down HR data silos and give visibility of your most critical information.

Rather than exporting from one system, reconciling against another and rebuilding a spreadsheet every month, the information is available in the system, ready to interrogate.

Now, where it gets exciting is that good HR software enables you to create customisable dashboards in the system for all the common data areas that you’ll need throughout your day-to-day, as well as providing access to custom and pre-built reports.

Data confidence

The CIPD frames people analytics as core knowledge that HR professionals need to be comfortable using to make sound business decisions.

But that’s only possible when your people data is accurate; ultimately, your strategic decisions are only as reliable as the data behind them.

With modern HR software, much of the employee data is entered and maintained by employees themselves through self-service, massively helping the accuracy.

Now, not only does that make HR’s life easier, but it also benefits payroll.

Through software integration, data flows directly into payroll, removing the manual handoffs where errors typically creep in.

Data usage

When all your workforce data is accurate and sits in one location, you can make magic happen.

Patterns in the data you’d otherwise miss start to surface, enabling you to act strategically.

Here are a few examples of what good workforce data enables you to spot and tackle.

Absence trends

Good workforce data enables you to break down absences to a granular level, by team, manager, reason and time of year.

So, if one department is consistently above the norm, HR can investigate the cause.

Perhaps workloads are too high, management isn’t offering enough assistance or there’s a recurring seasonal spike.

Having this information enables you to offer targeted support, resulting in fewer days lost and earlier intervention before wellbeing issues escalate.

With workplace sickness estimated to be costing businesses over £100bn a year, this added visibility has an extremely strong business case.

Retention risks

Are employees from a certain team quitting more regularly? Does a specific role have more turnover? Is there a location with noticeably higher churn?

Being able to answer these types of questions is crucial for your HR strategy, especially when you consider that hiring a new employee can end up costing almost double their salary. 

When employee turnover data sits alongside other information, such as pay, performance and general feedback, HR is not only in a better place to locate issues before they spiral, but has the necessary information to make a meaningful difference.

For example, an attrition spike in one team might point to:

• Management problems
• Uncompetitive pay bands
• Burnout

Spotting it early means you can act quickly, whether that’s adjusting pay, training managers or offering added support.

For your bottom line, this means lower recruitment pressure and less disruption to the wider team.

Workforce cost control

HR and payroll integration gives you a live, accurate picture of what your workforce actually costs.

Not just salaries, but overtime, bonuses and the hidden cost of absence and days lost.

Working with finance, you can use this workforce data to accurately determine:

• The cost of a pay rise
• The impact of headcount changes
• Where overtime is quietly creeping up

Financial budgets built on fact rather than guesswork mean there will be far fewer nasty surprises along the way.

Don’t miss the full picture

HR strategy needs good data, and to get good data, you need good systems.

Staffology HR and Staffology Payroll are built to work together, so your workforce data flows straight through without the need for a manual bridge.

If you’re ready to make a change, check out Staffology!

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