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Why Should HR Systems be Integrated?

Posted by: adpindia on 21 September 2017 in Human Capital Management, Payroll

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In today’s world, connected systems have a major role in creating efficient workplaces. These systems help business owners stay on top of their day to day activities. Yet, several businesses still rely on HR systems which work in silos. According to a survey by ADP, HCM decision makers across the world revealed that companies on an average have more than 31 HR applications and 33 payroll systems. The situation is even more complex with trans-national companies, which manage an average of 40 to 50 different systems for payroll and HR. As a result, several HR professionals spend a lot of their time manually entering data into various systems and cross-checking to ensure there are no errors.

A unified HR system, in contrast, would simplify workforce management and unlock insights to support business performance. Besides, having a holistic HR system, with all of your HR data residing in one place, can help you identify potential gaps which might affect productivity as well as have greater control of your workforce needs.

How Can HR Systems Contribute to a Compliant, Connected Workplace?

Let us understand why connected systems are important in your organisation with the help of a byproduct of payroll processing: an employee’s payslip. This payroll output is one of the main components of the payroll process and aptly summarizes your company’s most important expense. If you look closely at the information required to generate your employees’ payslips, you will see that it is a derivative of data fetched from various modules in your HCM system. You will require data on pay components – allowances and deductions, attendance inputs, leave information. In case of an employee exiting from your organisation, you would require information on the Full and Final settlement to reflect in the payroll. It can be extremely time consuming to manually aggregate all of this data to comply with reporting requirements.

In case you do not have a fully integrated HR system, you would need to access –

  • The payroll system to verify the pay components and the respective pay inputs for each employee
  • The attendance system to get the right monthly attendance inputs
  • The leave system to access leave information such a as Loss of Pay (LOP) details
  • In case of a separation, you will also have to fetch data on arrears if any and consolidate the full and final settlement

Each system needs to be accessed separately to extract and merge the data so everything is in one place and only then can you continue with processing your payroll. And, this is just one part of the problem. Your payroll data needs to comply with ever changing payroll compliance rules, and with 83 compliance changes in India in 2016 alone, making a mistake could adversely affect your business.

As your business scales, you would require efficient systems in place not only to support your business growth but also to simplify compliance and control costs. Integrating your HR systems can help you to proactively monitor different aspects of your HR function, keep a track of your employees’ data and streamline administrative tasks by reducing the possibility of error.

Safeguard Your Most Important Asset – Your Employees

Having your HR data present in one centralised system would help you to draw meaningful insights through HR Analytics. It could help you take informed business decisions, improve productivity and increase employee engagement at your workplace. In fact, according to a survey by Bersin, companies that embrace an integrated data approach to HR have a 38% higher retention rate, 40% higher employee engagement and almost double the revenue per employee.

The data from an integrated HCM provides you a consolidated view of information collected from different HR modules –

  • It can provide valuable insights on employee engagement, turnover, performance etc. For example, if you notice a sudden spike in employee turnover, you have the data on hand to investigate what exactly is causing this, compare it with industry benchmarks and predict which employees are at a risk of leaving your organisation.
  • You can then develop successful retention plans to keep your top performers happy and avoid this from happening in the future.
  • You can also use this data to feed into your other systems and help assist other functions, such as your Finance department, in making annual plans and allocating budgets.

An Integrated HR System – Your Answer to an Engaged and Efficient Workplace

An integrated HR system can help streamline your day to day administrative tasks by preventing manual errors and saving the time and money it would take to correct them. With all of your HR modules available from one single interface, your employees can quickly access information, answer basic questions themselves as well as decrease the time spent by your HR function in resolving simple issues. With a single interface available to enter and extract information in one single go, this system can help boost HR productivity and help them concentrate more on high-value activities than redundant tasks. In a nutshell, an integrated HR system can help you build an engaged and efficient workplace for the future.

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