Sarah Oliver outlines why integration is key to the future of HR and payroll, how both teams can serve to make it work, and the common pitfalls involved in this approach.
In today’s competitive work environment, there is much talk of increasing efficiency in all areas to boost productivity and create savings that directly impact the bottom line. For HR and payroll teams, this is most evident in a shift towards the integration of data management and an overall drive for bringing the two together in order to overcome the traditionally divergent nature of these roles.
Yet this can only be made possible with the right approach, without which the aims of integration can be undermined, negatively affecting both output and business profitability.
Operational efficiency is imperative to all functions within business and good data is one of the best ways of achieving this. The unfortunate negativity associated with administrative processes often belies this perception, particularly for HR professionals, who are under more pressure than ever before to punch above their weight for a place on the board.
Yet in order to support a more strategic approach, it is imperative that HR teams have access to consistent, reliable information. Through sharing data with payroll teams, HR benefits from having confidence in all its data, including vital pay-related information, such as salary and bank details, preventing the potential for misleading information that may cause bad or ill-informed decisions.
For both teams, holding data in a central location means reduced data entry and an immediacy of information that reduces the likelihood of business disasters, such as employees being paid inaccurately or, in the worst case scenario, not at all.
Additionally, removing the need to pass information from one team to another means a streamlining of day-to-day data management, less data entry on both sides, and a shift towards working together more effectively. Knowing that you no longer need to rely on others for the quality of information held is invaluable in simply getting the job done, whilst serving to quash negativity and the ever dangerous ‘blame culture’.
A trend towards shared services is also a strong indication of how integration promotes better business practice. For larger organisations, such as Jardine Lloyd Thompson, where HR and payroll teams serve a number of different business divisions, a shared services model is a pragmatic means of solving data management issues and thereby creating end-to-end processes.
Whilst shared service centres put the emphasis on administration, what they start to do is take information management ‘back-to-basics’. By regarding data as the underpinning force in all business processes, all those involved stand to benefit from a more cohesive approach across the board. This is a very real means of integrating HR and payroll at all levels, with those involved citing increased accountability and ownership as some of the main advantages.
Whilst shared services cannot work for all organisations, the underlying philosophy certainly points towards the centralisation of employee information for greater integrity of data.
How to approach integration
For those organisations that decide to take the plunge and introduce a combined database, it is essential that HR and payroll work together from the start to ensure that the system works for both teams.
Each team should meet separately to draw up a list of requirements for discussion, with neither team seeking to steam roll the other when agreeing on what the system needs to do.
Likewise, all involved should avoid including functionality just for the sake of it; take a realistic look at the usefulness of each bit of information so that neither area is overloaded with unnecessary and often cumbersome information.
Communication throughout the project is again the only way of making sure that both parties are happy with the end result. Involvement by all in the tendering process and usability testing, particularly by those who will be using the system on a daily basis, is the only means of securing buy-in from all users. All too often, systems are implemented without a sense of direction or participation from those at ground level, which can soon make software redundant.
This should also be viewed as an opportunity to assess current process management and understand how it could be improved upon. Teams would benefit from thinking not only about their own processes but those of the other department and how they can serve them better. Regarding one another as clients rather than colleagues can be a helpful tool for encouraging more constructive relationships and facilitating a unified approach.
Avoiding the pitfalls
When thinking about implementing a system, it is important to set out your objectives from the outset. Be sure about what you want to achieve from the system and use this to measure its success both during and after implementation.
Above all, consider the new system as a fresh start and a way of adopting a more holistic approach to HR and payroll process management. For any initiative to work, it requires considered planning, consistency and focus. Bringing your data together may seem like a tall order in the interim, but the rewards should be long lasting and experienced across the organisation.
Sarah Oliver is an HR consultant at Snowdrop, the UK HR software and payroll solutions specialist.