The 3 Ways to Integrate Your HRIS System With Your Payroll System

Explore seamless strategies for optimizing your workplace efficiency with our guide on innovative ways to integrate your HRIS system. Unlock the full potential of your human resources management

Brett Ungashick
OutSail HRIS Advisor
July 4, 2023
user comparing HRIS systems

As businesses grow and expand, managing employee information and payroll processes can become complex and time-consuming. Organizations often utilize human resource information systems (HRIS) and payroll systems to simplify these processes. HRIS systems are designed to manage employee information, while payroll systems are designed to manage payroll processes, such as calculating employee wages, taxes, and deductions.

Integrating these two systems can provide several benefits, including improved accuracy and efficiency in payroll processing, streamlined data management and reporting, and enhanced compliance and security. This article will discuss the three ways to integrate your HRIS system with your payroll system and recommend the best integration option for your organization.

Understanding HRIS Systems:

An HRIS software system is designed to manage employee data, such as personal information, employment history, and benefits. This system provides a centralized location for all employee information, allowing HR departments to manage and track employee data more efficiently. HRIS systems have many features and capabilities, including employee self-service, onboarding and offboarding, time and attendance tracking, performance management, and benefits administration.

Popular HRIS systems include BambooHR, Zenefits, and Workday. BambooHR offers features such as onboarding, employee self-service, and performance management. Zenefits offers features such as benefits administration, compliance management, and payroll. Workday offers human capital management, financial management, and business planning features.

Understanding Payroll Systems:

Payroll systems are designed to manage payroll processes, such as calculating employee wages, taxes, and deductions. These systems automate payroll tasks, eliminating manual calculations and reducing the risk of errors. Payroll systems have many features and capabilities, including tax filing and compliance, direct deposit, time and attendance tracking, and benefits administration.

Popular payroll systems include ADP, Gusto, and Paychex. ADP offers tax filing and compliance features, direct deposit, and time and attendance tracking. Gusto offers features such as payroll processing, tax filing, and benefits administration. Paychex offers payroll processing, tax filing, and time and attendance tracking features.

Why Integrating HRIS and Payroll Systems is Important

Integrating HRIS and payroll systems can bring significant benefits to businesses. Here are some of the most important benefits:

  • Improved accuracy and efficiency in payroll processing: By integrating HRIS and payroll systems, businesses can eliminate the need for manual data entry, which reduces errors and increases efficiency.
  • Streamlined data management and reporting: Integrating HRIS and payroll systems can enable businesses to centralize their employee data, making it easier to manage and report on.
  • Enhanced compliance and security: Integrating HRIS and payroll systems can help ensure compliance with payroll regulations and protect sensitive employee data.

Option 1: Buy a Bundled HRIS & Payroll Solution

A bundled HRIS and payroll solution is a single software platform combining HRIS and payroll functionality. These systems typically offer many features, from employee data management to payroll processing, benefits administration, and time and attendance tracking.

Pros of bundled HRIS and payroll solutions include:

  1. Streamlined implementation and training: Since the HRIS and payroll functionality are integrated, businesses only need to learn and implement one system.
  2. Reduced costs: Bundled solutions are often cheaper than purchasing separate HRIS and payroll systems.

Cons of bundled HRIS and payroll solutions include:

  1. Limited flexibility: Since these systems are designed to offer a broad range of functionality, they may not be customizable enough to meet the specific needs of a business.
  2. Limited scalability: As businesses grow and their HR and payroll needs change, a bundled solution may be unable to keep up.

Examples of popular bundled HRIS and payroll solutions include Gusto, Zenefits, and Rippling. These systems offer features such as employee data management, payroll processing, benefits administration, and compliance reporting.

Option 2: Look for Systems with Pre-Built Integrations

Another option for integrating HRIS and payroll systems is to look for systems with pre-built integrations. Pre-built integrations refer to the ability of different software systems to communicate and share data seamlessly without the need for custom coding.

Pros of pre-built integrations include:

  1. Ease of use: These integrations are often simple to set up and use, requiring minimal technical expertise.
  2. Scalability: Pre-built integrations are often designed to be scalable, making them suitable for businesses of all sizes.

Cons of pre-built integrations include:

  1. Limited customization: Pre-built integrations are often designed with specific features, and businesses may need help to customize them to meet their unique needs.
  2. Compatibility issues: Pre-built integrations may only be compatible with some HRIS and payroll systems, limiting business options.

Examples of popular HRIS and payroll systems with pre-built integrations include ADP Workforce Now, Paychex Flex, and BambooHR. These systems allow businesses to seamlessly connect their HRIS and payroll systems, making managing employee data and processing payroll easier.

Option 3: Build Your Own Integration

The third option for integrating HRIS and payroll systems is to build a custom integration. This option involves creating a bespoke solution tailored to the business's needs.

Pros of building your integration include:

  1. Complete customization: Building a custom integration allows businesses to create a solution tailored to their unique needs.
  2. Scalability: Custom integrations can be designed to be scalable, making them suitable for businesses of all sizes.

Cons of building your integration include:

  1. High cost: Building a custom integration can be expensive, particularly for small businesses.
  2. Technical expertise required: Building a custom integration requires technical expertise, which may be available in a variety of ways.

Examples of popular HRIS and payroll systems that allow for custom integrations include Workday, SAP SuccessFactors, and Kronos Workforce Ready. These systems enable businesses to create custom solutions that meet their specific needs.

Choosing the Best HRIS and Payroll Integration Option for Your Organization

When choosing the best HRIS and payroll integration option for your organization, it is essential to consider your specific needs and resources. Here are some key factors to consider:

  • Budget: Bundled solutions may be the most cost-effective option for small businesses, while custom integrations may be more suitable for larger businesses with more significant resources.
  • Scalability: Pre-built integrations and custom integrations are often more scalable than bundled solutions, making them better suited to businesses that are growing or have fluctuating HR and payroll needs.
  • Customization: A custom integration may be the best option if your organization has unique HR or payroll requirements, as it provides complete customization.
  • Technical expertise: Building a custom integration requires technical expertise, so businesses without in-house IT resources may prefer a pre-built integration or a bundled solution.

Future Outlook on HRIS and Payroll Integration Trends

As businesses increasingly rely on technology, the demand for HRIS and payroll integrations will likely grow. In the future, we expect to see a greater emphasis on automation, machine learning, and artificial intelligence in these systems, which will further improve accuracy, efficiency, and compliance. Additionally, cloud-based integrations will become more common, enabling businesses to access their HRIS and payroll data from anywhere with an internet connection. Lastly, pre-built integrations and bundled solutions will continue to be popular options for small businesses that need more resources to build custom integrations.

Choosing the best option for your organization can be challenging with many integration options. Consider all the options carefully and weigh the pros and cons before deciding. Ultimately, integrating HRIS and payroll systems is crucial to improving efficiency and accuracy in any organization. With the right approach, businesses can enjoy improved data accuracy, streamlined processes, and cost savings.

Conclusion

Integrating HRIS and payroll systems can bring significant benefits to businesses, including improved accuracy and efficiency in payroll processing, streamlined data management and reporting, and enhanced compliance and security. There are three ways to integrate these systems: through a bundled HRIS and payroll solution, a pre-built integration, or a custom integration. Businesses should consider their specific needs and resources when choosing the best integration option for their organization. We expect further improvements in HRIS and payroll integration solutions as technology evolves.

FAQs
What is an HRIS system, and why is it important for businesses?

An HRIS (Human Resource Information System) is software that helps businesses manage employee data, streamline HR processes, and improve overall efficiency. It's important because it centralizes employee information, simplifies HR tasks, and enhances data accuracy.

What is a payroll system, and why do businesses need it?

A payroll system is software that automates the process of calculating employee wages, taxes, and deductions. Businesses need it to ensure accurate and timely payment to employees, comply with tax regulations, and streamline payroll processes.

Why is integrating HRIS and payroll systems important for businesses?

Integrating HRIS and payroll systems can improve accuracy and efficiency in payroll processing, streamline data management and reporting, and enhance compliance and security by eliminating manual data entry and ensuring data consistency across systems.

What are the three ways to integrate HRIS with payroll systems?

The three ways to integrate HRIS with payroll systems are: 1) Buying a bundled HRIS and payroll solution, 2) Looking for systems with pre-built integrations, and 3) Building your own custom integration tailored to your business needs.

What are the pros and cons of buying a bundled HRIS and payroll solution?

Pros include streamlined implementation and training and reduced costs. Cons include limited flexibility and scalability as the business grows.

What are the pros and cons of using systems with pre-built integrations?

Pros include ease of use and scalability. Cons include limited customization and compatibility issues with certain systems.

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Meet the Author

Brett Ungashick
OutSail HRIS Advisor
Brett Ungashick, the friendly face behind OutSail, started his career at LinkedIn, selling HR software. This experience sparked an idea, leading him to create OutSail in 2018. Based in Denver, OutSail simplifies the HR software selection process, and Brett's hands-on approach has already helped over 1,000 companies, including SalesLoft, Hudl and DoorDash. He's a go-to guy for all things HR Tech, supporting companies in every industry and across 20+ countries. When he's not demystifying HR tech, you'll find Brett enjoying a round of golf or skiing down Colorado's slopes, always happy to chat about work or play.

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