What’s the real reason for integrating HR and payroll?


2024/25 Payroll Legislation Guide

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We spend a lot of time talking about the benefits of combining HR and payroll in one clever, integrated system. We’ve got the integrated, cloud-based system to make it happen seamlessly. But when you get right down to brass tacks, what’s the value of integration?

Let’s take just one, small, simple example. Someone new is starting today. Payroll needs to get them on the system fast so that, come month end, they’ll get paid. But that can’t happen without information from HR.

Personal details, salary, tax code, perks and benefits, deductions: all of it needs feeding to payroll in a way that ensures the new employee is onboarded in a seamless way.

If your time in payroll or HR stretches back beyond the days of integration and automation, you’ll know how often that didn’t quite happen as planned. You’ll know how often a new starter would be stood at payroll’s desk on pay day wondering why they’d been paid less or taxed more than they were expecting. The reason was that information fell between the cracks. Paper systems were renowned for ensuring information don’t get to where it was needed as reliably as it should. The same was true for non-integrated electronic systems.

It was all resolvable, of course. But it usually meant putting things right in the next pay round, and that meant the new employee would spend their first few weeks wondering why it was so difficult to get this stuff right.

That’s just the situation with new starters. Multiply that across every other payroll function: pensions enrolment, annual pay increases, payslip generation, maternity, paternity and sick leave, implementing changes in the law and everything else, and the potential for error between HR and payroll was vast.

Single version of the truth

Automation and integration changed the landscape by ensuring everyone had access to the same pool of data: a single version of the truth. Update the national minimum wage for one person and you update it for all. Adding the Social Care Levy? Easy. Onboarding new team members? Now, everything they need is held in one place, in a standardised system that ensures everyone receives the same treatment.

And whether you’re in payroll, HR or an employee at your desk, when you look at the system, everyone sees the same thing.

More than process efficiency

It’s easy to think of integrated HR and payroll as a sort of intelligent upgrade on the days of copying and pasting information between Excel spreadsheets, but in truth it’s far more than a process efficiency boost.

It improves the accuracy of what your HR and payroll teams do, which reduces rework and its associated cost, and reduces the risk of errors causing employee frustration. It reduces the resource needed to manage payroll and HR. It ensures HR processes are carried out in a consistent way, reducing the risk of people management problems down the line when person A resents the fact that their onboarding/review/grievance was handled in a different way to person B.

The true value of integrating HR and payroll, then, isn’t just felt by HR and payroll. It’s felt by everyone, because things happen quicker, more easily, more accurately, more seamlessly. We tend not to talk too often about HR and payroll integration as an employee engagement tool, but it really is. As understanding of such benefits have developed, so the systems have too. You can add dedicated employee engagement modules that let you survey your people, gather their feedback and analyse the results.  

That’s not something clients looking at integrating HR and payroll usually think about at first instance, but when you have a single version of the truth, you can do far more with it than simply get the monthly pay right.

To find out how integration could help make a big difference to your business, talk to us now.

Picture of Chloe Walker
Chloe Walker
Chloe is Head of Marketing at the PSSG, leading the team across all our brands with her highly analytical, strategic and creative skill set. Outside of work, she loves spending time outdoors, running and cycling!