All About HR & Payroll
If you have ever been a member of the workforce, you are likely very familiar with the roles that human resources (HR) and payroll both play in the lives of employees and business leaders. From time clocks and performance management to paychecks and tax preparations, the HR and payroll departments are tasked with managing the relationship between employers and employees. When you think about their responsibilities in this scope, it becomes a little easier to see just how crucial these two functional roles are to the success of any organization—and just how complex and varied their roles may have become as time has gone on. It is this complexity that has created the need for advanced business technology, including HR and payroll software, that can create increased efficiency, value, and positive work experiences.
What is HR software?
HR software, or human resources software, includes a number applications that businesses utilize to help HR professionals and employees perform at their very best. Businesses across the globe turn to HR software to boost productivity and overall employee satisfaction. If you have ever worked in an office, run a company, or owned your own business, you are most likely familiar with human resources software; although, you might know it by another name. HR software is often referred to as human resource management systems (HRMS), human capital management (HCM), or human resource information systems (HRIS). Despite the different names, each of these terms refers to the software a company utilizes to manage its workforce.
Because the field of human resources is so closely tied to our technological, socio-cultural, and economic views and laws, HR is constantly adjusting and evolving to adapt to what is going on in the world. New HR trends emerge each year in our day-to-lives, and organizations will continue to rely on the human resources department to alert and advise business leaders on these changes as they come along. Take, for example, the increasing number of professionals who now spend at least a portion of their time working remotely. As more and more employees expect to have the flexibility to work from home, organizations and their human resources departments much transform to meet this new need—creating new policies for scheduling and data privacy, offering mobile access to HR services, finding new ways to keep a mobile workforce engaged in their work, etc.
Working anywhere and at any time is not only trendy, job seekers are demanding it. Many, many employers will be able to accommodate these needs – we just need some guardrails like data security and slight mind shifts from managers to be successful.
Kate Bischoff, Employment Attorney and HR Consultant, tHRive Law & Consulting LLC
What is payroll software?
Payroll software is the technological solution of choice that organizations and payroll professionals use to manage, organize, and automate employee payments. Employee compensation can be a complex and tedious process considering the number of regulations organizations must abide by in addition to shear scope of the task for businesses with hundreds or thousands of employees. In fact, there are a number of payroll pitfalls that businesses small and large go to great lengths to avoid falling for.
Payroll software tackles the numerous challenges of this process by automating many calculations and compliance checks that would otherwise need to be performed manually. For example, processing payroll for employees in the United States can look very different from processing payroll for Canadian employees. With a best-in-class payroll solution, payroll professionals can configure their own payroll models and leverage innovative tools that automatically recommends the correct federal, state, and local payroll tax based on where an employee lives and works.
The benefits of a unified HR and payroll solution
Although HR and payroll software both allow businesses to cut down on manual tasks, making the mistake of keeping the two systems completely separate creates an entirely new pipeline of manual workflows. Because the two business processes are so closely related, they rely on much of the same data, such as employee names, addresses, job codes, and more. And in many cases, HR functions depend on payroll data, and payroll functions depend on HR data.
That would explain why many organizations make the decision to manage their HR and payroll data in a single system of record for truly unified HCM. Once HR and payroll become integrated into one system, companies frequently boast a number of benefits including increased efficiency, cost-savings, and newfound access to deeper insights into their workforce.
The combination of HR and payroll can yield extensive benefits on both sides of the equation.
- Benefits to Payroll: HR is probably the first department to be informed when an employee receives a promotion. The HR team springs into action, updating the employee record and making all the necessary changes within their HR software. But what about the payroll team? The promotion likely comes with a pay increase, but how will the payroll department find out about the promotion? Payroll won’t know to update the employee’s compensation unless their notified separately by that employee’s manager or a member of the HR team. The same concerns arise when an employee has a change of address, marital status, and even more.
- Benefits to HR: On the other side of the equation, HR departments miss out on the payroll data they need to make more strategic talent management decisions when the two systems are not connected. Employee engagement and employee experience are the metrics that every talent team wants to know about because it has proven to be a direct influencer of so many business performance outcomes. HR looks at a number of different factors that affect employee engagement, but without access to their employees’ payroll information, HR is missing a key piece of the employee engagement puzzle.
When HR and payroll are performed in one system of record, all of your people data is ready to be put to work. The insights you are able to collect from a complete set of data gives you the confidence you need to make the right decisions for your business and your people—without having to manually transfer any data.
HR and payroll software is designed to make both of those processes easier, so that you can focus on strategic decisions to propel your business forward. Combining HR and payroll in one unified HCM solution allows you to get the most value from your technology investment.
The technological future of integrated HCM
From the days of totally manual HR and payroll processes, the fields have each come a very long way, and the limits of HCM technology are constantly being pushed to the cutting edge. As we ushered in the “Fourth Industrial Revolution,” it became clear that the days of paper-based human capital management were truly numbered. As with most modern software applications, you can expect more and more HR and payroll functions to make their way into the cloud. In fact, a recent study showed that 75% of surveyed companies have at least one cloud-based HR process, and another 26% plan to move a core system to the cloud within the next three years. And as more and more organizations moved their data to the cloud, even newer technology, such as artificial intelligence (AI) would make a major impact on every business function—including human resources and payroll.
There are no right or wrong answers in how we best partner with technologies going forward. The goal should be to move forward together for the better of everyone involved.
Janine Truitt, Owner and Chief Innovations Officer, Talent Think Innovations LLC
While many professionals became concerned with how AI would replace their jobs, HR and payroll have been focused on how artificial intelligence will augment the work that they do—not replace. The introduction of AI and complementary technology, like machine learning, showed HR and payroll a world in which many of the tedious, manual tasks they had to perform on a regular basis would be removed from their to-do-lists. Instead, human resources professionals and payroll professional alike would be empowered to leverage artificial intelligence in a way that allowed the two departments to become more strategic in their roles, and serve their organizations in a more advisory capacity.
For example, employee engagement surveys have long been held as a standard business practice to measure and predict the health of a company’s workforce. The process required human resources teams to build surveys consisting of a number of questions, including (but not limited to) multiple choice, sliding scale, and open-ended questions. This was the first hurdle for HR to overcome. The truly difficult part of the employee engagement survey process is collecting the feedback and compiling it in a way that allows business leaders to gain insights that they can act on. As companies grow in size, this issue becomes exponentially more complex and time-consuming. But employee engagement surveys powered by artificial intelligence do the heavy lifting for HR and payroll teams—generating actionable insights regarding metrics that can range from feelings towards leadership, compensation fairness, and everything in between.
Building the case for unified HCM software
HR and payroll departments within an organization will likely be the first ones to recognize the need for a new solution to human capital management, but they often are not in a position to make the decision to invest in best-in-class HR and payroll technology. However, they are well-suited to build the business case for unified HCM.
Three first steps any HR or payroll can take to prepare a business case include:
- Describe the Need: If you are the one using the HR and payroll software, you are likely to be intimately familiar with the problems that exist with your current system. However, listing out each challenge will help you pose the problem in a more concise way to gain buy in from the decision-makers at your organization.
- Research and Recognition of Necessity: With your existing and projected challenges detailed, here is where you can identify the different solutions. As you do this, it’s important to define how each potential solution clearly addresses your largest challenges as well as the others.
- Assess Potential Impacts: Although the rollout of a new HR and payroll solution is intended to solve your problems, poor adoption by your workforce can create a new challenge. Think about what hurdles you may encounter ahead of time to ensure that your new unified HCM solution is well-received by those who will have to use it.
Making the shift to more strategic HR and payroll
The human resources and payroll departments hold a unique position within the overall structure of a company. They are each intermediaries between the employees and the employer—offering a number of services to employees, and simultaneously informing business leaders on workforce insights. As time goes on, new technology will begin to emerge that will likely reduce the amount of time HR and payroll professionals spend addressing individual employee needs.
“The future workforce is a blended one, with humans and machines working side by side.”
Cecile Alper-Leroux, VP of HCM Innovation, Ultimate Software
One of the latest technologies, HR Service Delivery, is already fulfilling the promise of creating a more efficient and enjoyable experience for employees by streamlining many processes that were traditionally performed manually. As those tasks fall to the wayside, HR and payroll will be in a position to focus their efforts on strategic decision-making. Payroll’s potential to create organizational changes that not only adds value but also reduces costs is well-documented. And HR’s close ties to key talent management metrics, such as employee engagement, allows the human resources department to become a powerful strategic arm for organization’s everywhere.
When both the human resources and payroll departments are freed from time-consuming, administrative overhead, each will gain a seat at the table to deliver powerful business insights that revolutionize the way we all work.
To see the full scope of how unified HR and payroll software can transform the way you work, visit our human capital management overview tour.
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