Your guide to understanding cloud-based HR and payroll software
Regardless of company size, there are two functions that are crucial to business success: human resources (HR) and payroll. When it comes to attracting and retaining top talent and ensuring your business remains compliant, these are two areas you’ll want to get right.
In order to navigate the increasing complexities of HR and payroll, many businesses are turning to integrated HR and payroll systems. These solutions centralize employee data to automate time-consuming, manual processes, and improve business effectiveness, precision, and security in the process.
To better understand these solutions and why an increasing number of businesses are partnering with them, this article shares what comprehensive HR and payroll services are, as well as the three most common solutions and their benefits. Whether you are a small startup or a large enterprise, here’s how cloud-based HR and payroll software can help your business manage and make the best of its personnel and finance data.
What are integrated HR and payroll systems?
HR and payroll software aims to streamline and automate various business functions via specialized tools and applications. This software solution helps simplify workforce-related tasks to enhance efficiency, accuracy, and compliance, while freeing up employee time to focus on more strategic business initiatives.
Before we explore how these two workplace functions go together, let’s first look at them separately:
- Payroll: Payroll not only pays employees accurately and on time but also ensures business adherence to local, state, and federal tax requirements.
- Human resources: Human resources enhances employee performance and well-being through a range of workplace practices, like recruitment, onboarding, annual reviews, labor compliance, and benefits administration.
While they might seem very different, payroll and HR responsibilities overlap quite a bit. Functions like employee hiring and termination, benefits, time and attendance, and leave — all traditionally handled by HR — directly influence payroll. To streamline and enhance these processes, an increasing number of companies are adopting cloud-based HR and payroll software. In fact, the HR payroll software market is expected to grow to an impressive $15.4 billion by 2030.
Why are so many businesses turning to these joint solutions? An integrated HR and payroll system facilitates the seamless flow of people data across systems, allowing organizations to save time, money, and resources. We’ll share more about these benefits later on.
It’s important to note that comprehensive HR and payroll services are not meant to replace essential HR and finance employees. Rather, they’re designed to simplify HR and payroll-related tasks and responsibilities, freeing up employees’ time to focus on strategic and high-impact projects rather than completing basic tasks like filling out forms, manually updating data, and more.
The 3 types of cloud-based HR and payroll software
When it comes to choosing HR and payroll software, you have three main options: a human resources information system, human resources management system, or human capital management. While each of these systems can help your business manage payroll and optimize your people strategy, they can also help your organization achieve even more.
To help you make the right choice, here’s a closer look at the three common types of HR and payroll software, so you can identify which best fits your business’ needs:
Human resources information system (HRIS)
A human resources information system is perfect for small businesses. It can help with all your core HR needs, like housing employee data, administering benefits, managing employee leave, and, of course, processing payroll. By storing all of your employee information digitally in individual profiles, this solution makes it easy for information to flow seamlessly from your benefits and time and attendance tools directly to payroll for seamless, accurate, and timely payments with less human intervention needed.
Human resources management system (HRMS)
A strong match for growing small to mid-sized businesses, a human resource management system offers even more features than an HRIS, including additional tools like performance management, learning and development, onboarding, and more, in addition to core HR functionality. An HRMS centralizes all HR, payroll, and employee data in one place, helping HR and payroll teams make more data-driven decisions and auto-sync data across tools to reduce manual tasks and improve data accuracy.
Human capital management (HCM)
Human capital management is the most robust of these three software options. Typically used by enterprise-level businesses, HCMs can help with core HR tasks and payroll, but are also designed to help organizations get the most out of their people.
In addition to the features of an HRIS or HRMS, HCMs also offer tools to support succession planning, workforce management and optimization, business intelligence, and more. If your business is looking for a more robust people-management platform that does more than just payroll, a human capital management solution may be a good fit for your needs. Check out our Human Capital Management Buyer’s Guide for tips on how to find the best HCM solution for your organization.
Looking for a more detailed breakdown of how these three cloud-based HR and payroll software solutions differ? Check out our blog post, HRIS, HRMS, HCM: What's the Difference?, for a deeper understanding of how a full-suite solution can benefit your organization.
The benefits of unified HR and payroll systems
From streamlined processes to cost savings, here’s a closer look at how adopting an integrated HR and payroll system can revolutionize the way your business operates—and how your HR and payroll teams achieve success.
Reduce errors
Implementing a unified HR and payroll system can greatly reduce manual data-entry errors. By seamlessly integrating time and attendance data, benefits deductions, and employee information directly into your payroll system, your organization can minimize the likelihood of inaccuracies, ensuring precise and error-free payroll processing.
Improve efficiency
Automation plays a pivotal role in improving operational efficiency. Integrated HR and payroll systems can automate mundane and time-consuming tasks, like manual data entry, allowing employees to reclaim valuable time in their workday. This not only gives employees more meaningful work, but enhances overall organizational productivity.
Drive better decision making
By centralizing your company's people data, integrated HR and payroll systems can unlock a holistic view of your workforce for your team. With access to accurate and real-time data, your business can make more informed and strategic decisions around workforce planning, resource allocation, and overall business strategy.
Empower employee self-service
With a platform that prioritizes ease of use and user experience, employees can easily self-serve. From checking past paychecks to updating personal information to submitting leave requests, your employees can feel empowered to answer their own questions without reaching out to your HR and payroll teams. This can save your internal teams valuable time and resources by reducing the number of employee issues and support tickets they need to address.
Pull detailed reports
Most HR and payroll systems also come with robust reporting dashboards, whether via predefined or custom reports. With key information right at their fingertips, your HR and payroll teams can easily track expenses, workforce trends, and other HR metrics in a matter of seconds. These dashboards and reports can then empower them to make informed decisions around budgeting, workforce planning, and more.
Ensure scalability
With the right technology solution, your business will experience the support and flexibility it needs to grow. Since you’re not limited by internal headcount and expertise, you can simply add or subtract features and services as your business needs grow or contract. This can greatly reduce the burden on your internal teams while increasing the agility of your organization should you experience a significant change in headcount via a hiring spree, layoff, merger, or acquisition.
Keep employee data secure
Employee information must be kept safe. While locked filing cabinets are secure, they lack the flexibility and efficiency a cloud-based solution offers. Luckily, HR and payroll vendors provide a secure environment for managing and storing employee data, mitigating the risks associated with data breaches and unauthorized access. Not only do they guarantee compliance with privacy regulations, they also cultivate trust among employees by safeguarding their personal and financial information.
14 essential HR payroll software features
Ready to kick off your search for an HR and payroll solution? Here are a few key features and considerations to look out for during the evaluation process:
General
- Integrations: HR systems work better together. Be sure to verify that a prospective HR and payroll vendor can easily and seamlessly integrate with any existing solutions in your company’s technology stack. For example, you might want your payroll provider to integrate with your accounting software. This ensures vital information can flow smoothly between all of your systems, so your business can get the most out of your technology and enhance operational efficiency.
- User interface: Don’t forget to consider your end user. Investing in an expensive solution won’t do your business much good if no one wants to use it. During the evaluation process, ask if the company offers a free trial or demo account you can use to get a feel for how administrators and employees will use the tool. Bonus points if the vendor also offers an easy-to-use mobile app for employees to access on the go!
- Data security: You’ll want to choose an HR and payroll software that puts security first, so look into what security measures a vendor has in place before signing a contract.
- International support: Depending on your company needs, be sure to ask if a vendor can support a global workforce and comply with local, state, and federal labor and tax laws in the countries you currently operate in—or have plans to operate in the future.
- Customer service: Issues always arise during the least convenient times. Make sure your partner offers responsive and knowledgeable customer support with 24/7 accessibility, so you can get the help you need when you need it.
HR
- Employee data management: While this is basic functionality for most HR and payroll platforms, you’ll still want to get a feel for how the solution centralizes and organizes employee information so you can understand how it can give your business visibility into your workforce.
- Performance management: See if the tool offers features like employee performance evaluations, goal setting, and giving and receiving feedback to enhance employee productivity and motivation.
- Employee onboarding: If you plan on hiring, ask if your software partner offers any tools to support employee onboarding, like benefits enrollment, new hire surveys, training programs, and more.
- Learning and development: Some software solutions include tools for training and professional development, allowing organizations to invest in employee career growth and engagement.
- Reporting and analytics: Most HR and payroll providers offer robust data and analytics dashboards and reporting to support data-driven decision-making.
Payroll
- Direct deposit and payment options: You’ll want to choose a payroll provider that offers multiple payment methods, so your employees can get paid however they prefer. That might be via direct deposit, with physical paper checks, or by payroll card.
- Time and attendance tracking: By integrating with time-tracking systems, your payroll software can automate payroll calculations based on actual hours worked.
- Benefits administration: Seamless integration between your payroll solution and benefits platform ensures employee deductions for benefits and retirement accounts are accurate and compliant.
- Tax compliance: You’ll also want to ensure your payroll solution can accurately submit your local, state, and federal payroll taxes on your behalf. Compliance mistakes can be costly, so you’ll want to choose a partner with a proven track record of success.
Combine HR and payroll with UKG
With the right cloud-based HR and payroll software solution, your business can pay employees accurately, increase workplace efficiency, remain compliant, and achieve so much more. UKG’s all-in-one HRMS solution. UKG Ready®. goes beyond accurate payroll processing; it redefines workforce management, seamlessly integrating all of your essential HR, payroll, time, and benefits functions.
From ensuring precise payroll processing to simplifying workforce management, UKG Ready empowers small to mid-sized businesses to build better workplaces for their employees. Watch a product tour of UKG Ready today and see for yourself how it can empower your business to navigate the complexities of people management with ease.
