Fully Integrated HR Systems: The Key to a Compliant, Connected Workplace

Linda Mougalian, VP, Product Management, ADP

Linda Mougalian, VP, Product Management, ADP

These days there’s an app for everything. Managing your grocery list, scanning and organizing files, even apps that connect with each other to give you a holistic view of your health profile, connecting the number of steps you take in a day with your overall calorie intake and workout regimen.

“Having all of your HR data reside in one place enables you to see a more holistic view of your workforce and identify potential gaps that can affect productivity”

But when you talk to HR professionals about the tools they use every day, you’ll likely find they work with various HR systems that don’t always talk to each other. According to a study of global human capital management (HCM) decision makers, companies on average have more than 31 HR applications and 33 payroll systems. As a result, many HR practitioners spend their time manually entering the same information into various systems and triple-checking data for accuracy.

While this has long been an issue for HR professionals, it’s become more of challenge as the regulatory landscape grows increasingly more complex.

The Legislative Catalyst for Connected HR Systems

For instance, annual reporting activities connected with the Affordable Care Act (ACA) require data to be captured, tracked and reported from a workforce management system of record in new ways. To meet these compliance requirements, companies may need to collect data from as many as four different systems–benefits, leave administration, payroll, and HR. It can be complex and time consuming to aggregate the entire employee data required to comply with the reporting requirements of the ACA.

If this data doesn’t live on a fully integrated suite of workforce management systems, HR leaders might need to access:

• The payroll system to verify how many hours an employee worked to determine their eligibility for the ACA.
• The benefits system to confirm what benefits packages were offered to that employee and determine whether they met the minimum criteria.
• The HR system to evaluate whether an employee is currently active or inactive in benefits.
Each system to extract and merge the data so it’s all in one place, and they can understand the employee’s status on a month-to-month basis.

Obviously, when the data which is needed to comply with payroll taxes, wage and hour laws and healthcare reform is separated into different silos, collecting the data and ensuring its accuracycan seem like a daunting task.

Adding to the compliance conundrum are new overtime rules that is currently set to take effect on December 1, 2016, which will make approximately 4.2 million more U.S. workers eligible for overtime pay. These rule changes affect wage and hour compliance for businesses of all sizes and could have a significant impact on labor costs.

With the possibility of such a large increase in the number of employees eligible for overtime, it’s now more important than ever for HR leaders to examine their time and labor management systems and evaluate whether they have the tools they need to simplify compliance and control costs. Integrating HR, payroll, and time and labor management solutions can help employers properly track employee classifications and hours worked, make better schedules and proactively monitor and manage overtime.

More than Integrated HCM: Creating a Connected Workplace Ecosystem

As payroll, human resources management, and talent management systems have evolved, most organizations have followed one of two paths: enlisting individual best-of-breed HR systems for performance, learning and recruitment, with separate payroll and benefits systems; or using a single fully integrated HR solution. In the current legislative environment, sentiment has started to shift toward fully integrated HR platforms.

Knowing that an integrated HCM system is the source of truth for all employee-related data makes the system very powerful. By feeding this HR data into all of your company’s other systems, it not only saves time, but it also reduces the room for error since the data is only entered once, making it more likely that it stays “clean.”

Other benefits of having a fully integrated HR platform include:

• Speeding the hiring process. A centralized HR system can improve the experience for both managers and candidates by automating job postings and resume screening. By transitioning all of the person’s information from the candidate poolto being a new hire, onboarding becomes almost seamless. According to the Bersin HR Factbook, companies that embrace an integrated-data approach to HR have a 38 percent higher employee retention rate, 40 percent higher employee engagement levels and roughly double the revenue per employee.

• Improving workforce performance. Having all of your HR data reside in one place enables you to see a more holistic view of your workforce and identify potential gaps that can affect productivity. By incorporating internal HR data with external data streams, HR leaders can gain insight into areas that might need attention. For example, if a company is suddenly experiencing high turnover, it can see how its retention rates compare to industry benchmarks, identify the main factors contributing to turnover, and predict which employees are at the highest risk of leaving in the future. With this knowledge, employers then can develop retention plans to keep their top talent happy and engaged.

An integrated HR suite can both help HR leaders better handle their company’s compliance challenges, and free up time for them to be more strategic partners to their top executives by chipping away at a mountain of administrative tasks. Armed with the organizational intelligence gained from data integration, HR leaders can shine by making better informed benefits, talent and compensation decisions–which help their company reach its full potential.

See Also: Manage HR Magazines

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