Should You Select HR Software That Has Payroll Capabilities? - HRIS Payroll Software
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Should You Select HR Software That Has Payroll Capabilities?

By: Dave Rietsema
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Until recently, outsourcing payroll was seen as the smart move for small to medium sized businesses. Outsourcing payroll helps to minimize errors, makes it easy to figure out deductions and withholdings, and makes compliance a snap. Doing payroll in-house didn’t have these advantages.

Now, however, HR software has gotten to a point where these payroll issues can be handled through an automated system. In many ways, payroll software is on par with outsourcing. If you are considering implementing HR software that has payroll capabilities, consider the following points.

Initial Costs of Switching

Implementing payroll software along with other HR software and making the switch from outsourcing payroll can be costly. The software itself will cost money, training people to use the system will cost money and time, and your business may need downtime to get the system up and running. These costs can add up, but may be quickly made up when the cost of monthly fees for outsourcing is saved.

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Ongoing Labor Costs

After payroll software has been installed, the system automates many aspects of payroll – but a human still needs to run it and check for errors. If there are errors or complications, it may sap labor time. This expense is ongoing and may add up if the system does not turn out to be compatible with the workplace.

Connectivity to Other Systems

HR software with payroll only works well if there are other systems that are directly connected to it, such as time and attendance tracking functions, salary management functions, and the employee information database. If it is easy or automatic to transfer information back and forth between these systems or features, payroll becomes simpler. If information transfer isn’t easy, payroll will be much more difficult.

Self-Service Functionality

Another consideration that may affect the prosperity of an in-house payroll system is whether or not the HR software has self-service functionality. If self service functionality isn’t available, HR may suddenly be inundated with employee requests for information after switching to doing payroll in-house.

With integrated self service functionality, employees can look up their own payroll information. This can act as further protection against errors, while saving HR time and increasing employee satisfaction.

Control of Information

When payroll is processed in-house, all information stays in-house. This allows employers and managers to access and make changes to information as needed. This also makes it possible to perform analytics on the information in the payroll system, cross-referencing with other integrated systems for more robust reporting and better decision making capabilities.

Whether payroll should be done in-house using software that is integrated with HR software or outsourced can vary depending on the company. Some companies may be better off with the greater control of information and the cost savings that in-house payroll can provide, while others may be better off letting professionals handle payroll.

If you are unsure whether your company would benefit from selecting HR software with payroll capabilities, HRIS vendor matching professionals may be able to help you make an informed decision.