The corporate structures of small businesses often include payroll and human resources divisions. While these two divisions are usually separate from one another, some small businesses may consider integrating human resources and payroll into one department, or at least consolidating the databases that each department uses. Deciding to integrate your human resources and payroll databases is not a “right” or “wrong” choice, but can benefit your small business for a variety of reasons.
Also Read: Professional in Human Resources (PHR)
One benefit of integrating human resources and payroll databases is that data can be inputted at certain times by a single worker, versus multiple times by different people in two separate departments. According to human resources website Check Point HR, when payroll and HR have more simplified data entry tasks, “companies have reported a drop of forty hours per week in administration duties,” since integration leads to more streamlined duties. The time savings allows more employees to focus on other tasks while they are on the clock.
An added benefit of integrating databases is consolidating information into one cohesive area for both payroll and human resources employees to access. Consolidated data could include employee vacation hours and sick days, payroll receipts, employee insurance updates and other benefits information. If you consolidate your databases and allow employees to log on to check their statuses, this could reduce your human resources and payroll division administration efforts up to 80 percent, according to Check Point HR.
Having more employees handle data input and other database management can increase the number of errors introduced into your administrative information. For example, if employees in payroll and human resources accidentally register the wrong information in the database, this can cause problems across both divisions. By unifying the data platform and assigning certain employees to register all data into the database, you can reduce the number of mistakes made by multiple departments.
Integrated reporting between human resources and payroll could lead to less paperwork. For example, separate employee information and benefits data may be redundant on multiple databases. By consolidating divisions, these databases become more streamlined, leading to less paperwork. This not only cuts down on costs, but it also cuts down on the potential of your small business making a mistake with paperwork since there is less to input and sift through.