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4 pitfalls of using multiple human resources information systems

ARTICLE | November 16, 2023

Authored by RSM US LLP

Whether you are looking for a new human resources/payroll system or making do with a legacy system for now, a “single source of truth” is more elusive and far less common than what you may hear from the vendor marketplace.

The reality is, “best-of-breed” point solutions offering specific capabilities to meet your unique and complex requirements are, in many cases, the superior (or only) choice -but maintaining multiple solutions requires extra effort to ensure consistent, accurate data across platforms.

Often stand-alone software handles one task really well, but that’s all. A best-of-breed, self-contained system might be perfect for your compensation management but has nothing to offer for recruitment or other talent management. A benefits administration solution manages your eligibility and open enrollment nuances like a dream. But that data must now be shared with payroll to generate deductions and consolidate information for Affordable Care Act reporting.

Here are the top four pitfalls facing companies that maintain multiple HR systems:

1. Putting your firm and employee data at risk

When you maintain different data elements across point solutions, your data is at risk of becoming corrupt or inconsistent. This leads to companies making high-level decisions based on inaccurate information.

2. Building workarounds to meet reporting requirements

A common complaint of HR departments with a lack of system integration is the difficulty of retrieving data from these information silos. Some systems are designed for data entry while others are ideal for report generation.

This means when you need to create a high-level report or analysis, you can’t call up one integrated, at-a-glance view. This makes it more difficult to analyze employee attrition rates, track performance between reviews, and make fully informed hiring and training decisions.

Instead, you’re compelled to use a workaround like spreadsheets, which costs time and money, creating a negative impact on your company’s bottom line.

3. Duplication in effort required to maintain multiple systems

When you have a system with a single point of entry while also maintaining another system, it’s tough to ascertain the timing of updates. When will you get around to updating the other system? How will someone else accessing information know if what they’re viewing is up-to-the-minute?

The result is lots of variance in the timing of updates, which could happen weekly, monthly, hourly—or every 10 minutes. You wind up with multiple systems that may or may not be accurate, depending on the last time they were refreshed. You might think the data is timely when it’s actually outdated.

4. Inconsistent coding across

Another potential complication of multiple systems is disparate coding. For example, you might have one job code in your HRIS and a different job code (for the same job!) in your point solution. This necessitates translation or mapping across systems to keep the data consistent.

Creating a comprehensive data map and solid process for updating appropriate values in analogous systems is the key to avoiding the potential pitfalls of using multiple systems.

Managing the reality of multiple systems

Some companies will only use multiple best-of-breed HR systems for one or more targeted functions, particularly time and attendance, benefits, recruiting, and talent. If you’re going to maintain multiple systems, it’s important to spend some time mapping out your end-to-end processes and take pains to design more streamlined data architecture.

As vendors update their core HRIS platforms or bring new platforms to market, they are embedding more of these individual functions into a single comprehensive system. A single system can reduce or eliminate data integration issues, but whether it is the right solution for you depends on your company's unique requirements.

RSM US LLP's human capital services team can provide new insights into your HRIS challenges. Our professionals can identify whether a new comprehensive solution is right for you or define ways to retrieve accurate data from your current information silos to improve your internal efficiencies. Furthermore, they can answer your questions about reporting and data entry challenges—and come up with a solution that adds value for your company.

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This article was written by RSM US LLP and originally appeared on 2023-11-16.
2022 RSM US LLP. All rights reserved.

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