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.
Call us at +1 213.873.1700, email us at firstname.lastname@example.org or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by RSM US LLP and originally appeared on 2023-11-16.
2022 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Vasquez & Company LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Vasquez & Company LLP can assist you, please call +1 213.873.1700.
Subscribe to receive important updates from our Insights and Resources.