For organizations both big and small, a Human Resource Information System (HRIS) or Human Capital Management System (HCM) is a critical part of daily HR operations. (For purposes of this discussion, we will assume that both terms – HRIS and HCM – mean the same thing: a system of record for all HR data, with capabilities to manage the workflow of the most common HR activities, such as recruiting, onboarding, benefits tracking and reporting. So HRIS integration will refer to both HRIS and HCM)
The trend among international employers is to implement their HRIS worldwide so that they can ensure compliance by gaining visibility to employment activities while spreading costs. To do this effectively, companies seek integration between the HRIS and the many supporting systems (like applicant tracking systems, payroll systems, benefit administration systems or the company’s ERP) that feed data to – or gain data from – the HRIS. Such integration improves data quality while eliminating manual and redundant tasks. But there exists a major gap in executing this strategy: most HRIS platforms are simply not built with multi-country payroll rules in mind. As a result, true HRIS integration – the kind where payroll data flows into and out of the HR system – becomes a huge challenge for international employers.
The good news: there are ways to bridge the gap between international payroll and your HRIS in order to get all the benefits. So, to ensure a smooth HRIS integration with your payrolls, follow these four steps for success.
This is the most important key. Many HRIS platforms have dedicated payroll features but typically focused on one, maybe two countries. On top of that, these systems are usually not built with a “payroll-first” way of operating. For instance, to do proper payroll calculations, non-recurring payments and deductions should carry a “begin date” and an “end date”, but most HR systems do not contain these fields outside of their single-country payroll module. These fields, therefore, need to be added to the HRIS if you are going to use the HRIS data to drive your payroll via integration.
Similarly, most HRIS platforms do not contain country-specific fields necessary to execute payroll in more than one or two countries. Here is a simple example of what we are talking about: in most of Latin America, there are variations in compensation norms, such as the “13th month” salary payment, which isn’t a requirement in Canada or the US. Without modification, a US-centric or Euro-centric HR platform will not necessarily pick up on this idiosyncrasy when tracking and supplying data to payroll. So it’s then up to the payroll provider or your team to ensure that the right data is requested and reported to ensure employees are paid properly. This will require manual work outside the HRIS. Another example: an employee’s religion is a required data point for processing payroll in Germany, but you would be hard-pressed to find this field in most HR platforms outside of that country.
The solution is to outfit the HRIS with these required fields and then map them to each specific country’s payroll system. You will need to develop as many integrations as you have local providers in different countries, unfortunately. This is one area where using a single outsourced payroll manager for many countries will make integration simpler because you should only need to create the one integration from your HRIS to your provider’s multi-country system. Some global payroll providers have pre-built integrations to the most popular HRIS/HCM platforms, meaning you can save time and money while also benefitting from their best practices.
If you are in the process of selecting an HRIS or HCM right now, great! You can ask all the right questions about payroll integration now before you buy. Find out how your candidate systems handle global payroll data, and as for how easy or hard, it is to build out your country-specific fields. Finally, ask if the system provider has any certified payroll partners and pre-built integrations you can tap into.
All HRIS integration relies on accurate inputs, which are typically the responsibility of the HR team and/or business managers. One of the primary reasons for inaccuracies in HRIS integration is bad data, which is almost always the result of human error. Prevent discrepancies by always checking data input for accuracy from at least two sources. Create a workflow for data checks to streamline the process and keep it consistent among operations. Such built-in audits at the beginning of the data chain will save time and headaches down the road when systems are exchanging the data to produce accurate pay.
Many HRIS platforms allow managers to process updates with batch changes. Employing this basic form of integration first will allow you to find and correct errors, inconsistencies and mismatches in your data before building fully-automated interfaces. Always do a test when you’re making bulk updates to find errors in processing. Bulk changes can be applied to tasks including adding new users or deleting users from payroll and exporting or importing user data for tax purposes.
This goes back to ensuring that your data is clean during HRIS integration. Because most payroll data must first come from a human being, and the humans doing the input tend to change over time, it makes sense to have good documentation and training. Create a standardized training process to keep all HR and business managers on the same page when it comes to entering employee HR and payroll data. When your team members are properly trained on the system, it can help minimize integration “data rejects” that lead to delays in the process.
If you have more questions about integrating your global payroll into your HRIS system, contact our team of international payroll experts. We have knowledge on all aspects of global payroll from our relevant experience and expertise. Contact us today to learn how we can help you!
**This article is for informational purposes only. It is not intended to constitute legal advice.