Human resources (HR) software is a common topic of discussion when I speak with the upper echelons of management at small and medium-sized businesses. Management of employees is at the heart of these discussions. Most companies only utilise payroll software when it comes to HR systems.
Typically, they have employee data scattered across many systems, such as their payroll software, spreadsheets, physical papers, emails, and a shared folder.
Payroll systems may differ in a number of ways.
To get started, let’s try to define exactly what it is that a payroll program does. According to Wikipedia, the following actions and procedures constitute payroll automation:
Compensation for work performed, including withholding and distribution of tax payments and stock to employees.
Compiling information for use in reports
Few people in the accounting or human resources department are usually in charge of the payroll system, and employee access is usually not included.
Because hrms is accessible by all employees, it is essential that the program be built with security and access controls (who can view what) as well as usability in mind.
When did payroll start doing double-duty as an HRIS?
Every business needs a reliable payroll processing service. They did this by acquiring payroll software from companies that focus on such services.
As part of the payroll process, the companies provided information such as new and departing employees, address and dependent changes, time cards, benefits, and anything else that may affect the calculation of wages or withholdings.
Since it was time-consuming to keep track of all of this information, payroll companies added more features, and payroll software also served as an HRIS.
Client issues that occur from using payroll software for human resource management
A small number of administrative staff members were tasked with using Payroll initially. These individuals have prior knowledge of compliance norms and hence required little training to use the software.
There was little usability testing, no attention paid to security, and no workflows built into the system. In order to keep up with the ever-evolving needs of the industry, the payroll software has undergone several updates to include all of these features.
Employees now expect the most cutting-edge and interesting user interfaces, along with mobile availability and interactive features. They see the modern payroll programme as if it were from another era since it lacks any novelty for them. Workers usually only utilise these sorts of platforms when they “have to,” leading to low levels of engagement and productivity.
The reporting and analytics features of the HRMS are clumsy and non-intuitive, which frustrates managers who should be employing the HRMS for critical decisions pertaining to personnel. Due to these limitations, employees often resort to using excel sheets as their main means of making crucial decisions, and key staff development and engagement initiatives are typically placed on hold. As a human resource management system (HRMS), Payroll is often disliked by its users.
What plan of action will be taken next?
Payroll processing is only one part of the much broader duty of managing employee information. There was once a time when your only option was to let payroll software manage employee information, but things have changed.