Defining integration
At a basic level, integration is the movement of data from one system to another. For HR software, integrations apply to employee or company information, like names, Social Security numbers, addresses or benefits elections, among other data points.
This information needs to flow from the employee to the HR system to any other system that needs it, such as payroll, insurance carriers, and others.
Without an HR system, this information is still communicated from the employee to HR to third parties, it just occurs on paper, increasing the risk of manual entry errors.
Here are a few things to consider about HR integrations when evaluating the software.
Don’t get in the weeds
Often, software sales pitches will lean heavily on the “how” of integrations. It’s easy to get overwhelmed in comparing the alphabet soup of different integration options, such as application programming interface (API) or electronic data interchange (EDI).
But for the vast majority of HR teams, this much information isn’t necessary. Realistically, most HR administrators just want the software to work, and most systems use comparable integration methods.
Prioritize integrations by the importance
So how do you make sure it works? Not all HR integrations are of equal importance, and integration inquiries are best directed toward the most important integration needs your organization faces first.
There are two criteria to define an integration’s importance. The first is how much time you currently spend manually inputting the information into spreadsheets or other databases.
The second way to prioritize integration data is the risk associated with the error. In other words, what are the consequences if the information is not correct, either through manual-entry error or through the integration?
For most businesses, one key integration point is between benefits deductions and payroll. Below, we’ll dive deeper into why this integration matters so much.
Benefits and payroll
Benefit deduction errors can have ramifications that are more important than other errors. If a benefit deduction error goes unnoticed for months, there can be frustration when money needs to be recouped or refunded. The financial aspect of this makes this sort of error more serious than an employee’s phone number being incorrect in a given system, for example.
This is one reason why a benefits-centric HR platform often creates the best outcomes for small businesses. A platform with a robust benefits feature will likely have many payroll partners and may be supported by a benefits broker. Both of these factors minimize the risk of this sort of integration error for small businesses.
The above analysis can also be applied to other integration needs. Ultimately, consider which integrations are most important to your organization when evaluating HRIS functionality.
This column was originally published in HR Technologist.