Jess works as a Sr. Compensation Analyst with over 8 years of HR experience. She holds a B.S. in Management and an M.S. in HR Development.
Integrating External Data into HRIS
This article provides a comprehensive overview of integrating external data into a core HRIS, the opportunities and challenges of this integration, and provides best practices to keep in mind when planning the integration. While this topic is applicable to all areas of HR and HR data, the primary focus of this article examines the integration of salary surveys and market data.
A Human Resources Information System (HRIS) is defined as a system of record for all human resource data. Effective HRIS provides organizations with the capability to manage the workflows of common HR activities such as recruiting, onboarding, benefits tracking, and reporting (Celergo.com, 2017). It is not uncommon that the various function of HR utilizes a specialized system to manage the day-to-day work of the function. Traditionally, organization purchase a core HRIS that serves as the foundational operating system and houses HR data such as employee:
- social security number
- position title
- FLSA status, etc.
Once the core system is established, organizations typically find the need to bolt on additional systems to accommodate the growing needs of the business. In a perfect world, the additional needs of the HR function can be met by purchasing and implementing modules of the core system. In some situations, the core system’s add-ons do not adequately support business processes. In these cases, a decision must be made to either change organizational processes, purchase a different software that will support the current business process, or to develop totally customized home-grown systems. Increasingly, HRIS experts are called upon to integrate various HR systems (Kavanagh and Johnson, 2018). In addition to system integration, HRIS experts may also be asked to integrate data elements into the system that assist organizational leaders in making decisions.
Integrated Information Systems
Kavanagh and Johnson (2015) define integrated information systems as “systems built on common platforms that permit single instance of data to be used in several applications and the seamless transfer of data between systems” (p. 165). Minimally, data integration involves linking the information in two systems but business need may call for more than two linkages. Integrations often involve linking transactional operations in one system that kick-off some action in the subsequent system. An example of this is an applicant tracking system (ATS) being linked to multiple systems. For the sake of the example, once a candidate is selected and confirmed, the ATS triggers entry into the payroll system which triggers entry into the time and attendance system and alerts the badging department that a new employee is starting and that a badge should be created so that the employee can swipe in and out on the time clock. In this example, data is seamlessly transferred without the need for additional human intervention beyond the initial trigger in the ATS. This type of workflow support relieves HR professionals of much of the transactional and administrative duties that had traditionally been a part of the HR function and provides HR with the ability to become strategic business partners and support organizational decision making.
By integrating systems and other data, HRIS experts have the potential to create and produce meaningful metrics and provide comprehensive decision support. By integrating compensation, labor market, and time to fill data for recruitment activity, HR may be able to identify actionable items to improve recruitment and/or compensation administration. To help illustrate this point, the following example is provided of nurse recruitment is provided:
...in comparison to times where the company’s compensation standard philosophy was used and the time to fill averaged 80 days. With this information, management may make the decision to change ABC Medical Center’s compensation philosophy as it pertains to nurses. In this simplistic example, data was extracted from the core HRIS, the ATS, and the labor market and used to make a decision that impacts the organization’s budget. Data integration gives the organization the ability to understand changing conditions and realize their impact over time—or immediately—to influence change.
Benefits of Data Integration
There are several reasons why an organization would choose to integrate outside data with the core HRIS. As explained in the example above, integrated data enables leaders to obtain just in time analytics as well as ad hoc reporting. By integrating the data sets, HRIS creates value in making available one-stop shop reporting capabilities. In the case of compensation planning, integrated systems can include merit guidelines based on location and within the appropriate salary range based on performance ratings. In this way, the data integration eliminates the need for managers to interpret a complex matrix and reduces the likelihood of errors based on manual calculations and interpretation of policies. Additionally, compensation planning that is not performed utilizing an integrated, real-time, system is time consuming and costly. In a 2002 HR self-service survey, the Cedar Group estimated that in North America, companies experienced a savings of $5.29 per average transaction with an automated compensation planning system (Wright, 2004). If this figure is true, even small and mid-size companies stand to gain from integrating data and automating the compensation planning to create this sort of manager self-service application.
Integrated HRIS also provides worry-free federal reporting compliance. For organizations who are required to report data annually, data gathering efforts can be tedious and time consuming. An integrated system that tracks required training, for example, could easily be manipulated to create standard Joint Commission reports. The same is true of EEO-1 and Vets-100 reporting. In addition to the planned compliance, integrated systems allow organizations to provide timely responses to auditors and to produce data to conduct self-audits. Integrating data from employee self-service Web-based platforms also increases efficiency and decreases errors by having employees submit their own data into the HRIS.
Challenges to Consider
Integrating outside data is not all positive and certainly brings along a set of challenges for an organization to consider. Integrating data and systems is costly and often times requires workarounds or patches to provide data that is useful for decision support. If an organization wishes to integrate a homegrown system with a vendor system or to integrate two or more vendor systems, and HRIS expert with technical knowledge of protocols and programming languages for sharing data between systems will be required (Kavanagh and Johnson, 2018). If this programmer is not currently a part of the organization’s staff, the HRIS leader will have to budget for the additional position. While highly integrative HRIS may provide greater efficiencies through the use of Applicant, Employee and Manager Self Service, some argue that these systems may transfer the work from HR to managers and employees, thus overloading line managers and line employees.This is said to have the long-term effect of decreasing overall productivity in organizations. Benefits systems may not be well received by employees who feel that they need additional support in making decisions (Stone, et al. 2015). Additionally, some employees may not be comfortable with using technology and may prefer paper forms to computer entry.
Another major challenge that should be considered is system flexibility - which is critical to the success of data integration. In the example of compensation automation, compensation plans change over time and the HRIS must be able to keep up with those changes. Changes could include eligibility, business rules (ex: minimum and maximum increase amounts), budgets, guidelines, access dates, calculations, and even screen presentations. The addition or removal of base pay components, bonus plans, or stock plans is needed to provide flexibility for typical program changes (Wright, 2004). Systems must also provide the flexibility that is necessary to accommodate changing compliance related needs as well. Compensation planning for exempt employees and non-exempt employees, for example, may follow different guidelines. Compensation data integration may also provide managers with flags to indicate potential compliance issues - for example, indicators for women and minority employees when their salaries fall below similarly qualified male and majority employees. This type of flag can be complicated to implement because it requires the system to pull data from several different systems (core HRIS, ATS, salary market data) , apply calculations (compa ratio based on hourly rate or annual salary depending on FLSA status), and output an indicator or flag to the manager based on the business’ definition of what constitutes an item requiring review (Wright 2004).
Best Practices to Integrate Data
Wright (2004) offers eight suggestions to observe when integrating data and using it to automate compensation planning. The suggestions are applicable across the HR functions and HRIS experts should be mindful of the recommendations.
- Plan thoroughly. Data integration should not be a last minute decision or afterthought. Data from all systems involved in the linkage must be mapped to ensure that the data sets are compatible for transfer.
- Functionality should be phased in over time. It is advised that organizations not try to do too much too fast. By implementing in phases, the organizations gives itself the opportunity to respond to challenges and redirect resources if needed.
- It is important to research and adhere to best practices that are industry specific. The needs of a medical facility would likely be vastly different from those of a manufacturer. There is no one-size-fits-all solution to data integration needs and HRIS experts should be aware of this when starting a project.
- HR should check the frequency of exceptions to business rules to determine if the newly integrated system should be configured to accommodate the exceptions.
- Organizations should consider the implications of calculations that are based on rounding. This tip is specific to compensation data but is important to consider. If figures are rounded, it may impact the budget in an unexpected way and disrupt budget projections. This seems like a small matter, however, over time, it could turn out to be costly.
- Validate the required data in the core HRIS and plan time to implement scheduled data cleansing if necessary.
- Wright emphasizes the need to test any system modifications before they go live. It is important that all possible scenarios are tested in the system to ensure that security is intact and that the integrated system is functioning as anticipated.
- And finally, the eighth recommendation is to plan change management communication. HRIS implementations are said to fail not because of hardware or software issues, but because of the change leader, and the people and organizational issues related to the change (Kavanagh and Johnson, 2015).
In conclusion, integrating outside data has several benefits. Data integration allows for better decision support and metrix. While efficiencies are eventually realized, there are initial costs associated with data integration that HRIS experts must account for. Additionally, some employees and managers may be resistant to utilizing the self-service functions that integrated data depend upon. If leaders apply effective change management methods and plan resources accordingly, data integration will likely have a positive impact on the HR function and the business overall.
HRIS Integration with Global Payroll - Four Keys to Success. (2017, October 06). Retrieved February 24, 2018, from http://celergo.com/hris-integration-global-payroll-success/
Kavanagh, M. J., & Johnson, R. D. (2018). Human Resource Information Systems (4th ed.). Los Angeles, CA: Sage.
Stone, D. L., Deadrick, D. L., Lukaszewski, K. M., & Johnson, R. (2015). The influence of technology on the future of human resource management. Human Resource Management Review, 25(Human Resource Management: Past, Present and Future - Volume 2), 216-231. doi:10.1016/j.hrmr.2015.01.002
Wright, A. (2004). Don't Settle for Less: Global Compensation Programs Need Global Compensation Tools. Employee Benefit Plan Review, 58(9), 14.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2018 Jess Newton
BradOpeterson on June 10, 2019:
Nice Article, Integration is really important in today’s world I came across a similar good article on collaboration and integration here: https://www.opshub.com/blogs/building-unified-agil...