Pro's and Con's of Integrated vs. Standalone Payroll Systems
There are obvious reasons a system that integrates payroll with HRIS is a preferred option. They share the same base data so there is no conflicting data. There is less work keeping the systems in sync – no interfaces or files transfers to work on and keep track of. Ideally the system will be more efficient overall – only one system to train on, log into and repeatedly use for multiple purposes.
However, there are times when a standalone system could be preferred. If you already have an HRIS or low needs, this could free you up to find the best available payroll system in the market. Not all software vendors are experts at everything. Maybe your HRIS works well but that vendor’s payroll module does not meet your needs. Each module needs to be carefully evaluated and don’t assume because a payroll module exists, that is runs well and integrates well with your existing HRIS.
Another consideration is functional. If payroll is owned by Finance and not HR, there may be reasons why they might want to control their own system and not worry about HR, or vice versa. Of course, this would mean that data to be shared between the two systems would need a process to keep the systems in sync. The ability of systems to pass information back and forth is better than ever but still requires some additional work and worry.
Finally, you may not have a choice. The HR system may be working just fine but the Payroll system needs replacement because of regulatory or other pressing needs. There may not be enough money to replace both systems with one integrated system. So practical financial circumstances could dictate and limit your options.
Every company and circumstance is different and needs to be carefully considered as to what their unique viable options are. There is no one right choice.