Fragmented HR Systems Cause Payroll Errors Costing U.S. Companies Millions

U.S. companies. Data stored across multiple unconnected platforms leads to repeated manual entry, inaccurate records, and duplicated processes. A nationwide survey by consulting firm EY found that a single input error in a traditional payroll system costs an average of $291. The same research showed that 20 percent of a company's annual payroll contains errors.

Consulting reported that 77 percent of organizations store employee data across multiple human capital management databases, averaging more than six providers. Seventy-one percent of those organizations said they cannot transfer or share employee data between the platforms.

Paycom president and chief client officer Shane Hadlock stated that stitching platforms together creates multiple logins, inaccurate data, and inefficient processes. He added that payroll is especially vulnerable because manual re-entry across disconnected systems increases the risk of incorrect employee pay and compliance violations.

The Kraft Group The Kraft Group, a Massachusetts-based company operating 20 businesses and employing 5,000 people, replaced its previous payroll provider after experiencing disjointed systems and manual processes. Senior director of HR operations Miranda MacKenzie said the change reduced payroll processing preparation time by 75 percent.

The company reported $5 million in savings calculated by Paycom's Direct Data Exchange methodology after consolidating employee information into a single software platform. MacKenzie stated that a single database allows the organization to track the employee life cycle in real time and generate insights for business decisions.

A Forrester Total Economic Impact study commissioned by Paycom projected a three-year return on investment of 362 percent for organizations using automated single-database HCM software. A Nucleus Research study commissioned by Paycom found productivity gains of up to 64 percent for companies using one integrated system.