HRIS Integration vs. Best-of-Breed Solutions: Why Specialized Software Might Be the Smarter Choice

HRIS software is an essential tool for managing core HR processes, such as payroll, employee data management, and compliance tracking. However, when it comes to specialized functions like compensation management, HRIS solutions often fall short, offering limited capabilities that can hinder the effectiveness of compensation strategies.

Many organizations initially try to leverage their HRIS systems for all HR-related tasks, including compensation management, only to discover that the built-in modules lack the depth and flexibility required for comprehensive compensation planning, analysis, and reporting. Instead of settling for a one-size-fits-all solution, companies should consider best-of-breed compensation software that complements their existing HRIS, offering advanced features and functionalities that address specific compensation challenges.

By integrating specialized compensation software with their HRIS, organizations can achieve a powerful synergy that leverages the strengths of both systems—streamlining HR operations while enhancing the precision and impact of their compensation strategies. In this article, we’ll explore why relying solely on your HRIS for compensation management might not be the best choice and how best-of-breed solutions can provide the targeted functionality needed to optimize your compensation programs.

HRIS overview - What does HRIS stand for?

HRIS stands for Human Resource Information System and refers to a software solution that collects, manages, and stores employee information.

HRIS software can streamline and automate various HR tasks, including recruiting, compensation management, onboarding, and absence management, to help organizations save time, reduce errors, and remain organized. 

However, HRIS software often comes with significant limitations, particularly when it comes to handling specialized functions like compensation management. While these systems excel at managing core HR processes, they are typically built with a broad, one-size-fits-all approach that lacks the depth and flexibility needed for nuanced areas like compensation planning and execution. As a result, organizations find themselves constrained by the generic features of their HRIS, forced to compromise on their compensation strategies or adapt their processes to fit the software’s limitations—neither of which is ideal. 

This lack of customization can lead to inefficient processes, reduced employee satisfaction, and ultimately, missed opportunities to attract, motivate, and retain top talent, all of which can negatively impact the business's overall performance and competitiveness. To truly meet the unique requirements of compensation management, a more specialized, best-of-breed solution is often the smarter choice.

HRIS integration 

To overcome some of the setbacks associated with HRIS software, organizations may choose to integrate it with other applications and systems. 

HRIS integration is the seamless connection of HRIS with other tools, such as payroll systems, performance management software, applicant tracking systems, and benefits administration systems. 

Such integration allows organizations to extend the functionality of their HRIS software and further support HR operations. But is HRIS integration the right solution for every organization?

Benefits of HRIS integration

HRIS integration can offer numerous benefits to organizations, including - 

• Centralized data management: Integrating HRIS software with other applications creates a unified approach to HR data management, where all vital information and data are in a single location. 
• Centralized data management through HRIS integration also facilitates more efficient data retrieval, enabling HR teams to generate in-depth and accurate reports without having to collect information from multiple systems.
• Simplified IT infrastructure: HRIS integration lowers the number of separate applications and databases that need to be maintained, reducing the complexity of system administration processes and minimizing IT support costs.
• Through this simplified IT infrastructure, managing software updates, security patches, and system backups will also be more straightforward and less time-consuming, as these tasks will be completed within a single system rather than needing to be spread across several applications.
• Improved HR efficiency: With an integrated approach, HR teams can access all necessary functions without needing to navigate between multiple systems and interfaces, leading to a more intuitive and faster workflow. 
• As a result, HR teams can prevent administrative delays and improve their responsiveness to employee and organizational needs by quickly retrieving and managing data to make informed and efficient decisions. 

Challenges of HRIS integration

Despite these benefits, there are several challenges and drawbacks associated with HRIS integration that organizations should consider before using this solution to manage employee data, such as:

• Limited flexibility: Integrated HRIS systems often come with predefined functionalities and workflows that may not fully accommodate every organization’s specific requirements. 
• Organizations are restricted from customizing systems, which can lead to inefficiencies that hinder their overall operations. 
• Increased complexity: HRIS integration can be complex and resource-intensive due to the need to ensure compatibility, manage data migration, and address potential technical issues across different systems. 
• Differences in system architecture and data structures can add further complications by requiring extensive configuration and testing to ensure that all components work together without issues during and after the integration process 
• Scalability issues: As organizations grow and evolve, their HRIS needs and HR-related priorities might change. Unfortunately, integrated HRIS systems might struggle to scale to accommodate increased amounts of data, additional users, or new functionalities. 
• These scalability limitations can lead to additional costs for system upgrades or the integration of additional software, disrupting operations and potentially delaying the organization’s ability to meet objectives. 

Best-of-breed solutions overview

Best-of-breed solutions refer to specialized software that excels in a specific function or process. These solutions are designed to offer advanced features and highly focused capabilities tailored to the unique needs of different organizations.

For example, performance management software focuses on managing and improving employee performance through features such as goal setting, feedback tracking, and coaching plans. Similarly, compensation management software is centered around salary planning, bonus management, and budgeting. 

With the specialization of best-of-breed software, is it a more viable solution for organizations seeking targeted features and enhancing HR efficiency?

Benefits of best-of-breed solutions

When it comes to compensation management and other HR functions, adopting best-of-breed solutions can provide considerable advantages over generic, all-in-one systems such as HRIS. Key benefits of best-of-breed solutions include: 

• Specialized functionality: Best-of-breed solutions are created with specific HR processes in mind, offering advanced capabilities that are often more refined and effective than those found in integrated HRIS systems. 
• Because these solutions are focused, organizations can handpick tools and applications based on their requirements and solve distinct use cases.
• Developers of these solutions, such as beqom, are experts in their respective fields, ensuring that the software and applications are optimized for exceptional performance with minimal limitations.
• Additional customization: With greater flexibility for customization, best-of-breed solutions enable organizations to tailor functionalities to their specific needs rather than being confined to a standardized approach that is common with HRIS solutions. 
• Increased customization opportunities and adaptability help ensure that the software suits the processes and requirements specific to each organization, resulting in greater effectiveness and a better alignment with organizational goals.
• Efficient integration: Best-of-breed solutions often have robust integration capabilities, allowing them to operate alongside other systems without compatibility issues or disrupted workflows. 
• With this modular approach, organizations can pick and choose between different tools, combine them to address all of their needs, and add additional software to scale alongside growth without needing to completely overhaul existing systems.

Challenges of best-of-breed solutions

Although best-of-breed solutions offer plenty of benefits for organizations, they can sometimes come with their own set of challenges, including;

• Higher costs: Implementing and maintaining multiple best-of-breed solutions can be more expensive than a unified HRIS. 
• Costs include separate licensing fees, integration expenses, and ongoing support or IT maintenance, as well as potential additional expenses such as training costs for employees to operate the software. 
• These costs have to be weighed against the benefits, which may include great efficiency and productivity, reduced errors, better alignment of workforce with business objectives, improved compliance, reduced risk, and better ability to accomplish talent objectives such as recruitment and retention goals.
• Inconsistent interfaces: Using multiple best-of-breed solutions can result in a disjointed user experience due to differing interfaces and workflows. 
• A lack of cohesion caused by using multiple best-of-breed software over HRIS solutions can create obstacles in user adoption, data management, and reporting, leading to mistakes and missed deadlines.
• To mitigate the challenges of inconsistent interfaces when using multiple best-of-breed solutions, focus on robust integration including single sign-on, consistent user training, centralized reporting, and a smooth user experience design to ensure seamless data flow and user adoption.

Choosing best-of-breed solutions

Best-of-breed software, with numerous advantages, sets itself as the optimal solution for most organizations. The use of this software still allows for human resource integration, as it is designed to complement existing HR processes by offering specialized functionalities

Unlike HRIS-integrated solutions, which provide a broad but often shallow range of features, best-of-breed solutions excel in their areas of focus and offer precision and accuracy in their abilities. 

These tools enable organizations to build a more effective and responsive HR technology stack for 2024 that is aligned with their strategic goals and is designed to enhance both employee experiences and operational efficiency.

The potential role of AI in best-of-breed approaches 

AI for Compensation Management is also being increasingly adopted by organizations to process data faster, provide real-time feedback, and add additional customization options for HR teams. 

The introduction and growing adoption of AI-powered management software shows that best-of-breed solutions are continuing to be innovated to improve their functionalities. 

As Gartner reports, almost 70% of HR leaders rate their organization’s HR functions as not effective at using data in workforce planning. With the adoption of AI compensation management software and similar AI-powered tools, HR teams could vastly improve their ability to leverage data, leading to better workforce planning and more strategic decision-making.

Best practices for best-of-breed or HRIS integration

Whether you follow the route of best-of-breed tools or HRIS integration, consider these best practices to ensure optimal outcomes for your organization - 

1. Clearly define goals 

Establish clear, measurable objectives for the integration of either best-of-breed or HRIS solutions. The first step of these objectives is determining what you aim to achieve with the integration, such as streamlining processes or increasing transparency in decisions.

2. Provide training for employees

Implement training programs to ensure that applicable employees are well-prepared to use the new integrated HR systems. For added support, organizations can offer user guides and other resources to help employees adjust to the changes and troubleshoot any issues they encounter, leading to smoother adoption of the software and minimizing disruptions.

3. Track and adapt 

Monitor the integration process closely to ensure that it is progressing as planned by regularly tracking KPIs (key performance indicators) and gathering feedback from users. Organizations should also be prepared to adapt their approach and potentially incorporate new solutions based on this feedback or to address any issues that arise.

Find the right solution for your organization

While HRIS integration can improve HR efficiency by centralizing essential functions, adopting a best-of-breed approach allows organizations to make targeted improvements to HR processes, increasing effectiveness while meeting specific objectives. 

With beqom, your organization can utilize advanced best-of-breed solutions that transform how your HR department oversees and manages compensation, performance, and other critical functions. Get in touch and explore beqom’s innovative software today and find out how it can enhance your organization’s operations with sophisticated solutions.