A new study reveals that fragmented HR and payroll systems are undermining data accuracy and efficiency, prompting a shift toward better-optimized and more unified options.
In a business environment defined by speed, competition, and complexity, the tools organizations use to manage their workforce can make or break their path to success. At the heart of this issue is human capital management (HCM) software: an integrated suite designed to optimize HR processes from recruitment to retirement. However, a new Forrester Consulting study commissioned by Paycom reveals that many companies struggle to implement these tools effectively or fully realize their ROI, often because their systems aren’t built to function as a single unit.
The Fragmentation Problem
According to the nationwide survey of HR and payroll professionals, businesses rely on an average of just over six HCM providers to manage the employee life cycle. That’s more than half a dozen different platforms, each with its own database, login credentials, and functionality.
While each tool may offer specialized features, the patchwork approach presents a serious liability: data fragmentation.
This can result in widespread issues with workforce reporting and operational efficiency. In fact, 80% of respondents say disparate or duplicate data makes it difficult to create accurate reports and nearly four in five experience problems with workforce reporting due to inaccurate or inaccessible information.
These are alarming statistics for any organization aiming to be agile, compliant, and data-driven.
“Businesses with multiple HR platform solutions compromise data integrity and create a poor user experience for their employees,” said Chad Richison, Paycom founder and CEO. “Single-database software eliminates duplicative efforts and allows for standard processes to be automated and adopted throughout the system.”
Paycom’s single-database HCM solution directly addresses these challenges by eliminating data silos, enabling more accurate reporting, and streamlining the entire employee life cycle within one system.
Lost in Translation
Although many organizations invest in HCM technology and initially feel satisfied with their systems, they often discover that the technology is not fully aligned with their strategic goals.
According to the study, around one-third of HR professionals are focused on improving workforce analytics and reducing compliance risk over the next 12 to 24 months — two outcomes heavily reliant on data accuracy.
Yet here lies the contradiction: 77% of respondents store employee data across multiple databases, and 71% can’t transfer that data across platforms. That means HR teams are spending valuable time manually reconciling records, managing duplicate entries, and wrestling with systems that weren’t built to work together.
It’s no wonder that, despite all these tools, accuracy remains out of reach.
Paycom solves for this disconnect by enabling end-to-end automation within a single software, helping organizations align their technology with their long-term goals from day one — not years down the road.
The Case for Consolidation
There’s a clear appetite for change. An overwhelming 91% of respondents expressed interest in using a single HCM software built on one database because they understand that consolidation is as much about strategy as it is about simplification.
Eighty-five percent of respondents believe such a system would positively impact their goals, with improved data accuracy topping the list of expected benefits.
Only a true single-database solution like Paycom can offer a seamless flow of data and communication between tools, powering end-to-end automation for HR and payroll processes. This approach eliminates the need for multiple logins, reentering data, and juggling siloed systems, all while reducing security vulnerabilities and compliance risks.
Choosing the Right HCM Software
With so many vendors claiming to offer unified solutions, how can businesses cut through the noise?
First, be cautious of platforms that appear integrated but are really a patchwork of loosely connected tools. True single-database systems, like Paycom, are built from the ground up to operate as a single, cohesive unit.
Ease of use should be a top consideration, but don’t stop there. Companies should ask how the software aligns with their culture and business goals. Investigate its customer service reputation and audit readiness capabilities. After all, even the most advanced tool is only as useful as the support behind it.
An effective HCM strategy should do more than check boxes. It should drive tangible outcomes.
With Paycom, businesses can:
- Streamline the recruitment process by giving hiring managers tools to easily manage and track candidates.
- Identify skill gaps across teams, allowing for proactive talent development strategies.
- Improve employee retention by aligning staff development with career goals.
- Boost operational efficiency by eliminating manual processes and giving HR teams the bandwidth to focus on strategic initiatives.
Fragmented systems hinder each of these outcomes. By contrast, a unified HCM platform like Paycom can significantly enhance the employee experience while delivering the accuracy and efficiency that modern organizations require.
The Bottom Line
HCM is about technology, but more importantly, it’s about people. And when the systems intended to support a workforce are fragmented and misaligned, everyone feels the impact.
This Forrester study makes one thing clear: businesses using multiple HCM systems are limiting their potential.
For businesses today, where analytics drive decisions and compliance can’t be an afterthought, they need more than just tools. They need a unified solution like Paycom to empower companies to manage their workforce with confidence, accuracy, and clarity. Because when HR and payroll systems work together, the whole business moves forward.
