In the Human Capital Management (HCM) corner, Eric Villaverde. In the Payroll corner, Chris Klein. And the fight is on.

Chris starts with a jab:

“The payroll function is of the utmost importance to employees and is one of, if not the largest, expenses most employers have, so making sure it’s modern and compliant is critical to the enterprise. A well-implemented multi-country payroll system makes the objective of timely and accurate salary payout far easier to obtain than manual processes and dated payroll systems. These are some of the first reasons why starting with a payroll system is preferable because it tackles a critical need and improves employee satisfaction.”

Eric responds with a hook:

“If you start with payroll and leave HCM for later, the integration between the systems will likely be very complex and full of issues. You’re likely to have compatibility problems with different data formats, not to mention the adage of garbage in, garbage out! Without a proper standardization of HR data and consistent processes for a global system of record, payroll accuracy is doomed!”

Eric continues to press:

“The employee data in HCM systems is normally larger and more diverse than the data needed for payroll processing. When you start with the HCM system, you ensure that the employee data is properly organized and collected, making it easier to integrate payroll later on.”

Chris comes back with:

“A robust HCM system offers invaluable insights, placing companies ahead of competitors. But the reality is many organizations lack consistent HR data and systems. HR generalists often focus on day-to-day tasks rather than strategic HR decisions, leading to disparities between global HR visions and local needs. This divergence and local laws and cultures can delay implementations, pushing payroll further out.

Organizations facing intricate tax laws and labor requirements in different countries urgently need a modern payroll system for compliance and risk mitigation. Simply put, payroll operates on rules and math, while HR revolves around policy and emotion. Prioritizing payroll ensures timely progress, even as HR debates its future direction.”

Chris lets loose some more punches:

“Put another way, a payroll-first strategy also allows for incremental expansion, enabling quick wins right from the start in easier, less complex countries or regions. Doing it gradually also shields key users and stakeholders from being overwhelmed and burned out with an excessively complex multi-country implementation project. And finally, an incremental strategy supports much better management of the change, allowing communication to focus on successes and rendering the learning more simple and manageable.”

Cornered, Eric tries to defend HCM:

“I concede all that. Nevertheless, we should also consider the overall Employee Experience and Satisfaction. By implementing an HCM system, first, you address issues with the employee experience by delivering portals, services, access to opportunities, more visible and accessible communication channels, and the possibility of retrieving important data effectively. The employees begin to perceive their employers as up-to-date and focused on enhancing their experience as collaborators and important parts of the teams.” The labor market is getting tighter, and the gap between generations is more visible than ever before. What older generations think is essential can vastly differ from younger ones. HR needs to address this in modern ways that satisfy both if employee retention will be had. Some wise companies put employees first because happy employees unquestionably lead to happy customers. All employees know they will get a payslip, but they want their employment engagement to be excellent, leading to it.”

The bell rings, ending the match!

The judges weigh the compelling arguments from both sides, a display of passionate debate where neither seemed to emerge in perfect harmony. True synchronized integration of HCM and payroll is like hunting for a unicorn—achievable only with the right blend of time, resources, and alignment throughout an organization.

Their final decision? “It depends!” The audience’s disappointment is palpable, many having hoped for a clear-cut solution. Shouts of “The fight was fixed!” erupt.

Indeed, there’s no universal answer. Every organization’s journey is unique, influenced by available resources, current challenges, contract timelines, provider satisfaction, and countless other factors.

But rest assured, with diligent exploration and transparency, the right path for your organization awaits discovery.

Chris: “Pffft, I still say payroll first is always the way to go. HR always ends up delaying everything.”

Eric: “I’ve seen the same, but sometimes the wait is worth it.”

Is your organization struggling with this decision or have you already made it and are in the ring swinging?  Either way, call The HCM People at Spencer Thomas Group to have the right people in your corner.