The Ultimate Guide to HRIS Integrations (Updated for 2024)

January 5, 2024
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Table of Contents

Building HRIS integrations? Read this article to learn different integration strategies, use cases, potential issues, and of course, the solutions.

HRIS integrations are crucial for streamlining essential HR functions such as employee onboarding, performance management, benefits administration, compliance, etc. They also support broader business operations like accounting and enterprise resource planning (ERP).

Integrating operational tools with HRIS systems can eliminate the need for employers to switch between different applications. It also boosts the adoption of new SaaS tools and minimizes manual data entry errors.

In this article, we will explore what HRIS integrations entail, discuss popular use cases, and examine both the challenges and benefits associated with them. We will also touch upon the common methods for building and maintaining these integrations.

Additionally, we'll introduce how Finch allows you to unlock integrations with 200+ HR and payroll systems using just one API. Tools like Finch are especially valuable when dealing with the complexity of building three or more HRIS integrations.

What are HRIS Integrations?

Today, an average-sized organization utilizes 6-8 HR applications. This requires employees to spend significant time keeping their employment tech stacks up-to-date. Based on our research of 1000+ HR professionals, seven in ten HR admins (68%) say they routinely switch between different employment systems throughout the day. Half (51%) admit doing so leaves them feeling overwhelmed, stressed, annoyed, frustrated, or angry. 

HRIS integrations facilitate seamless data exchange between the primary HRIS (housing employment records) and other software applications. This means that any changes made in one system will automatically appear in another, and actions in one application can trigger workflows in another. This reduces the need for employees to switch between apps frequently.

Types of HRIS integrations

HRIS integrations fall into two main categories based on their purpose. 

  • They can be customer-facing and connect your application with a third-party HRIS used by your customers. Employers can authorize your tool to exchange data with their HR systems. For example, whenever a new employee joins an organization, a sequence of onboarding activities must be completed—from enrolling their details into payroll and benefits systems to completing onboarding training and providing access to key business tools. With HRIS integrations, all of these can be automated. 
  • Alternatively, HR integrations can be developed for internal use within an employer’s org. This facilitates seamless data sharing with business tools like ERP, accounting, or communication systems. It reduces unnecessary app-hopping for employees and HR managers. For example, you can integrate your HRIS or HCM system with Slack to send automated reminders.

Top HRIS Integrations

HR and payroll represent one of the most fragmented markets in the United States, boasting nearly 6,000 providers processing around $3 trillion in payroll annually for SMBs alone!

Adding to the complexity, the functionalities of HR systems vary widely among different providers. Some offer only HRIS or employee directories, while others provide a comprehensive suite encompassing HRIS, payroll, benefits, and collaboration tools.

SMB market share of top HRIS and payroll software

As of 2023, Quickbooks, ADP Run, and Paychex Flex collectively hold over 40% of SMB payroll  market share. However, newer tools like Gusto, Zenefits, and BambooHR leverage innovation and integrations to offer diverse HR, payroll, and benefits solutions to SMB employers through a single platform.

Note: Given the abundance of HR and payroll providers, it's essential for any company serving the SMB market to integrate with as many HR providers as possible. 

Building a few integrations with the top five or ten HRIS may cover a decent portion of your customer base, but to serve the remaining half or tap into new regions and industries, you would need to build hundreds of other HRIS integrations. Needless to say, this is tremendously time and resource-intensive. 

To address this coverage challenge, many employment tech companies seek solutions to streamline the development and management of HRIS integrations. If you're developing a solution that requires access to employment data from multiple sources, Finch’s Unified Employment API can unlock hundreds of HRIS integrations in as little as 3 days. Contact us.

Now, let's explore some common use cases of HRIS integrations.

Common HRIS Integration Use Cases

Payroll

Integrating an employer's HRIS with a payroll provider is the most efficient approach to handling payroll functions efficiently. Especially when an employer’s HRIS does not include a payroll module. This integration automates tasks such as setting up new employee payroll, tracking tax regulations, and managing benefits deductions based on employee directory data. 

401(k) and retirement plan providers

Providers of 401(k) plans, record keepers, or third-party administrators can integrate with an employer's HRIS and payroll systems. This integration streamlines auto-enrollment to retirement plans, facilitates seamless deductions management and yearly recordkeeping audits.

Benefits administration

If an HRIS lacks benefits administration features, employers can connect with a benefits administration tool to automate employee enrollment, modifications, and cancellations. Learn more.

Talent acquisition tools

Recruitment tools, like applicant tracking systems (ATS) or background verification tools, often collaborate with HRIS’s to offer all-in-one talent acquisition solutions. This enables employers to manage recruitment tasks from a single platform. For instance, when a candidate's status changes to "Hired" in the ATS, HRIS integrations can automatically create the employee profile and trigger onboarding functions.

Compliance and security

Compliance tools can use employee census details (job title, department, employment status, etc.) to build security training programs, auto-enroll employees, send periodic reminders, and update results directly to the HRIS, ensuring increased participation.

Also read: How Secureframe used HRIS integrations to simplify compliance for thousands of employers.

User provisioning & de-provisioning

Tools like compliance, expense management, employee recognition, and identity management must stay updated with the latest employment details for accurate employee access. HR integrations ensure accurate access to employee records, making it easy to grant or remove user access to essential tools. This maintains compliance and reduces the risk of data leaks.

Employee onboarding & offboarding

As soon as an employee joins, a series of onboarding workflows ensure that employees have access to all the equipment, software, and documents they need to get started on their first day at work. Effective employee onboarding also includes company orientation, training, and in some cases, specific certification processes. HRIS integrations automate these workflows by swiftly capturing employee details, eliminating the need for manual ticket generation. The same automated efficiency applies to the triggering of offboarding workflows.

Read: How tools like Trainual simplified employee onboarding with HRIS integrations

Time tracking and leave management

Time tracking and leave management applications use HRIS integrations to automate hours worked and time off updates based on employee census data. This reduces HR admin workload by eliminating manual data syncs.

Employee engagement and performance management

Integrating workforce management solutions with HRIS’s creates a centralized platform for daily tasks and performance management. For instance, HRIS integrations help employee engagement and performance management tools to track employment information like employee roles, organizational structure, manager information and use them to trigger relevant workflows.

Read: How employee rewards tool PerkUp launched HRIS integrations in a sprint.

Personalized employee learning

Integrating learning management systems (LMS’s) with HRIS’s simplifies managing the professional development of employees. Customizing their learning experience based on employee data, such as role, department, and manager details, facilitates skill gap identification and discovery of training needs. Moreover, completion reports are automatically sent back to HRIS, allowing employers to stay informed about employee learning without manual effort. For example, with an LMS-HR integration, employees can be auto-enrolled in role-based learning programs following role changes or promotions.

Internal use cases of HRIS integrations

  • Communication and collaboration tools: HR integrations with communication and collaboration tools like Slack. Microsoft Teams, Zoom, Dropbox, etc., can streamline organizational communication, such as quick announcements, file sharing, and other important team updates. 
  • ERP: Organizations often build HRIS integrations with their enterprise resource planning (ERP) tools to share employee census data with other business tools like finance, operations, and accounting systems. This facilitates collaboration between different business units. For example, with integrated systems, HR and accounting teams can access real-time data. This allows for quick and accurate reporting on financial metrics related to payroll, expenses, and budgeting. Some external ERP or accounting tool offer HRIS integration for this purpose. 

Read: How accounting software Rillet leveraged HRIS integrations for better employer experience.

How to Build HRIS Integrations?

The most effective approach to building HRIS integrations depends on the number of integrations needed, the purpose of integration, scalability needs, engineering bandwidth, and budget. Common HRIS integration methods used by SaaS tools include:

Custom API integrations

Application programming interfaces or APIs serve as connectors for seamlessly exchanging information between different software tools. Custom-built API integrations simplify setting up automated triggers for custom HR workflows. APIs offer greater flexibility, personalization, and customization of the end-user experience. However, each integration requires significant development and partnership efforts, creating scalability issues. Moreover, any API changes require updates to HRIS integrations, adding complexity and fragility to this approach.

Unified APIs

In recent years, new solutions like unified APIs have been developed to meet the demand for scalable API integrations. Unified APIs consolidate APIs of applications within a specific software category. This enables developers to connect with multiple platforms simultaneously. Also, these APIs standardize data from different applications into a common format, making it more accessible to developers.

For instance, Finch’s unified employment API simplifies integration with 200+ HRIS and payroll providers through one integration. Managing a single integration with Finch may prove to be the quickest and most cost-effective method for scaling HRIS integrations.

Native integrations

Some HRIS tools form partnerships with vendors to offer native integrations. However, these integrations are often limited in number, and the level of customer service may not be satisfactory. Additionally, accessing these integrations may involve extra fees.

iPaaS solutions

Integration platform as a service (iPaaS) solutions help companies integrate HRIS platforms into their applications, streamline workflows, and facilitate data synchronization. iPaaS is a fairly low-code solution suitable for organizations with limited tech resources. But the process can be slow and challenging to scale. Plus, they are often tailored for specific use cases. If your needs do not perfectly match, this approach can be very limiting. 

Point-to-point integrations

Point-to-point HRIS integrations, while cost-effective, are the least efficient option. They involve connecting an employer's HRIS with operational tools without using APIs or third-party solutions. These integrations are challenging to maintain and scale. Any change in one system requires adjustments to multiple connections. However, if the integration needs are minimal and a high level of personalization is essential, point-to-point integrations may be a viable solution.

Challenges to HRIS Integrations

Ensuring data quality and standardization

Challenges in HRIS integrations involve maintaining data quality, accuracy, completeness, timeliness, and consistency across multiple HR providers. These are crucial to avoid compliance and security issues. To address this challenge, establishing data standards is essential, ensuring compatibility among data from different sources. 

Note: If you are building integrations with multiple HR systems, consider using a specific tool to normalize data into a common format to save significant engineering resources.

Gated APIs and partnership complexity

Many HR platforms lack public APIs, requiring a partnership agreement to access API keys, documentation, and sandboxes. These agreements often involve security checks, lengthy negotiations, and additional fees. Some providers even demand a minimum customer count before partnering, posing a challenge for resource-limited startups seeking essential integrations for their products.

Post-integration maintenance

Ongoing maintenance is vital for the accuracy and quality of integrated data, especially for customer-facing integrations. Key maintenance issues include:

  • API versioning: Custom API integrations must address versioning challenges to ensure continued compatibility with HRIS APIs, even after updates.  
  • Documentation updates: Some HR API providers may not regularly update developer documentation. They may also not provide it in your language. This places additional burden on the development team.
  • Monitoring and logging: To offer a smooth customer experience, you need to establish mechanisms to track the health and performance of each integration. You should also allocate engineering resources to regularly check logs and promptly address errors. 

Cost of building and maintaining 1:1 integrations

Creating and maintaining 1:1 integrations demands a substantial investment of time and resources. The entire process, from planning and testing to development and ongoing updates—can consume hundreds of developer hours and tens of, if not hundreds of thousands of dollars annually for just one integration. Unfortunately, this approach lacks scalability, as resources dedicated to integration maintenance could be better utilized to enhance product features.

Refer to our whitepaper Build vs. Buy for a detailed discussion on the merits of building integrations in-house versus using a commercially available unified API.

Scalability

When handling in-house HR integrations, scalability becomes a significant hurdle. Developers must delve into various providers' API/developer documentation, decode data intricacies, craft custom codes for each integration, test them, and offer indefinite support. Managing more than three integrations can become a monumental task. Leveraging an integration tool or API aggregator improves scalability, allowing you to concentrate primarily on product development projects 

Also read: How equity management tool Carta scaled their integration strategy overnight with Finch.   

Benefits of HRIS Integrations

HRIS integrations offer numerous advantages, reducing time, cost, and resource requirements for app developers while notably enhancing employer experience.

Benefits for HR applications/ service providers

  • Increased total addressable market (TAM): The number of integrations is pivotal in SaaS tool purchasing decisions. In fact, 97% of HR admins believe that connections with employment systems, such as HRIS, are important to them. Supporting more HRIS integrations can broaden your platform's reach, enabling you to effectively serve more employers and shorten deal cycles. Utilizing unified APIs can accelerate your integration roadmap with minimal effort.
  • Improved customer experience: HRIS integrations automate data synchronization between applications. This means when an employee joins the organization or achieves a milestone, they can be automatically enrolled in specific programs without manual intervention. This frictionless experience increases customer satisfaction and loyalty, encouraging more consistent app usage.
  • Better compliance: Automated data synchronization between your product and the customer's HRIS ensures that any changes in either application are promptly captured and communicated. This minimizes the risk of overlooking crucial alterations in employee or organizational details, leading to better compliance.

Benefits for employers 

  • Streamlined HR administration: Automating repetitive tasks and workflows reduces HR administrative burden, freeing up valuable time for strategic initiatives.
  • Enhanced data accuracy: Data entry for HRIS integrations occurs only once in the HRIS and automatically syncs with other application systems. This significantly lowers the likelihood of costly data entry errors, such as delays in updating data, entering incorrect information, or forgetting to make necessary changes manually.
  • HR data visibility (eliminate data silos): Integrating the HRIS with other oft-used platforms ensures a centralized system for managing all employee and employment data. This fosters greater visibility and eliminates data silos, enhancing overall organizational efficiency.
  • Enhanced employee experience: HRIS integrations boost HR operational efficiency. It provides employees with a single platform to update and monitor their employment details. This eliminates the need for toggling between multiple platforms to manage benefits, performance, and payroll information.

Simplify HRIS Integrations with Finch

If you need to build multiple HRIS integrations, Finch offers a unified employment API that simplifies the process with a single integration. Finch provides a standardized data model, eliminating the need for developers to handle different data formats, development complexity, and API variations.

  • Industry-leading coverage: Finch is the leader in the HR and payroll integrations space in terms of coverage and depth. It connects with over 200 HR and payroll providers—covering 88% of the US employer market—and helps you unlock easy and secure access to employment data overnight. See our integration catalog
  • Easy, secure employer experience: The Finch Connect feature streamlines employer onboarding into two simple steps: selecting the HRIS and authorizing permissions. It takes just 30 seconds for employers to connect their HR systems with your tool. Plus, Finch improves employer experience by eliminating the need for manual data entry and reducing occurrence of errors.

Please contact us if you are looking for a comprehensive HRIS integration solution. 

97% of HR professionals say it’s important for your app to integrate with their employment systems

Learn more in our State of Employment Technology report ->

97% of HR professionals say it’s important for your app to integrate with their employment systems

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