Fragmented HR systems are a major cause of payroll errors, compliance risks, and poor operational efficiency in US companies.
When employee data is spread across multiple, unconnected platforms, it leads to inaccurate data and inefficient, duplicated processes. This negatively impacts costs and productivity. Staff time is spent resolving errors and problems, which may incur penalties.
Reliance on disconnected systems is costing companies millions of dollars. A nationwide survey by consulting firm EY shows that just one input error in a traditional payroll system costs an average of $291. The same research reveals that 20% of a company’s annual payroll contains errors.1
Despite this, 77% of organizations surveyed by Forrester Consulting still store their employee data across multiple human capital management (HCM) databases — from more than six providers on average — and 71% admit they can’t transfer or share employee data between those platforms.2
But there is a simple solution to ensure payroll accuracy and operational efficiency: HR automation.
Fragmented systems compromise payroll accuracy
The reason so many companies still rely on fragmented systems is largely due to legacy infrastructure and the gradual adoption of tools needed for specialized tasks. The problem with stand-alone tech systems is that they’re designed to manage one specific task or area and can’t handle the full employee journey from recruitment through payroll, benefits, and more.
“When you stitch multiple platforms together, you get fragmented systems that lead to multiple logins, inaccurate data, and inefficient, duplicative processes,” says Shane Hadlock, president and chief client officer of Paycom.
He adds that payroll is especially vulnerable to errors because manually reentering data across disconnected platforms significantly increases the risk of incorrect employee pay and compliance violations, often with financial and legal consequences.
“Compliance depends on accurate, timely data, but fragmented systems make that nearly impossible to guarantee,” says Hadlock. “When employee data lives in multiple databases that don’t sync, gaps create exposure, which drives up costs through penalties, errors, and the manual effort required to hold it all together.”
He adds that inaccurate data also erodes employee trust and directly compromises a company’s ROI, security, and efficiency. But when employees have greater visibility into their pay and are guided to find and fix errors before payroll submission, it builds trust between employees and their organization.
Why a unified HCM system is a trusted payroll provider
HR automation is a one-stop solution — reducing errors, ensuring compliance, enhancing the employee experience, and increasing employee productivity.
A single-database architecture allows data to flow seamlessly across the software. This reduces the need for manual work, improves data accuracy, and frees teams to focus on higher-value work. Deploying the right digital tools and software also brings significant financial benefits. A Forrester Total Economic Impact™ study commissioned by Paycom shows that interviewed companies using HCM tech with all payroll and HR functions and data in an automated single-database software achieved a projected three-year ROI of 362%.3
The Kraft Group — a Massachusetts-based company operating 20 businesses in five states, including the New England Patriots — is just one organization that’s experienced real workforce management benefits.
The Kraft Group operates in eight industries, including professional sports, manufacturing, and logistics. With a goal of winning and leading in every sector, it needed an HR and payroll system that could handle its diverse 5,000-employee base. Its previous payroll provider proved to be problematic, with disjointed systems and manual processes.
“At the end of the day, it’s about turning HR from a transactional function into a strategic driver of the business — and having the right technology makes that possible,” says Miranda MacKenzie, senior director of HR operations at The Kraft Group.
Investing in unified HCM tech ended years of wrestling with manual processes and reduced the payroll processing preparation time by 75%. Furthermore, The Kraft Group was able to maximize revenue and decrease cost by consolidating all employee information into a single software. The company saved $5 million from employee usage, calculated by Paycom’s Direct Data Exchange® methodology, which reflects the massive efficiency gains it has achieved through a single-database software.
The Kraft Group & Paycom | By-The-Numbers
75% reduction in payroll prep time thanks to Beti®$5 million in savings calculated by Direct Data Exchange®100% tech usage from their 5,000 employees
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“A single database isn’t just an efficiency gain — it’s the foundation of how we manage our workforce. When all of our data lives in one place, we can track the entire employee life cycle in real time and turn that into insights that actually drive business decisions,” MacKenzie says.
The Kraft Group is in good company. A Nucleus Research study commissioned by Paycom shows organizations using a single software can achieve productivity gains of up to 64%, with one technology company reporting an 80% decrease in payroll processing time.4
“When every HR function draws from the same source of truth, the cost of staying fragmented becomes impossible to ignore,” says Hadlock. “The real question is not whether a unified HCM is worth the investment, but whether businesses can afford the inefficiencies of disconnected systems.”
Learn how a unified HCM software like Paycom can save you money and lead to productivity gains.
This post was created by Insider Studios with Paycom.
1 EY, Estimate the Cost and Risks Due to Payroll Errors, ey.com, December 2022; www.paycom.com/media/sales-content/EY_Payroll_Errors_Infographic.pdf
2 Single-Database HCM Solutions Drive Cross-Business Success, a commissioned study conducted by Forrester Consulting on behalf of Paycom, May 2025; www.paycom.com/about/press-room/fragmented-hcm-systems-jeopardize-business-efficiency-paycom-research-reveals
3 A commissioned Total Economic Impact™ (TEI) conducted by Forrester Consulting on behalf of Paycom, June 2025. Results are for a composite organization based on interviewed customers; https://www.paycom.com/learn-more/forrester-tei-automation-study/
4 Nucleus Research, The Value of Full-Solution Automation With Paycom, January 2026; www.paycom.com/resources/nucleus-research-the-value-of-full-solution-automation-with-paycom/
