Approaching HR integrations strategy with a Unified API for HR and payroll

The HR Tech landscape has evolved rapidly over the past few years. Trends such as the rise of remote work and globally distributed teams have accelerated change in HR operations. HR teams now need more technologies to hire, manage, and pay employees spread across different locations. Between HRIS & Payroll, ATS, Accounting, and CRM, there are more and more sources to track HR data. It’s only gotten more important to unify these tools together with HR integrations into a single source of truth.

To make the most of HR operations on a global scale, it's important to consider using tools that integrate with one another via API. HR APIs enable seamless data exchange between software. This helps create a unified process when working with multiple teams, entities, and markets. The utopia of all HR APIs coming together into a unified API enables standardized, centralized, and automated data.

A Unified API can provide that single source of truth, pulling and normalizing data from different HR tools using just one API. It eliminates the need for individual integrations between HR software, which can be costly to build and maintain. This enables HR teams to streamline data flows, automate workflows, and gain actionable insights at scale, improving overall HR operations.

Fragmentation of the HR API landscape

Companies are managing teams spread across countries and employment types. Between EORs, full time employees, contractors, and other employment types, companies rely on several HR tools and technologies to manage their global payroll and human capital management (HCM) efficiently. These technologies need to interact with one another to cover all HR use-cases such as application tracking, onboarding, payroll, reporting, and salary payments.

However, the current state of HR integrations management in many organizations often leads to a fragmented landscape. This poses challenges for integration, management, and resource allocation.

One of the key challenges of integrating all of these HR integrations is the complexity of keeping them in a manageable structure. With multiple HR tools in use, each with its own API, integrating them together can be challenging. HR business users may face difficulties in managing data flows and ensuring data integrity. This fragmentation can lead to a disconnected HR ecosystem, making it challenging to streamline processes and gain insights effectively. The problem gets more noticeable with older and manual processes involved. With some providers sending data manually in spreadsheets, and zipped folders, not all data is available via API. 

Another challenge is the cost of developer and business intelligence (BI) needed to manage this data. Between custom middleware, data mapping, and data synchronization, the ongoing time and effort put into providing HR with actionable insights can be a resource drain. This can consume a lot of developer and BI resources, diverting their attention from other strategic initiatives. Additionally, managing multiple HR integrations could also result in more maintenance overheads, such as monitoring, debugging, and troubleshooting.

Frustrations also arise from the integration of multiple APIs together with custom in-house solutions. Custom middleware is often built to bridge gaps between tools that might not have easy integrations with one another. Managing and maintaining custom middleware can be costly, as it needs specialized expertise.

These frustrations are leading HR teams to start considering the benefits of a unified API solution. A unified API brings all these tools together, aiming for easier integration and implementation.

Related: The differences between middleware and an API

Benefits of unifying the HR stack into a Unified API

From a developer's perspective, unifying HR integrations into a single API brings several benefits. It simplifies integrations, reduces technical effort, and removes the need for custom middleware.

From an HR perspective, this approach offers flexibility, enabling you to choose and integrate the best HR tools that suit your customers’ needs. It provides scalability and adaptability to changing business requirements.

Let’s highlight some critical benefits:

Easier integrations and stack flexibility. Unifying HR integrations into a single API makes integration a breeze for developers. With a single connection point, developers can combine integrations together. This significantly reduces development time and speeds up the deployment of solutions needed for business decisions. This also offers flexibility, allowing HR managers to choose and integrate the best tools that align with their needs. It provides the freedom to switch or upgrade HR tools, ensuring a more agile and optimized HR ecosystem.

Lesser dependence on technical resources. With the ability to interact with structured, standardized, and automated data, the dependencies on other teams reduce. With free-flowing data between their tools and dashboards, HR is less dependent on BI and engineering teams. This frees up resources to make business decisions rather than tweak data and APIs to fit business specifications.

Lower costs. By unifying HR integrations, HR teams can reduce the cost overheads associated with multiple integrations. It eliminates the need for multiple licensing agreements if additional ERP or internal middleware is needed to maintain their integrations. Teams can choose cost-effective HR tools without compromising on functionality knowing that they'll all work well together. This streamlined approach can make HR operations more cost-efficient and budget-friendly.

Higher efficiency. Automating workflows and data between different HR tools eliminates manual data transfer and redundant tasks. This saves administrative burdens and improves HR process efficiency. Workflows such as onboarding, offboarding, and payroll can be automated, allowing HR teams to focus on strategic initiatives to drive organizational success, such as talent management and employee engagement.

Fewer human errors. Manual data entry and data duplication are prone to human errors. This can result in data discrepancies, compliance issues, and operational inefficiencies – a large risk when payroll data is in question. Unifying HR integrations into a single API helps minimize the risk of human errors by automating data transfer between HR tools.

Sample federated HR architecture for global payroll management

Unifying HR systems into a single endpoint using a platform like Merge, and running the underlying HR operations through a platform like Lano enables you to rapidly plug and play with new APIs to unlock business use-cases without falling into the trap of disconnected data.

Key Takeaways

In conclusion, with HR operations becoming more complex and distributed, unifying HR tools into a single API is crucial for HR teams to improve overall HR operations. This allows HR teams to streamline data flows, automate workflows, and gain holistic insights from all these disconnected tools. On the other side of the coin, HR software vendors are finding it more important than ever to offer integrations to customers, given that the ease of connectivity to existing tools is a strong selection criteria when choosing new software.

A unified API simplifies the integration process, reduces technical efforts, and eliminates the need for building and maintaining custom middleware. It provides the freedom to switch or upgrade HR tools without disrupting the entire HR ecosystem, offering scalability and adaptability to changing business requirements. 

Ultimately, the utopia of the entire HR stack coming together into a unified API unlocks the ability for standardized, centralized, and automated data, regardless of the complexity or scale of operations.