Fragmented HR systems are creating payroll errors and costing US companies millions

Fragmented HR systems are a major driver of payroll errors and mounting costs for U.S. companies, according to a nationwide EY survey. When employee data sits in multiple, unconnected platforms, inaccuracies and duplicated processes proliferate, inflating both risk and expense. The study finds that a single input error in a traditional payroll system costs an average of $291, while 20% of a company's annual payroll contains errors. Despite this, 77% of organizations still store data across more than six HR technology providers, and 71% say they cannot transfer or share data between those platforms. Experts argue that stand-alone systems force manual re-entry and create gaps that trigger penalties and compliance issues. Paycom’s Shane Hadlock notes that fragmented data leads to multiple logins, inaccurate information, and inefficiency, undermining ROI and security, while emphasizing the value of employee data visibility to reduce errors. HR automation offers a path to a single-database architecture that enables seamless data flow, reducing manual work and improving accuracy. Forrester’s Total Economic Impact study is cited as evidence of the potential financial benefits of integrated HR solutions.