Standalone HR and Payroll Systems in Higher Education

Higher education institutions most often choose their HCM and finance platforms from the same vendor—and usually also choose their student system from that same vendor. This trend has been true in higher education for 30 years and continues in buying trends today. Institutions recognize that using a single platform for their key transactional systems provides efficiencies by reducing implementation, administrative, and integration costs while providing a more holistic platform for employees and students and an aligned data model for a broad swath of institutional data.

Pressure on higher education human resources organizations is increasing. Many organizations experienced major staffing losses during the Great Resignation, from which they are now just starting to recover, and those losses hit human resources and payroll departments particularly hard. The customized, manual processes that had run on people power for years are proving unsustainable now that turnover is high. These factors lead human resources and technology leaders to look for alternative ways to improve processes when their institutions are not ready or cannot consider a full HCM and finance platform modernization.

Many HCM and finance solution providers also offer human resources and payroll outsourcing services, which have also seen an uptick in higher education (for the same reasons mentioned above). Outsourcing is an increasingly viable alternative, especially for smaller institutions that are aiming for administrative simplicity.

Institutions exploring standalone HCM platforms generally have urgent human resources and payroll issues to address and do not immediately have the time or resources to explore, procure, and implement a full SaaS-architected finance and HCM suite. They do, however, want to take advantage of the benefits of SaaS-architected HCM functionality, including

• Data and analytics to inform hiring and retention practices
• Improvement in skills mapping, career planning, and employee feedback to increase retention
• Improved workforce planning
• Simplified user interface for human resources
• Process simplification and automation of manual processes
• Improved employee self-service
• Reduced technical effort
• Reduced security and disaster recovery risk
• Improved business agility

Institutions in the market for standalone HCM and payroll platforms tend to enroll fewer than 5,000 students and have burning issues that must be remedied quickly. As institutions explore these commercial solutions, they have many questions—most important of which is whether the solutions can handle higher education-specific needs such as multiple jobs, split-funded jobs, and the high rate of hiring and termination for student employees and graduate students (to name a few).

So far, institutions trying this path are seeing mixed results, but there is hope for improvement as vendors continue to see increasing opportunities in higher education as an industry and work to provide solutions for its specific needs. Institutions considering a move to standalone systems will need to ask a lot of questions, talk to their peers, and, of course, consult their favorite industry analysts!