As 2024 passes into the history books, it’s an opportune moment to reflect on the trends and challenges that have shaped the HR technology landscape over the past year. While we’ve witnessed remarkable innovation—from advancements in AI-driven recruitment tools to platforms enhancing employee experience—one issue has persisted: the problem of siloed data. For HR professionals, this challenge remains a significant roadblock to operational efficiency and strategic impact.
The cost of siloed data in HR
Despite the proliferation of advanced HR systems, many organisations still grapple with disconnected software applications that fail to communicate effectively. Payroll, HRM, performance management, recruiting, and learning management systems often operate as isolated entities, each holding valuable data. This lack of integration creates an environment where data retrieval and consolidation become cumbersome tasks.
HR leaders report spending countless hours extracting information from various systems to compile the reports needed for decision-making. The effort required to manually reconcile disparate data sets is not just a productivity drain; it also introduces risks of errors and inconsistencies. A study by NTT DATA Business Solutions found that nearly half of HR managers spend the bulk of their time on activities such as building custom reports for ad hoc requests (45.2%) and merging data from multiple sources (27.4%).
The hidden opportunity cost
Beyond the obvious loss of time and resources, the true cost of siloed data lies in the missed opportunities for HR professionals to drive meaningful organisational change. Consider what 15 hours a week could achieve:
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Developing talent: Instead of battling spreadsheets, HR teams could focus on creating robust development plans that empower employees and build future leaders.
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Enhancing employee experience: Time saved could be redirected to initiatives that improve engagement, satisfaction, and retention.
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Driving business growth: Strategic HR efforts—such as workforce planning aligned with business objectives—could directly contribute to organisational success.
By allowing operational inefficiencies to persist, businesses risk undermining the strategic potential of their HR teams.
Compliance and risk management
Disconnected systems are not just a productivity issue—they can also expose organisations to compliance risks. For example, siloed data makes it more challenging to generate accurate and timely reports for regulatory requirements such as GDPR or labour laws. Manual data consolidation increases the likelihood of errors, such as distribution or exchange of sensitive information using inappropriate channels or exposure to unauthorised personnel,which can lead to penalties or failed audits.
Integrated systems, on the other hand, offer centralised data management, ensuring accuracy and reducing compliance risks. By automating report generation and maintaining consistent data quality, HR teams can focus on strategic activities rather than worrying about potential legal pitfalls.
The Financial impact of inefficiencies
Siloed systems do not just cost time; they also have a tangible financial impact. The time spent manually managing data represents a significant loss in productivity, while errors and inefficiencies can lead to increased costs for corrections and delays. According to a recent study, organisations that rely on manual HR processes spend 20-30% more on operational costs compared to those with integrated systems.
By investing in integration, businesses can reduce these expenses and reallocate resources toward growth-oriented activities. The ROI of integrated systems extends beyond cost savings, unlocking potential for innovation and strategic alignment.
Trends and innovations in 2024
While the issue of siloed data remains, 2024 has also been a year of promising developments in HR technology:
- Increased adoption of iPaaS solutions: Integration Platform as a Service (iPaaS) tools have gained traction, offering HR teams a way to connect their disparate systems without requiring extensive IT involvement. These platforms streamline data flows, reduce manual work, and provide real-time insights.
- AI-powered analytics: Artificial intelligence has continued to make waves in HR, particularly in predictive analytics. Integrated systems powered by AI can provide actionable insights into workforce trends, enabling proactive decision-making.
- Focus on employee-centric systems: There has been a noticeable shift toward software that prioritises user experience. Unified platforms designed with both HR professionals and employees in mind are emerging as a preferred choice.
Addressing the problem: What HR leaders can do
To tackle the issue of siloed data and reclaim lost time, HR leaders should consider the following steps:
- Evaluate your current systems: Conduct an audit of existing HR applications to identify pain points and inefficiencies.
- Invest in flexible and scalable integration: Explore solutions like iPaaS or middleware to connect systems and enable seamless data exchange.
- Prioritise usability: When selecting new tools, prioritise platforms that integrate easily and offer intuitive user interfaces.
- Collaborate with IT: Partner with IT teams to develop a long-term strategy for system integration and data management.
- Build a Business Case: Use the time and cost savings from integration to build a compelling case for investment in technology upgrades.
Looking ahead to 2025
As we step into 2025, it is clear that the future of HR technology lies in integration and simplification. HR leaders and tech specialists must continue to push for solutions that eliminate silos, empower teams, and enable data-driven decision-making. By doing so, they can transform the HR function from an administrative necessity into a strategic powerhouse that drives business growth.
2024 has shown us the importance of addressing operational inefficiencies head-on. It’s now up to us to take the lessons learned and build a more connected, productive, and impactful future for HR.
Happy 2025!
