This two-part series explores the value of APIs and how HR can use them to create more effective HCM technology systems. Part one is an overview of APIs and how they can be used to integrate data with systems of record.
In the fast-evolving world of human capital management, HR professionals are leveraging technology to make HCM processes more efficient and effective. Strengthening the HR ecosystem gives HR practitioners more time to focus on the big picture. Fortunately, HCM technology has grown tremendously in sophistication and ease of use.
What’s an API, and why does it matter to me?
HR professionals today have a wide variety of HCM technology solutions available beyond the basics of payroll and record-keeping. Many HCM vendors offer integrated partner applications that work hand in hand with the company’s system of record (SOR) and expand HR’s functionality. HR can pick and choose which applications or software they need to best serve their organization and its business needs. From recruiting and onboarding to performance management, compliance, benefits administration, health and wellness programs, DEI and more, HR leaders now have the ability to easily expand HCM capabilities.
These integrations are made possible by application programming interfaces, commonly known as APIs. APIs enable diverse applications to smoothly connect and easily share data between systems. For example, HR collects a great deal of data about employees from hire to retire—personal information, benefits, pay, promotions and more. When data changes in one domain, it can affect other domains. For instance, when an employee gets married, that information should be shared with the benefits system because the new marital status could result in a change in benefits coverage. APIs allow one system to securely share that updated data to whichever other applications need it.
Previously (and still today, for some), sharing data required manually entering data in multiple places, or importing and exporting files such as Excel spreadsheets. These methods were time-consuming and prone to errors. APIs, however, enable real-time, automatic data syncing. For example, when an organization hires a new employee, HR can enter the employee’s information into one SOR, and an API automatically sends that data to other systems, such as time tracking or learning management.
APIs are not software applications or productized solutions. APIs are like building blocks. They are points where data can be pushed in or pulled out. They provide a structure to build a customized HCM solution. APIs enable solution providers to take data and leverage it more easily than a file that gets pushed to a server. In the latter, someone has to know how to retrieve that information, figure out what it is and then transform it into code that can be consumed in some other system.
The other advantage of APIs is that they provide a more secure way to transfer data compared to files. They enable solutions that are well thought out from a data standards and security perspective.
Every company is unique
APIs enables HR professionals to take advantage of a connected ecosystem. You can choose solutions based on your biggest needs and add more solutions as your requirements change or as your company grows. Many applications are prebuilt to integrate with your payroll/HCM vendor automatically. In some cases, businesses choose to leverage internal developers or system integrators to build custom integrations with their existing HR and business systems using APIs. Either way, you have the ability to build your HCM ecosystem however you choose.
Here are some examples of API-enabled or integrated HR solutions and how they can strengthen your HR capabilities and service.
Employee engagement and retention
With the tight labor market, companies can’t afford to lose good people. Solutions that can support employee retention include:
- Earned wage access, where employees can access their pay before payday, reducing financial stress related to cashflow shortfalls between paychecks.
- Performance management solutions that provide the ability to give real-time, one-on-one feedback, 360 reviews, social praise, survey employees, and suggest rewards and recognition to ensure that good performance gets noticed.
- An anonymous employee hotline and mobile app that empower employees to report safety issues; unethical, abusive and discriminatory behavior; illegal activity; and code of conduct violations—resolving minor issues before they become major problems.
Recruitment, selection and onboarding
These solutions help you cut down the time it takes to find, hire and onboard new employees.
- Recruitment tools like applicant tracking systems that streamline sourcing, communication, interview and reporting processes. These solutions typically automate emails, and assign follow-up tasks and candidate questionnaires with intuitive and custom workflows.
- Employee verification applications can automate the employment and income verification process and help reduce risks and minimize costs.
- Onboarding tools that humanize the new hire process with a personalized welcome portal, mobile access, and customizable and dynamic templates, providing the information and support new employees need even before their first day.
- Talent strategy solutions that incorporate your company’s unique mission, goals and roles into every phase of the employee experience.
There are hundreds of API-enabled HCM solutions available. For example, administration of benefits, including pre-tax accounts and COBRA, time scheduling and job costing for the construction industry, and position management/control, which aids with headcount and succession planning. Whatever function you’re looking to add or expand, APIs can help integrate with your system of record.
Out of the weeds and into the C-suite
When you decide that using integrated solutions is the right path for your organization, begin by thinking holistically. Consider all of the systems to which HR data flows. How can you get the most bang for your buck using that data? What solutions do you need? Then look for vendors that offer pre-vetted, pre-connected strong partners that are already integrated securely with their HCM solution. Ideally, you should be able to shop easily for applications by use case and function, or if you need more assistance, identify vendors that offer development and implementation support.
By streamlining processes and automating manual, repetitive tasks and data entry, API-enabled HCM tools can save HR time and reduce errors. That time can be used to be more strategic in your work, allowing you to leverage the power of HCM data for bigger business problems—for instance, by connecting it to procurement, finance, CRM and the company’s strategic goals. You’ve taken the time and energy to enter accurate, important data into your HCM system—make sure you get the most out of it.
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