In a small business it's important that each division has internal synergy to function successfully. Lack of synergy is a possibility if you integrate your human resources and payroll divisions. Each department may have certain protocol that team members know and are comfortable with. Combining various protocol under one umbrella could prove arduous from an efficiency and productivity standpoint. High Cost
Integrating divisions may save you money in the long term, but will most likely come with a high cost in the short term. Problems arising from a lack of communication, unmatched skills between employees in both divisions, necessary training for both teams and other unforeseen problems can translate to high dollars to fix. For example, depending on the nature of your small business, it may be necessary to enroll both your human resources and payroll departments in extensive training to bring them up to speed and functioning on a uniform system. This training, along with the hours your employees will need to spend in training and not working, may become expensive. Differing Priorities
Every division in a business has its own priorities. When combining divisions such as human resources and payroll, inefficiencies may result from differing priorities. This can prove disastrous when tasks such as responding to employee complaints or delivering employee paychecks on time are both equally important to the way a business functions. Misunderstandings
The more employees you have working together, the more they will need to communicate, and the more likely you will be faced with an increased number of misunderstandings. Certain employees may regard integration as a sign of future layoffs, eroding employee morale. Once integrated into one division, team members may experience misunderstandings due to a lack of communication, differing priorities or employee resentment, among other things. These types of misunderstandings, both personal and...