HR Fragmentation - A reason for Worry for HR & Companies, Equally !

On the periphery of a business stands HR. Its birth is circumstantial.

Richard Arkwright, who is widely considered as the father of the modern factory system, did not conceive a place for today’s HR. He and other entrepreneurs of the day were only interested in people who were directly helping them in meeting the demand of the time. Later came in picture, a person who generally was seen riding a horse, having a felt hate on his head and a ‘Productivity tool’ in his hands, called hunter.  He had only one mandate - highest possible production by all means. We can draw a lineage of HR of today with this ‘Gentleman’?

Then came a ‘Period of Revolt.’ Agitations by workers were common all around the world. Governments of the day were pressurized to write labor laws on the one hand; and on the other hand, good samaritan psychologists started giving various people centric theories.  One the best to quote here is Edwin Locke’s Goal Setting Theory of Motivation. Things started changing.

Pure Administration to IR to Personnel to HR.

Within HR, ‘People HR’ to ‘Business HR’.  There may be few more aberrations of HR, we all keep hearing now a days.

Primordially, whatever is left out of the responsibilities of the ‘Primary Functions’ and was related to people was deemed to be considered as a part of HR.

Interestingly, off late, we are hearing two more ‘Developments’. One, many parts of erstwhile HR like Training & Development and labor Compliances etc no longer want to be clubbed under HR. They say they are different than HR as they need different skills & competencies to manage their responsibilities. This part is still manageable.

Second, the worst happened when the truncated automation sets its foot in HR. Boundaries are created. Roles are designed. HR of today is not defined by its universality but by the parts which are automated. Worrisome is continuity and tangibility of the function is at its biggest risk. Human touch has become a jargon that can be heard only in crafted events. Some may disagree for sure but reality is on our face. Accept it or avoid it, world will keep moving with or without HR.

Essense of the situation is companies, people and HR equally are facing a big challenge of its time. The challenge is not automation but truncated & distorted automation. Solutions so being provided by current HR tech companies are eradicating the very nature of HR and confidence of people in HR. 

One to mention here is the new practice of 'Bot Interview'. Its being forced upon with the reasons that it brings 'Speed' and 'Removes Biases'. May be. But if I am correct, the success rate of interview per se was 14%. It was when it were people who tried to look into different aspects of candidates by twisting & turning their questions. May be a point of debate to talk in favour or against but surely a point for all specialists to ponder upon and giving their final verdict.

Coming back to HR, HR cannot be cut into pieces. Outcome of one HR process may be the inputs to many.  Any distortion in the input-output process, the intended final outputs shall be highly vulnerable.Lets discuss it one by one:

A.   Impact of Fragmented HR on Companies

Let us start with the companies.  They are paying a steep price for fragmented HR systems, and the costs go far beyond software subscriptions. Here’s a breakdown of the impact:

1. Direct Financial Costs

  • Multiple tools add up quickly: For a small team of 25 employees, using separate tools for time-office, performance reviews, surveys, and documentation can cost £523.50/month, compared to about £100/month for an integrated platform like PrajjoHR.
  • Hidden costs per employee: A Deloitte study found that fragmented HR stacks cost:
    • SAP-based stack: $1,430/year per employee
    • Workday stack: $1,275/year per employee
    • Oracle stack: $1,180/year per employee
    • Unified Platform [PrajjoHR]: $410/year per employee.

2. Productivity Loss

  • HR professionals using fragmented systems lose 3–4 hours per week due to context switching and manual data entry. That’s 200+ hours per HR employee annually.
  • Employees spend 30 minutes extra per HR task, adding up to 40 million wasted hours monthly across organizations, costing $8.15 billion annually in lost productivity.

3. Compliance & Risk

  • Disconnected systems increase data inconsistencies, data seepage, leading to compliance risks and potential legal & operational costs. SMEs using multiple HR tools face higher exposure to regulatory errors and penalties.

4. Cultural & Engagement Impact

  • Fragmentation creates “digital cholesterol” - redundant logins, manual re-entry, and broken workflows. This lowers job satisfaction, increases burnout, and hurts employee experience.

Fragmented HR systems can cost thousands of dollars per employee annually, drain hundreds of hours of productivity, and introduce compliance risks. Consolidating into an integrated HR platform can reduce costs by 60–70%, improve efficiency, and enhance employee experience.

The benefit of Integrated vs.Fragmented HR Platform in saving.

 


B.   Impact of Fragmented HR on HR

HR fragmentation is the condition when it is split into multiple specialized areas or operates in silos rather than as a unified system. Any disarray will lead to its gradual decay. In ‘yesterday’s’ perspective, HR is responsible for:

Technological silos due failure of HR tech companies to offer well integrated platform have resulted into organizations going for multiple HR systems, for payroll, recruitment, performance, etc.  These different tools don’t integrate well. This makes data and processes fragmented.

Another limitation arising out of the situation is Strategic vs. Administrative Divide, HR often struggles to balance. Strategic HR that mainly includes workforce planning, culture building etc is made to see different than Operational HR that includes payroll, compliance etc. Once upon a time, people used to seamlessly move from one end to another, these two functions sometimes today operate separately, causing disconnects.

A rise in the HR cost with no ‘visible’ value addition, causing organizations to redistribute the entire functions to other major primary functions. I still remember a discussion with my CEO & CFO once, when the CFO offered to take away entire Compensation & Benefits from HR. Likewise, my COO in a discussion said that HR doesn’t understand developmental needs of its people, hence let it be handled directly by Operational heads.

Lack of Unified Vision: If HR leadership doesn’t drive a cohesive strategy, different teams focus on their own priorities, leading to fragmentation.

Fragmentation fueled further by truncated HR automation can cause inefficiencies, poor employee experience, and difficulty in aligning HR with business goals.

C.   Impact of Fragmented HR on People

The biggest limitation of fragmented HR function is lack of Consistency in Employee Experience and Policy Enforcement. When HR operates in silos, employees often face:

  • Different rules and processes across departments or regions.
  • Inconsistent communication about policies, benefits, and career development.
  • Uneven application of compliance standards, which can lead to legal and reputational risks.

This inconsistency undermines trust, reduces engagement, and makes it harder for HR to align with business strategy.

 


PrajjoHR:

A platform that has not only Unified HR but even has broadened its Boundaries

Keeping all the above limitations of current and possibly of all the HR Tech, Prajjo has visualized a platform that provides a seamless experience to all - Organizations, People and HR.

Prajjo is an emerging HR tech platform developed by Kenbox Technologies, and it’s positioned as one of the most comprehensive HR solutions in the market. It stands out distinctly on many respects with its competitors:

  • A cloud-based HRMS/HCM platform designed to manage the entire employee lifecycle.
  • Offers 54 HR modules, making it one of the most feature-rich platforms globally.
  • Focuses on AI-driven automation and employee-centric design for a seamless hire-to-retire experience.

 Major Features

Prajjo is Unique for 

  • Solves the “Mechanical HR” challenge by integrating automation + intelligence into routine HR tasks.
  • Highly customizable for company-specific policies.
  • Serves startups, SMEs, and large enterprises across multiple industries.
  • Holds 7 copyrights in HR innovation, which is rare in the HR tech space.
  • Has capabilities to calculate the value of contribution of HR to Growth & Profits.

PrajjoHR is marketed as an all-in-one HR platform, covering most HR parts—payroll, recruitment, L&D, analytics, engagement, competency framework creator, value calculator, workforce Planning & budgeting, performance management System, etc - making it the only HR Tech company offering such a wide range of HR modules on one single a unified platform.

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