Best-of-breed vs integrated HRMS: which should you choose?

Bespoke software curated to your particular business requirements or off-the-shelf ease and convenience? It’s an age-old question in the world of HRMS: a selection of best-of-breed modules, each designed for a specific function or an integrated, do-everything software suite?

As you’d imagine, there is no single clear answer. What’s best for your organization depends solely on what you’re looking for… what you need. So, let’s take a look at the pros and cons of best-of-breed HRMS and integrated suites to help you decide.

Best-of-breed HR systems

A best-of-breed HR system consists of standalone modules, each designed to excel in a specific HR function such as payroll, recruitment, or performance management. These systems allow businesses to handpick the most advanced tools for each function rather than relying on a single vendor’s suite of services.

Key advantages of best-of-breed HR software

• Faster Implementation: Since these solutions focus on a single function, they tend to have a quicker setup and require less organizational change.
• More specialized features: Best-of-breed systems often provide deeper functionality within their niche. For example, a recruitment-specific platform may offer AI-driven candidate screening and gamification features that an integrated HRMS lacks.
• Simpler training and adoption: Employees only need to learn the specific module they use, reducing the complexity of onboarding and training.
• Frequent updates and innovation: Best-of-breed software depends on being, well, the ‘best’… Hence, updates tend to be more frequent. It’s easier for vendors to make changes to focused, niche software.
• Expertise and best practices: Since best-of-breed vendors specialize in a single area, they often bring deeper industry knowledge and best practices tailored to specific HR functions.
• Flexibility in vendor selection: Switching systems is easier because the disruption is only to one of your HR functions. Your business won’t grind to a halt if you decide you want to switch to a different software vendor. 
• Lower risk of vendor lock-in: Similarly, with multiple best-of-breed modules, there’s no reliance on a single vendor; lessening and spreading the risk and impact of a provider unexpectedly going out of business.
• Scalability: Best-of-breed systems are by nature less complex than integrated suites and are usually designed to be easy to use.

Challenges of best-of-breed systems

• Integration complexity: Seamless data flow between separate tools can require additional middleware or IT support.
• Higher overall costs: Multiple software subscriptions and integration expenses may exceed the cost of an all-in-one HRMS.
• Potential data silos: If systems don’t communicate effectively, HR teams may struggle with fragmented employee data.

Best for: Startups, small businesses, or companies requiring specialized HR tools that exceed the capabilities of standard integrated HRMS solutions.

Need some help with your HRMS selection journey? Check out our comprehensive nine-step guide to HRMS selection

Integrated HRMS

An integrated HRMS combines multiple HR functions—such as payroll, recruitment, and performance management—into a single system with a unified database. Many solutions aim to provide end-to-end management of the employee lifecycle.

Key advantages of an integrated HRMS

• It works out of the box: With multiple best-of-breed modules, work is often needed to ensure compatibility and seamless communication, requiring middleware and patches to transmit and ‘translate’ information between different software packages.
• A single vendor contact for all of your HR software support needs means that if you have a problem with an integrated HRMS there’s only one company you need to contact.
• Cost efficiency: Bundling multiple HR functions into one package can be more cost-effective than purchasing separate best-of-breed solutions.
• Easier IT management: Maintenance, updates, and security are streamlined since everything operates within one system.
• Consistent user experience: Employees and HR teams use a single interface, reducing learning curves and improving adoption.
• Seamless data flow: With a unified database, HR teams avoid issues related to data duplication, mismatched formats, or manual re-entry.
• Enhanced reporting and analytics: Pulling reports from a single system ensures accuracy and eliminates the need to merge data from multiple sources.
• Stronger compliance and security: Centralized data management improves regulatory compliance and security protocols.

Challenges of an Integrated HRMS

• Limited customization: Some systems lack the deep functionality of niche best-of-breed technology for specific HR tasks.
• Higher upfront costs: While long-term savings may be significant, initial implementation costs can be higher.
• Longer implementation time: Rolling out a company-wide system requires more planning and training.

Best for: Mid-to-large enterprises looking for a long-term, scalable HR technology solution that minimizes complexity and supports business growth.

A final word on integrated HRMS: if you go the integrated route, ask some probing questions during the shortlisting and demo stages of software selection. Some systems are more integrated than others and some of the above advantages may not be available if you buy what turns out to be a collection of best-of-breed standalone modules, ‘loosely stitched together’.

Is there a perfect HR automation option?

Short answer: No.

Slightly longer answer: There are dozens of variables to consider before you find the right HR system or systems for your business. No single integrated HRMS system or combination of best-of-breed modules is likely to tick all the boxes for every company.

However, by being crystal clear on your current and future HR automation needs, you can search for the right solution for you. Using the above pros and cons as a starting point, you can ensure your HRMS search is focused on your needs and not the glamour of the vendor’s marketing.

_{Originally written by Anna Roberts.}