Get payroll right with these 5 tips

Payroll is essential for any organisation. If you aren’t getting this process right, you risk pushing away employees and affecting brand reputation.

Without proper care and attention, payroll errors can arise. This process should be treated as a fundamental way to operate effectively. The second you leave payroll to the wayside, you risk issues.

Payroll errors can erode trust, severely damaging an employer’s image. To assist in getting this process right, Jeff Phipps, senior vice-president of GlobalView at ADP, gave five important considerations for payroll teams:

1. Invest in the right technology

Mr Phipps commented: “Businesses must invest in technology that will cut both costs and risks. A cloud-based, unified solution needs to be able to scale and grow as the business does. When evaluating the relative merits of global payroll technology options, a business should ask three basic questions. How will the new system demonstrably improve efficiency across its current payroll operations? Has the vendor designed its payroll platform specifically to expedite business growth efficiency? And, in what ways will the solution help the company hit the ground running in new markets?”

2. Make sure payroll is streamlined and predictable

“Improving payroll efficiency extends beyond how easy it is for the team to accurately calculate gross-to-net earnings, apply and comply with nuanced local labour laws and disburse salaries into employees’ bank accounts. To be optimal, payroll needs to be streamlined and predictable right across the payroll function,” said Mr Phipps.

“Typically, a business will be looking to improve efficiency by lowering costs in system maintenance, payroll tax penalties, the cost of ad hoc connectivity, pay disbursement and workforce management costs. The most significant – and preventable – cost associated with inefficient payroll operations, though, is the regulatory fines meted out for non-compliance with labour-related legislation. These must be prevented at all costs.”

3. Increase visibility to drive powerful insights

“Businesses can’t control what they can’t see. To ensure maximum visibility, the payroll solution must be fully integrated with all existing human resources information system (HRIS) and accounting systems. This means that teams have one single version of the truth at their fingertips to ensure better decision-making and cross-departmental collaboration,” he explained.

4. Deploy agile systems

“It is important to deploy agile systems that are primed to seamlessly deliver pay and adapt to new ways of working as the business expands into new markets. If a payroll team can quickly provide credible pay-related information to senior managers, forecasting pay-related trends becomes much more straightforward, making decision-making a breeze. Even better if this information can be presented visually to mitigate misunderstandings,” Mr Phipps said.

“Scalability is crucial in this too – a truly agile system is able to scale and grow as the business does, in new or existing markets. A dynamic payroll dashboard that breaks down performance across countries and alerts HR to potentially problematic areas in advance means that teams can swiftly intervene to resolve issues before they escalate.”

5. Involve teams

Mr Phipps outlined: “It can be tempting to focus exclusively on technology’s role in driving payroll process efficiency and productivity gains, but what about the people who are following and implementing the payroll process? Does their reporting line impact overall efficiency?”

“In our payroll survey, we found that global payroll doesn’t often sit neatly under one business function. This means there are several groups of stakeholders with responsibility for the strategic direction of the service, each with their own views of what needs changing.”

“Whether the payroll function is centralised, regionalised, or follows a location-specific ‘centre of excellence’ shared service model, make sure the business is set up for payroll success by gaining important buy-in from teams from the off. Engaging the payroll, HR and finance teams, and employers as a whole in what efficient payroll means for them is key in the deployment of it. Remind them that the insights to be gleaned from payroll data will be crucial to future workforce strategies as the company continues to expand,” explained Mr Phipps.

“In our survey of senior payroll professionals around the world last year, three-quarters of respondents admitted to not being able to manage payroll 100 per cent effectively. By undertaking the steps above, you can buck the trend and ensure you are running an efficient payroll process that will help, rather than hinder, your company’s plans for growth.”

Jack Campbell

Jack is the editor at HR Leader.