Payroll is often treated like the poor cousin of strategic internal business functions. However, taking the time to critically evaluate your payroll—and your mindset to payroll—can change your perspective and bring many benefits.
These four common mindset mistakes are, happily, relatively simple to address:
1. Payroll is often neglected until there is a crisis
Anecdotally, it takes eight months for an employee to regain confidence in their payroll after just one error. The time required by payroll teams to verify, adjust and readjust an employee’s pay is huge—without adding value to the organisation or individual. Paying attention to payroll when it’s business as usual is essential, rather than hyper-focusing on the area when there’s a problem.
2. Unclear roles and responsibilities
Payroll can and will generate changes and improvements from within, and will be able to implement them. But payroll is just one part of the organisation. Identifying what happens upstream and what is (or isn’t!) flowing into payroll is important. Organisations should consider, and critically examine, the overall organisation within which payroll operates. Your payroll team or function isn’t an island and needs to be seen as one - albeit hugely important - part of the process that results in employees being paid. Ask yourself, what are the wider organisation’s processes, operations and goals that payroll could support, or that impact on payroll’s ability to deliver its core tasks?
3. Lack of intentional inclusion of stakeholders
Payroll is experienced in different ways by different people. Whether it’s a new employee, an employee on sick leave, a line manager struggling to understand a new expenses policy, a finance director who needs to close this quarter’s reports, a payroll administrator or an outsourced payroll provider, they all have different priorities, experiences, and levels of authority to effect the outcome they want. If your organisation is explicit and intentionally inclusive about these different perspectives and experiences, it can help plan for - and navigate - potential obstacles, which will make for a smoother journey when problem-solving is required. Unless such diversity of these moments and needs is considered and planned for, payroll will not be properly resourced or prepared to respond, and the experiences of key stakeholders will not be positive.
4. Global or individual? Or both?
Payroll must be an overall process and yet accommodate each individual employee. Employee numbers, benefits packages, legacy systems, HR reporting capabilities, organisation culture and individual circumstances will all impact on the complexity of payroll. For those of us involved in the business end of payroll process and delivery, the mythical idea of ‘a payroll button’ (note the singular!) is appealing, although far-fetched. The complexity, nuance, robustness and flexibility required by payroll are increasing all the time. By being conscious of these issues and taking them into account, payroll can both survive and thrive. In practical terms, this could mean including payroll in planning new HR systems or processes; linking in with HR on employee experience programmes and priorities; and taking resource or system concerns raised by your team seriously.
The key actions to take now
Payroll is often taken for granted until there is an issue. And then, it is a huge focus for many organisation stakeholders—often making understandable demands, but without any appreciation of processes, system capabilities etc. Avoid this experience by getting payroll into the spotlight without it being in hot water. The following points can help you achieve just that.
- Being an active and visible part of the wider organisation is critical for payroll. It is critical to communicate what is going into payroll and what is not. It is not good business, or a good experience, for an organisation to fail to consider how payroll operates as part of the organisation’s whole employment tax, employment law and revenue compliance profile. Instead, map your processes and identify your stakeholders.
- Payroll process mapping opens the opportunity to identify, discuss and alter how things are happening, or who is responsible for them (if anyone!) Clarity around roles and responsibilities isn’t just for the benefit of payroll, however. It’s a proactive risk management strategy within the organisation that also opens up the opportunity to outline how payroll adds value. By mapping an end-to-end payroll process (i.e. not one that starts within the payroll team when instructions are provided), payroll can add value to the organisation while often improving its own lot.
- There is a tension between the universality of payroll (everyone needs to get paid) and bespoke requirements (everyone needs to get paid their pay). You are an expert in your own payroll and organisation, and how you might move forward. The most urgent or important challenges facing an organisation or an organisation’s payroll team—or how to go about them—will vary from organisation to organisation. Pick either an easy win or the biggest pain point, and begin promoting payroll’s positive capability.
We are here to help you
We are here to help, with experience in payroll processing, payroll function effectiveness, payroll provider selection and payroll consulting. We understand payroll and have experience unpicking strengths and requirements while providing an external, independent perspective. If you would like to discuss how we could help you or explore PwC’s Payroll Navigator tool, call the PwC Ireland Payroll Solutions Team.
