3 signs that payroll processes are stuck in their tracks (and how to get moving forward!)
Many in the payroll profession are used to doing things a certain way, and for good reason. Consistent processes get people paid on time, keeping employees happy and engaged. There’s great comfort and security in that consistency.
This, however, opens up the risk of payroll processes getting stuck in the same old administrative tasks they’ve always carried out without exploring innovative alternatives. With stretched resources and minimal time to evaluate their own processes, it can be difficult to know when change is due.
In fact, change is now more important than ever. During the pandemic, payroll professionals proved the necessity of their work. According to the Australian Bureau of Statistics , by mid-March 2021 payroll jobs in most states and territories reached or passed pre-COVID levels. Being such an essential part of modern business, it’s vital that payroll continues to boost its own performance and capabilities.
There are three key areas in which payroll professionals can identify processes that are stuck in their tracks and have aged beyond the point of productivity. By looking more deeply into these areas, payroll professionals can discover new efficiencies and find ways to add greater strategic value
Mismanagement of interruptions
Routines are often thrown into disarray when an interruption occurs. For payroll professionals, this could be something along the lines of a request for a report that’s not in their standard toolkit; a fast, accurate report on award-specific pay interpretations, projected compensation costs in specific teams, or a breakdown of current salaries that can then be used to compare with the broader market.
An interruption could also be a larger interruption caused by an unforeseen event, such as weather catastrophes, an economic shock, or a pandemic. For example, it’s no secret that payroll professionals in Australia had their work cut out for them when it came to knowledge and administrative load of managing JobKeeper. A report from Michael Croker , Head of Tax at Chartered Accountants Australia and New Zealand, in September 2020 said payroll managers had to consider individual circumstances of employees, rather than treating them as a group.
“Clear communication with all employees is also vital for maintaining good worker relations and helping employees make important financial decisions,” Croker said.
Payroll teams also face legal interruptions, such as a referral to or contact by the Fair Work Ombudsman (FWO), a specific interruption to the payroll landscape, or process changes such as the introduction of Single Touch Payroll (STP) and the updated phases.
When an interruption occurs, payroll has to stop to gather information, often from various sources, prompting reach outs to IT, HR, and other departments for assistance and reports that interrupt daily critical operations.
Such interruptions are a sign that existing processes are slowing payroll down. It’s time for a digital transformation; to migrate outdated systems to a modern cloud and automate time-consuming processes.
Why? Because such technology unifies solutions for HR, payroll, and scheduling. It provides accurate and timely analytical data and insight that helps drive strategic decision making.
A large bottling company slashed one million hours of wasted employee time globally, in a two-year project, by focusing on where its employees wasted time in relation to HR activities. It offered self-service and other digital and automated solutions, which freed up the entire business to do higher-value work. It wasn’t just about payroll or HR, but that’s where it began.
Modern technology lightens the load by eliminating redundant and/or repetitive processes and inaccurate information, typically stemming from multiple sources of data. In doing so it reduces the amount of interruptions across organisations.
Slow adaptation to regulatory changes
As the spotlight shines more brightly than ever on payroll errors in an increasingly complex regulatory regime, payroll is continuously facing more challenges and changes.
These are a problem for all payroll professionals, who must understand and implement these changes in a timely manner to ensure compliance – often an impossible task without the right tools. The right technology can offer a scalable solution that is immediately and automatically updated with new regulatory requirements, as well as ongoing partnership with industry experts.
Such a solution can be handy in answering employee queries, for example. It can also be vital to save the business from damage, as was the recent case with a popular Australian airline.
When unions claimed airline employees were victims of JobKeeper wage theft , a matter that went all the way to the High Court, the airline had to be very sure of its own evidence, processes, payment, and roster records to have the court rule in its favour. Such surety might not be possible without the right technological solution.
Organisations whose systems and/or payroll procedures are not updated in a timely manner can face costly fines, other penalties, and legal action. If improper taxes are filed or employees are underpaid, the organisation’s reputation can suffer enormously.
All of this can be difficult to manage. Modern awards and superannuation-related compliance are extremely complex. This is particularly true for those using disparate, outdated, or manual systems for tracking hours worked, calculating pay, and applying policies.
Conversely, for businesses that seek to contravene payment standards with underpayments, technology can make awards and worker rights far more transparent. This can lead to greater attraction, engagement, and retention of talent, as employees feel confident in the care of the company. Transparency makes it more difficult for errors to occur.
All payroll professionals know it’s imperative to have steps in place to mitigate these risks. Fortunately, modern technology simplifies and automates these processes, aligning compliance strategy with payroll efficiency.
Furthermore, access to data and analytics can enable payroll to quickly identify areas of concern, adjust to changing regulations quicker, and minimise risks for the organisation.
Complacent service delivery
It’s critical for payroll to have up-to-date employee information. This means payroll needs a scalable way to take in and track everything from personal information and credentials to requests and inquiries.
Often, payroll professionals rely on email or paper-based forms, which can lead to missed requests and delays. This negatively impacts employee experience and exposes compliance risk.
A recent report from Yahoo Finance Australia outlined major changes to be aware of for the new financial year. These include:
- tax cuts and work-from home expensing,
- a change in the superannuation guarantee rate that has implications for take-home pay,
- changes in concessional contributions amounts to super and to super transfer caps,
- new Single Touch Payroll (STP) rules for businesses,
- new modern awards,
- and much more.
Evolving payroll regulations are also occurring in New Zealand; such as Payday Filing compliance and revisions to the Holidays Act.
Payroll professionals need to communicate these changes to employees across departments, divisions, and locations. If using outdated or multiple systems, or manual processes, this likely becomes a large project to organise and distribute.
Data-driven payroll solutions, on the other hand, can be designed to match a business’s unique requirements and workflows, importing data from disparate sources to run and deliver accurate and real-time reports, saving countless hours.
An up-to-date, scalable strategy alleviates the burden of managing employee requests and information and creates streamlined processes. It also reduces risk around human error, legislative non-compliance, the transfer of knowledge and more. This means payroll can spend less time looking for information and reduce the organisation’s exposure to compliance risk.
When payroll has the right tools and systems in place to manage its responsibilities in a way that works for the business, the department is more productive and adds greater value. It also helps other employees be more productive. The best practice for a payroll processing model is to:
- Identify parts of the process which need to be streamlined. For example, if repetitive tasks can be automated, and employees details and requests can be self-managed, how might you design your payroll processing if you were starting from scratch today? How would it compare to best practices in other organisations? How would it free up the time, not only of your payroll team, but also all other employees and stakeholders across the organisation?
- Look for opportunities to deliver new or expanded processes and be willing to adapt to change. In an environment of technological transformation, automating low-value, repetitive tasks with the attitude that ‘the old way is the best way’ no longer stands. Change brings improvement for employees, customers, and organisations.
- Align your technology strategy to better serve the organisation’s broader strategy. If a business wants to be seen in the recruitment field as an employer of choice, then offering an excellent employee experience is a very strong start. Focus on meeting their expectations by unifying, standardising, and streamlining their experience with technology on par with the most advanced tools available.
Self-service platforms allow employees to look after their own banking, address, and other personal details. It enables them autonomy in managing leave requests, record keeping, access to payslips, and more. All of this further frees up payroll teams to conduct high-value work.
Importantly, it also means payroll professionals feel more engaged in their work. Organisations who first prioritise their people will reap the rewards of an engaged, productive, and loyal workforce.
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