Why payroll is essential in every business
The great resignation is not a myth. Whether your company offers free gym membership or enjoyable company outings in a bid to encourage loyalty and show appreciation, one thing is for sure: it is imperative that staff are paid correctly and on time.
It can sometimes feel like payroll is misunderstood. The importance of payroll for both employee wellbeing and company reputation cannot be downplayed and getting wrong can lead to huge implications. Payroll generally runs in ‘stealth mode’, as there are many complexities to the day-to-day management of payroll, and the teams responsible don’t often get the credit they deserve. As long as employees are paid correctly, no one probably knows what happens behind the scenes to keep the cog turning.
Therefore, to celebrate National Payroll Week I want to shine a light on the payroll teams across the UK that keep the cogs turning and keep employees happy and paid.
A litmus test
In many ways, payroll can act as the litmus test for organisational stability. This is especially important during the economic uncertainty of the past two years. A disjointed, error-ridden payroll process can seriously hinder an organisation’s speed to market, undermine growth strategies and impact revenue targets. It is not the place to be. Errors have implications on employee morale, company finance, and possible legal challenges too. Wrong pay calculation resulting in overpay to a terminated employee may result in loss to the organisation, and inaccurate calculations in statutory payments like Tax and National Insurance can lead to serious problem with authorities.
On the flip side, if a business has a payroll team it can be confident in and ensures payroll runs happen accurately and without delay, the business can start to augment it with some genuinely exciting processes.
The power of payroll
Effective and accurate payroll has the power to unlock processes within businesses that can keep it moving forward. Just what the business drivers for change have done, however, differ depending on the size of the company. The recent CIPP’s fourth Future of Payroll Report, uncovered what payroll professionals identify as current trends and how they felt they will develop in the future.
Perhaps unsurprisingly, almost three-quarters (71%) of respondents said that flexible or remote working has been introduced to their teams since the pandemic. They expect this trend to continue, with 74% of respondents foreseeing a permanent hybrid model in the future. There is no doubt that an agile and flexible working environment is more common than ever before, with many employers trialling a 4-day work week as part of a pilot programme launched by the 4 Day Week Global Foundation.
Times are changing
Of course, times are changing within businesses. There has been a large-scale uptake in hybrid working models in the past two years. Whilst for most companies, it was introduced due to necessity during the lockdowns of 2020, many have since adopted the practice permanently after realising the benefits that came with it.
Payroll departments have encountered a period of rapid change, bringing with it new challenges and changing legislations. It has been particularly challenging during pandemic years when many Government actions were acted through payroll across the world.
There will be a lasting impact of the pandemic on payroll professionals, not least of which the continued hybrid way of working. Whilst most of the payroll professionals we speak to say they are more productive when they work from home, many concede the difficulty of maintaining an effective work-life balance. There are also challenges thrown up for payroll when working from home, like training and onboarding new joiners, which can be difficult as there is a steep learning curve involved. Organisations need to be cautious about data security when confidential payroll data is being processed from multiple homes, adding more responsibility on the payroll professionals as well.
A dynamic industry
Whatever the future holds, payroll is a dynamic industry that needs to react to ever changing priorities and demands. Whether that be the changing needs of the business, shifting legislative rules or the need to maintain compliance knowledge. So much so, that almost two thirds (64%) of respondents to the CIPP survey said they’d been involved in decisions regarding the implementation of compliance strategies in the past 12 months.
Technology is also constantly evolving and shapes the way payroll is being done year on year. The variety of solutions on offer have a huge impact on efficiency and costs. The good news is that payroll professionals are being listened to. In fact, over half (56%) have had an influence on decisions regarding which payroll software to use, or which communication channels work best for the team.
The perfect blend
From ensuring that hybrid workers get paid on time and correctly, to having to process the payroll remotely, payroll teams up and down the land have had a lot to contend with these past couple of years. However, all too often businesses are driven by people who do not know payroll or understand the profession. Now is the time for business leaders to recognise the value of their payroll teams and show their appreciation for the work that payroll teams have been doing to help the business throughout the pandemic.
Payroll is essential to a business of any size. When done correctly, payroll can go un-noticed. This needs to change. Payroll is an exciting industry that can be the perfect blend between technology and expertise. As such, it should be viewed as an attractive and secure career choice for graduates and beyond.
By Sirsha Haldar, General Manager, UK, Ireland & South Africa, ADP
Note: I have included link to CIPP website as report hasn’t been published externally yet.
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