TECHNOLOGY
Supercharging the payroll engine
RichardDutton, head of sales for Symatrix , reveals how some businesses are not getting themost from their HCMsystem
M any organisations have made significant investment in human capital management (HCM) systems, the equivalent of the shiny red Tesla of the human resources (HR) technology world, but when it comes to payroll many continue to run these super- slick engines like a ‘Mr Bean Mini’. They now have access to a high-quality payroll engine as part of their HCM application but don’t know how to access, configure and use it to deliver an operationally excellent solution. Instead, they often outsource payroll and struggle with off-system manual workarounds, data mapping, error- strewn reporting and resource-intensive administration. Maintaining the analogy, they are using a broom for an accelerator and sticking ropes round the steering wheel to keep on track. This situation is often reached because the payroll function is not embedded in the selection and decision process. By investing in high-value HCM and then outsourcing payroll, organisations tend to run into a host of problems. The businesses that provide the outsource payroll service tend to say: ‘just give us the HR data from your HCM tool and we’ll run payroll and make payments to your employees’. Unfortunately, though, they typically don’t ask whether the HR tool is set up to support the payroll process. This means that a less streamlined and inefficient solution is delivered, which is also typically more reliant on manual interventions. By simply asking for the HR data, the outsource provider generally leaves the pain associated with running
payroll efficiently with the client who is responsible for getting the right data in the right format but has no skill or mechanism to optimise collection. The outsourcer will typically not have looked at, addressed or helped with any of that HR flow, so the business will have to dedicate resource to the task of managing it. Moreover, because the service is disjointed, there is huge risk for the business. There is little or no governance, and the payroll the business thought it was outsourcing to manage costs is costing twice as much as it should and often riddled with risk of overpayments. This results in total cost of ownership increasing very quickly when accounting for the additional resources required and the cost of over- and underpayments, rework and ensuring compliance. With access to the right level of expertise and understanding, however, businesses can reconfigure their HCM applications to be one source of the truth for both HR and payroll. Properly configured, HCM systems should provide a single employee record with all relevant data so that both HR and payroll can use it as required. Unfortunately, many businesses don’t fully realise this is possible. Because they don’t fully understand what payroll needs from an operationally-efficient approach, there are still lots of manual services and activities going on. They will generally need the assistance of an expert partner to help them get better value from the systems and bring HR and payroll skills into the mix. The truth is that to gain full value from
a HCM solution, HR and payroll must operate in tandem in a single system. But just like a car needs regular servicing, so too will the solution need ongoing expert support over time. It’s also necessary to wrap together the technology, the right governance and the right operating model to ensure payroll continues to remain relevant and in line with requirements to get the optimum value. So, it is important to work with a partner bringing HR, technology and payroll skills together within a single system to drive operational excellence across the whole data process. The partner must know what great payroll looks like but must also be aware that an efficient payroll is a consequence of good HR. An HCM system needs to have quality HR data but it also needs to be carefully configured to support the business’s payroll requirements, which means that data from the HCM system has been captured correctly and is payroll-ready. Thus, businesses can have operationally- efficient payroll teams – who have been freed from administrative work – and are able to deliver a payroll which supports employees. This positive payroll operation contributes to employees’ financial well-being, including proactively telling employees when any arrangements are changing to avoid surprises. This proactive approach will also result in a cost-saving to the business because it will reduce calls into the payroll team when payslips are issued. In short, if businesses want a supercharged payroll engine – rather than a souped-up old vehicle – they need to know that buying a high-quality HCM system will not be enough. In order to reap the rewards, organisations must ensure their outsourced payroll is properly configured with HR – ideally provided and fully supported by a single supplier. n
...the outsource provider generally leaves the pain associated with running payroll efficiently with the client...
| Professional in Payroll, Pensions and Reward | May 2020 | Issue 60 46
Made with FlippingBook - Online magazine maker