NATIONAL PAYROLL WEEK
The real impact of payroll
David Johnson, payroll & HCM implementation director at ADP UK, makes strong and persuasive arguments
N ational Payroll Week allows us the much-needed opportunity to evaluate the real impact of what is achieved every day in the payroll industry. Everyone knows that payroll has a direct impact – it’s how we all receive the wage to pay for things we need, and want. It was recently revealed that payroll contributes £4.46bn to the UK economy collected through income tax and National Insurance (https://bit.ly/2OFJVxv). The scale of the impact of the industry on the wider world is therefore highly significant. However, payroll is so much more than providing a payslip at the end of the month. If people are the lifeblood of an organisation, payroll is the heart. It keeps people moving, keeps them engaged in their role, and ensures business functions are properly supplied and business continues to pump forward. But more often than not, the real impact of payroll is overlooked. Employee engagement is the buzzword of the year, if not the decade, yet at its core workplace engagement is much more than flexible working offers and yoga classes at lunch. Employee engagement starts with trust, and there are few things as important to employees in building trust than ensuring they are paid the correct amount at the same time each month. Payroll is the default thing you need to do for each employee, and if you don’t have a good payroll system you won’t have the foundation you need to build employee engagement. It is a company’s equivalent to utility companies delivering electricity to the country; without it you can’t do much and everyone is disappointed. Much like what is shown through Maslow’s hierarchy of needs (https://bit. ly/2nY3jfd), payroll is the building blocks
of everything else. Maslow, an early nineteenth century psychologist, showed us what we all know to be true. Without basic physiological necessities, such as food and shelter, we cannot achieve the next rings on the ladder, things such as security, relationships and accomplishments. And without accurate payroll, you cannot get the best out of your employees or see them develop and bring in the results your company needs. If you want the benefits of an engaged workforce, payroll is the place to start. ...so much more than providing a payslip at the end of the month Payroll also provides insight into elements of a company’s missions, values and ethics. The introduction of gender pay gap reporting in April this year has been a particularly interesting development, providing insight into how companies reward different genders (https://bbc. in/2O3Qv3O). If you value diversity and gender parity in the workplace, there are few things more important than how companies reward their people. Linking to this, payroll can even provide insights into a company’s performance in the future, as research has continually shown that increased diversity will lead to improved company performance (https://ind. pn/2HbNivE). Payroll can also shine a light on ethics and progressive actions, such as the proportion of what the chief executive officer (CEO) earns compared to what the lowest paid worker brings home. For
example, estimates have shown that chiefs in the USA are paid about 300 times more than the average worker (https://bit. ly/2EfBoeA). Ice-cream extraordinaire Ben & Jerry’s used to try and counteract this by implementing a pay policy that meant CEO-to-worker pay ratio could not exceed a 5:1 ratio. Some management experts have similarly argued that the ratio should never exceed 20:1, claiming it can increase employee resentment and have a negative effect on morale. The employees at the lower end of the spectrum are also likely to be the ones doing the core day-to-day work and engaging customers and clients, so their engagement is still of key importance. Think about it from the other side, when you are the client with your suppliers. If they aren’t paying their staff properly, can you be sure you’re getting the best work out of their potentially disengaged employees? All in all, payroll is one of the core assets to the running of any organisation, from IBM to your local solicitors. It’s not a nice- to-have add-on, it absolutely has to happen. National Payroll Week is therefore a hugely important initiative bringing into focus something that is fundamental for everyone, whether they recognise it or not. Ultimately, payroll has to be something that happens easily, accurately and with no room for missed deadlines. While it sounds simple, we need to bring great talent into this industry to make this happen. Procedures may change with the onset of new tech such as automation or blockchain and there is a lot of opportunity in the industry. Payroll professionals have the opportunity to add increased value, upscale their role and develop their careers. All while doing the job that most needs doing in any company, anywhere in the world. n
| Professional in Payroll, Pensions and Reward | October 2018 | Issue 44 22
Made with FlippingBook - Online magazine maker