REWARD
W orking on a project is great you get together with others and see the contribution that your work makes to different areas of your organisation. Payroll professionals used to be thought of as the Cinderella of the finance world, providing an end-of-the-line administrative function, but now, through the power of technology, they have been transformed and can be all-consuming, but the real magic happens when into fairy godmothers, waving magic wands over the very data they process and turning it into valuable information about the most important part of any business – the staff. The reports generated by payroll can: l evidence compliance with employment and tax legislation l provide insights into employee productivity and performance l support with recruitment and retaining staff.
employees, employers and also for the UK economy. At an organisational level, by working together with senior management, payroll can provide evidence of compliance with employment legislation, such as gender equality pay, holiday pay, national minimum wage and absence pay and leave, and of course, compliance with all of the other legislation that applies to employment pay including tax, National Insurance contributions, the Apprenticeship Levy and pensions. All of these are hugely important for the organisation’s reputation. making strategic decisions related to recruitment, retention, budgeting and resource allocation” Payroll data Just as important though, is the data generated by payroll which is a goldmine of information that can provide valuable insights into workforce dynamics, such as how much overtime is being worked and when; the level of staff absence and the reasons for it, and staff turnover. Analysing payroll data can help management understand labour costs, including the impact of staff training for employees and for businesses; it can identify trends in employee turnover, and consider whether career progression is part of that; it can help management understand the impact that sickness and injuries can have on the business, and gauge the effectiveness of occupational health strategies. All of these factors help organisations to critically consider their productivity and performance levels, which in turn will feed into how employees are rewarded. Payroll data is pivotal in making strategic decisions related to recruitment, retention, budgeting and resource allocation. It should never be overlooked that employees are people, not just statistics, and they are at the heart of any business or organisation. A happy employee “Payroll data is pivotal in
is one of the best advertisements an organisation can have.
A picture of productivity Employers know that potential employees look at many factors when considering where to work, not just benefits and salary. They also want to know how family friendly the business is, what prospects there are to progress and what protections their employment contracts afford them – after all, choosing to work for an organisation is a big decision. Flexible working arrangements will be very important to employees with caring responsibilities and, as the Employment Rights Bill proposes, this will be a right for individuals from the first day of employment. Therefore, it is important that employers understand how it will impact their organisation. An analysis of payroll data will help employers to build a picture of productivity to understand what their business can offer. The payroll process supports employees from the day they start work until they leave or retire. It is there throughout their apprenticeship or other training, when they have a family or are ill, and it helps your staff to save for retirement. By working strategically with management, payroll can help to showcase an organisation’s employment credentials and values, from equality of pay to flexible working policies; it can highlight trends in working hours and absences and measure the success of strategies used to improve performance and attendance. It is also at the heart of compliance with employment and tax legislation. We are in a period of transition, moving from a place where a lot of payroll data was kept apart on different systems or on a spreadsheet on someone’s computer. The data was two dimensional and going nowhere. Now payroll software systems can crunch all of the data that is collected for each employee and with the flick of a wand, generate meaningful reports for senior management strategic decision- making. Payrollers have always had to understand a wide array of employment and tax legislation. Analysing the data they use and produce makes the data three dimensional and dynamic and puts payroll right at the heart of compliance, productivity and staff recruitment and retention. n
Employment Rights Bill This article explores how payroll can play its part in driving business
success following the publication of the government’s Employment Rights Bill (see https://ow.ly/gLYk50U4ats). The government’s view, as expressed in its press release, is that existing employment practices are not helping to deliver the economic growth the country needs and the Bill “aims to boost pay and productivity with legislation fit for a modern economy”. The Bill proposes more than 28 separate reforms, including the right to bereavement, paternity and parental leave from day one; widening the eligibility for statutory sick pay and reducing the waiting time before sick pay begins; protecting employees from unfair dismissal from day one and banning ‘exploitative’ zero hours contracts and ‘fire and re-hire’ practices. While the work of implementing many of the reforms will start in human resources, data to understand the cost implications will be generated by payroll. As any changes will ultimately be administered within payroll, the proposed new enforcement body, the Fair Work Agency, will look to payroll data reports to ascertain if the new rights have been breached. These reforms and all the subsequent discussion following the publication of the Employment Rights Bill, highlight the pivotal role that payroll plays for
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| Professional in Payroll, Pensions and Reward |
Issue 106 | December 2024 - January 2025
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