FEATURE TOPIC
This issue, Jerome spoke to: l Karen Beckett BA (Hons) ChFCIPP, head of payroll and benefits, Dorset HealthCare University NHS Foundation Trust l Maria Mason MCIPPdip , partner, national payroll team / business services and outsourcing, BDO l Hannah Thorpe ACIPP , payroll development specialist, MHR l Clare Warrington MSc FCIPPdip AFHEA , chair, the CIPP l Jim Woodlingfield ChMCIPP , deputy head of service delivery – benefits administration, Surrey Pension Team.
How should you use data and information when approaching process improvements in a payroll department? Karen Beckett: When looking at process improvements, the reason behind reviewing the process is the important thing to bear in mind. Is there a flaw in the process or has a decision been made to look at a process in the hope there may be a possibility of improving it? The use of data will then support the reasoning behind looking at process improvements. If it’s deemed there’s scope for improvement, the first stage is to understand the current process, as well as looking at what the end result needs to be. Document the current process and this will start to show how it links in with other teams and if there’s any duplication of processes. Then, meaningful discussion can be structured to identify and implement a change. Maria Mason: Data is vital when determining areas for improvement, as without it, you could be focussing your attention on the areas of change which make the smallest impact on what you do. At BDO, we have made significant technology developments over the years around payroll systems and the surrounding tools, as well as introducing robotic process automation and artificial intelligence, etc, to help us achieve improved efficiencies and to mitigate risk for our clients. At all times, we used data gathered within the team (hours worked, number of payslips, etc.,) to help us prioritise those areas of change where we would see the most impact or which would reduce the highest areas of risk. Hannah Thorpe: Data serves as the compass for payroll process enhancements. Scrutinising data empowers finance teams to: l pinpoint inefficiencies l spot errors l track the progress of key performance indicators (KPIs). It also serves as an invaluable tool for budgeting and informing decision making, helping departments feed into wider business strategy. However, it’s important
data is used in accordance with the Data Protection Act 2018 and the General Data Protection Regulation (GDPR). There should be no breaches of data, taking care to remove and redact any sensitive information from documentation before publication. Clare Warrington: Payroll holds so much data which can be used to analyse trends and to provide critical KPIs so the organisation knows what’s working well and what’s causing problems. When looking at improvements in payroll, this data is critical as it will help prioritise change by looking at volume problems and quick-win improvements, which are small, usually low cost and quick to implement. Jim Woodlingfield: Payroll and pensions are data-rich areas of the business, and we’re used to analysing data and checking the validity of our records. This can inform our approach to process improvements by allowing us to target the areas where our highest work volumes, error rates or compliance issues occur. I use the Pareto Principle (80/20) rule in approaching improvements. (The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes.) Is it the case that often, payroll teams only review procedures when things go wrong? KB: Invariably, payroll teams will look at reviewing processes when things go wrong. However, as efficient and effective productivity is now being highlighted, this is an opportunity to look at all processes, not just within payroll teams, but across all teams which have an impact on the employees’ experience of working for an organisation. All organisations should try to reduce duplication and look at how technology can help teams to increase productivity and accuracy. MM: Payroll is consistently fast paced, with little down time to independently review opportunities for improvements and change, so unfortunately this can often be the case. Strong performing payroll teams will regularly review their procedures and processes to ensure they’re mitigating risk and streamlining their processes to
introduce further efficiencies, often using KPIs to help measure performance. These teams will likely have dedicated individuals focussed on technology and operations to ensure the areas of change are seen as a core priority and carried out continually, not just when something goes wrong. HT: Historically, finance teams have taken a very reactive approach to payroll. But the tides are changing, and digital transformation has facilitated a pivot towards a more proactive approach. For example, any potential errors would typically have been identified at the end of every month, but technology now enables departments to review payroll in real time, providing the visibility teams need to spotlight and address errors as and when they occur. A proactive approach ensures a smoother overall process for payroll professionals and payees. At MHR, we review our processes annually to ensure they’re kept up to date. CW: Payroll professionals will look to solve the issue as quickly as possible and then move onto the next problem. However, this is where root cause analysis is required. This analysis will help payroll to understand what has gone wrong and what changes need to be implemented to mitigate the risk of this issue occurring again. JW: It’s certainly an observable trend that where things go wrong, procedures will be reviewed and often changed as an outcome. This is an inevitable part of the payroll and pensions role as a business- critical process and should be expected. When the service can rise above this and explore near misses and potential future improvements, it’s a way of getting ahead of the curve and showing added value to decision makers. This is often linked to the software lifecycle, with implementation leading to new features and new risks. Once the software is fully embedded, the governing processes will tend to be static unless new issues emerge. It can be helpful to engage with the software provider to keep abreast of any improved options which could be helpful to your organisation.
39
| Professional in Payroll, Pensions and Reward |
Issue 96 | December 2023 - January 2024
Made with FlippingBook - Online magazine maker