Professional December 2021 - January 2022

Feature topic - how payroll can make a strategic contribution

would be a major culture shift in the world of business. Ian Hodson: I really do think that the term payroll has a certain unconscious set of associations attached to it, which may not be relevant anymore and hold back the profession. Perhaps this is why personnel departments became human resources (HR) and are now being rebranded as people and performance; it is part of transition to form a new identity. I am a huge ambassador of our profession being individuals who can influence and deliver impact, but we always seem to have to shake off the operation reputation, which forms the invaluable business understanding of our career pathways. I do think the label of ‘reward’ is the short-term solution to this, and it does conjure up a different set of responsibilities that move away from transaction processing to supporting recognition, well-being, engagement and motivation agendas. Samantha Johnson: No. The label of payroll is key to give people an accessible language to understand a bit about what we do as a function. It is also an all- encompassing term, including in-house, bureau, payroll as a service etc., which helps identify us as a sector. Operational payroll is also what gives the function its strategic capability. Having a detailed insight into the terms and conditions of employees and clients, processing pay regularly and being able to analyse and understand the data trends gives payroll its unique selling point. Operational and strategic payroll activities should work hand in hand, using the operational knowledge to identify and deliver meaningful change into the business. That is how payroll makes a strategic impact. How can payroll support wider HR practice principles and values? JD: Mental well-being as well as physical health well-being is now typically a board- sponsored initiative. Greater productivity through increased engagement is a proven benefit of rewarding employees. Looking after employees to ensure both health and well-being solutions are offered to support a work/life balance and investment in themselves reaps rewards for the business in multiple ways. Increased productivity, improvement in

staff engagement and retention are just a few of those to be considered. HR may hold the strategic responsibility for how those initiatives are deployed and payroll has a vital role to play in ensuring key data for review is made available. For example, there may be targeted communications to a particular department or group that payroll holds key data on in terms of absence, leave taken, overtime worked, attrition etc. When this is collectively reviewed, it may highlight an issue or area where performance needs to be assessed to provide the respective managers with support. I am a huge ambassador of our profession being individuals who can influence and deliver impact EG: I respond to this question with a question – what are the HR values and principles? Payroll know theirs, e.g., to pay people on time and accurately. There are so many facets to HR, e.g., HR generalist, people management, employee relations specialist, and I would expect the values to be slightly different depending on the area they work in. IH: I think payroll is a critical partner and cog to many successful initiatives and implementations from a people perspective. We should never forget that in more challenging financial times of austerity, payroll can help spread payments and support short-term loans if individuals need to pay for visas, wish to undertake development or pay for season tickets. Helping individuals be savvy savers through workplace payroll vehicles like individual savings account schemes can help manage financial well-being and the intrinsic links it has with mental health. In respect of values, the ethical stance of organisations still needs to be more transparent and visible. Payroll giving to charities, facilitating electric car schemes and cycle schemes, and communicating the ethical investment of the pension schemes can all help underpin the organisational values. We should also never forget the ‘trusted voice’ of the

payroll team as a communicator across the organisation. SJ: Payroll is a people-facing role. Whether working with clients or employees, you have to deliver guidance, support and information in an accessible, customer- focused way. Many of the underlying payroll values already align to HR practice principles. However, some businesses do this better than others. Where payroll is working alongside an HR function, it’s important that employee lifecycle processes are designed as a single process with multiple stakeholders. Often, problems occur where processes are drawn up in isolation within functions, creating barriers to communication and efficiency. Where payroll and HR work with each other well, these teams often deliver the most exceptional service. Can payroll operate as a profit centre and, if so, how? JD: In several ways. If a business reviews each of its functions and determines there is a service that could be sold at a cost to its internal customers, that provides a budget for the team to work to. This could be by payslip produced, for example, which is then charged each period to the cost centres served. Additional charges may be agreed for other activities, such as calculations outside of the system. I have seen this exact model work in a large private sector organisation. In a number of public sector organisations, the investment in an in- house team has then been supported by that team offering services on the platform used to other businesses in the area, or other public sector organisations. This creation of a commercially focused team can then generate genuine growth and return for the organising body. EG: A professional service provider generates profit as a standalone business. In-house, I struggle to identify how payroll could be a profit centre, unless they provide services such as e-payslips and troncs for external business partners. Internal payroll is generally a necessary but significant cost to business; however, the specialism should ensure compliance to legislation, saving the business from fines and penalties. IH: As with many functions, we always look at payroll as an overhead, without looking at the potential cost savings it helps make. That may be through salary

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| Professional in Payroll, Pensions and Reward |

Issue 76 | December 2021 – January 2022

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