Feature topic - Strategic payroll
...The responsibility of payroll goes far beyond the number- crunching and administration tasks...
In what ways is the payroll function working strategically with other closely related operations such as finance and HR? KB: Payroll has always worked closely with finance and payroll. But payroll is leading the way, and beginning to lead projects to ensure that payroll maintains integrity and HMRC compliance. The value of the whole reward package is now dominant rather than just the pay value, and payroll is now working with colleagues across the whole organisation to support employee health and wellbeing. LG: There has been a major shift from HR’s more traditional function of tactical management of employees to the development of strategic insight and the creation of best practice and value. Technology helps to provide a single, consistent HR experience for all employees, regardless of where they are located or how they access the system and all these things allow for an engaged and empowered workforce. Payroll should be the basis of an immense amount of data, chronological and geographic, demographic and functional, from which can be derived a wealth of information and insight. Payroll trend analysis and analytics could provide entities with a tangible competitive advantage, underwriting the best-informed decisions. MS: At SUEZ each of these functions work in unison to ensure their policies and procedures meet current requirements as well as compliance. Our HR team works closely with payroll, identifying areas that need to be adapted to ensure company goals are met. We have been working on a transformation project for the last twenty months, which has involved working closely with operations, HR and finance to consolidate data, share best practice and reduce duplication of activities. This involved mapping out ‘as is’ and ‘to be’ procedures and remove all waste processes that did not add value. Successful projects like this build our department’s reputation and instills trust. ST: Often, payroll is the single largest expense for an organisation and as such the collaboration with finance strengthens financial reporting and tax compliance – both of which are normally the responsibility of the finance team. With the large amount of payroll-related
legislation that impacts HR – such as how employee benefits are treated in different countries – now more than ever payroll needs to be working with HR to ensure that the global benefits an organisation is considering are both correctly reported and that they would indeed bring real benefits to a global organisation. Providing feedback to both HR and finance teams on trends that payroll is able to view from the large amount of data that they hold is key to ensuring that an organisation is making the informed decisions. Should payroll be represented at board level, and if so, why? KB: There does need to be a representation at board level for payroll. People are the most important asset for an organisation; likewise, pay is usually the highest expenditure and both need to be looked after as well as understood. Understanding people and pay can support a company in improving output and efficiencies. Payroll will have the underlying knowledge of the link between people and pay. However, I don’t feel representation necessarily needs to be in person. Providing there is a strong director-level connection who can fully represent payroll and communicate with payroll, there does not need to be a payroll director. There are ways in which information can be bi- directionally communicated and providing these links are strong, representation at board level should be achieved. LG: The pandemic has shown the world of business something that all payroll professionals knew already: we have a vital role to play with the economy, and business is reliant on the payroll function. We must elevate our status to the boardroom and become equal to our finance colleagues. With the function of payroll continuing to evolve, it is now the time to stop seeing payroll as an offshoot or bolt-on to the HR or finance function and instead look at giving payroll a stronger voice. MS: I don’t necessarily believe payroll needs a seat at the board table but it certainly helps the business when payroll is consulted or asked to provide information that helps facilitate the conversation and helps influence decisions being made. ST: Payroll should definitely be presented
Payroll data has a greater role to play within organisations, empowered and enhanced by technology, helping to provide better insights into HR (human resources) and payroll so teams can have a greater understanding and act accordingly. Michelle Sutton: Payroll has played a more strategic role in a lot of large organisations for years now. Payroll is far removed from how it used to be. There are so many complexities to it now, with ever-changing legislation. And with the introduction of benefits and opportunities to payroll benefits, the payroll and reward managers are now consulted often prior to decisions being made because they have the technical understanding of how to implement and operate new initiatives. There’s more awareness of the challenges payroll departments are faced with when looking at the national minimum wage and the introduction of the living wage, as they are responsible for interpreting the legislation, and their first challenge is to understand the category of workers they employ. This is certainly not easy. Sharon Tayfield: Employee experience – with regards to how they are paid and their interactions with payroll – is becoming an important metric for many global organisations. Payroll has a strategic role to play in ensuring that employee experience is positive. Employees are becoming accustomed to technology that provides them with the ability, on demand, to determine their benefits and access other key payroll information. Payroll may therefore be required to consider automation, cloud solutions or even on-demand pay, which is gaining momentum in some regions of the globe.
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| Professional in Payroll, Pensions and Reward |
Issue 65 | November 2020
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