COMPLIANCE
at the table at board level. Payroll is often the single biggest operational cost for a business. The responsibility of payroll goes far beyond the number-crunching and administration tasks.
We have seen a vast amount of legislation over the last five years
globally which directly impacts payroll, not forgetting data protection legislation. The global pandemic events have also seen vast changes in legislation, covering statutory contributions in terms of the timing of payments and the calculation of contributions. Payroll departments are therefore dealing with more complex matters than ever before and its voice at board level is becoming a necessity – especially when decisions regarding global expansion are being made. Payroll is also the holder of a range of data that can assist boards in making informed decisions. In what ways do you see the role of payroll growing strategically within organisations? KB: Payroll is in a strong position as a result of the pandemic. Organisations have recognised payroll teams as key workers and the profile of payroll has increased. I believe payroll is being seen as the ‘go to’ place for information, as payroll has a strong database that is possibly more accurate than that of other teams due to the nature of the work. Going forward, the payroll team will move significantly forward into being a reward team so that everything is in one location. Compliance being an important factor for organisations will mean that payroll will support organisations with HMRC legislation as well as terms and conditions of service. Health and wellbeing of employees is also a prominent focus and therefore the support payroll teams can give regarding financial education of pay will also be a strong focus going forward. LG: Done well, the payroll function is invisible due to its professionalism and diligence, yet it represents a huge percentage of a business’s expense.
Payroll is an important function in ensuring morale, reputation and legal compliance are upheld. MS: I see payroll growing strategically when involved in providing business information dashboard matrix data, which will highlight true employee costs and trends within the business. ST: With the amount of data at hand, payroll departments can analyse that information and identify trends and patterns within an organisation. Payroll can then make recommendations for improvement and bring new insight into decisions that organisations face on a day-to-day basis. A happy workforce translates into a workforce that achieves the business targets. Should payroll be considered as part of an organisation’s ‘reward’ operation or does that detract from the unique nature of the function? KB: For me, payroll is already part of the reward operation by covering pensions, staff benefits and expenses. The reason for this is the close interaction between each component of the reward package. The total reward statements for individuals detail the full reward package, clearly showing the link between them. It is reward that is the unique function and payroll is part of that function. How the function will develop in the future will be interesting to see as I believe the payroll and reward industry is moving towards being formally recognised as
requiring experts in each aspect, with a career pathway. LG: The term reward generally covers the financial requirements made to attract and retain employees. They can include cash payments as well as the wider benefits package, for example pension provision, annual leave, car allowance and bonus. Payroll and the reward operation are very different, and if we are to continue raising the profile of payroll we need to establish payroll in its own right to be equal to our tax and audit colleagues. We are compliance champions – ensuring compliance is a fundamental of the role that we do and we need to be more proactive in celebrating our successes in our own right.
MS: The payroll, pensions and HR systems functions all report to the
head of reward at SUEZ recycling and recovery, and I believe this works really well. Personally, and talking from my own experience, I believe the reward role is intrinsically linked to the payroll function; it’s key to have a level of expertise and technical understanding to ensure compliance and also for the board to have confidence that their business, in terms of employee remuneration, is in safe hands. ST: Payroll can assist reward teams in achieving the optimum reward package for an organisation from a cost perspective. Any reward package needs to meet the business objectives and the sector norms, but at the same time be tax efficient to ensure that employees take home the maximum that they can. Therefore, payroll certainly has a role to play within an organisation’s reward operation, but I would not see it as being reporting into the reward function. n
...reward role is intrinsically linked to the payroll function; it’s key to have a level of expertise and technical understanding to ensure compliance...
| Professional in Payroll, Pensions and Reward | November 2020 | Issue 65 24
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