FEATURE TOPIC
regulatory changes or changes to internal human resources (HR) policy occur. If your team understands how payroll is calculated, this process can be completed with relative ease. Sheryl Steele: Challenges arise when there’s manual workload, or insufficiently resourced teams. So, when software providers release ‘clunky’ new features, adding to the already manual workload, and don’t release changes timely enough, it leaves clients feeling out of control. Payroll teams can often be expected to ‘plug holes’, working tirelessly to make up for inadequacies in a product or badly resourced teams, which can prevent issues for a short time. Relying on a great team alone isn’t sustainable when it comes to the quality of your payroll; it’s reactive, stressful and comes at a cost to the people at the end of the payroll process – the employees. Control over the payroll process is non- negotiable. It must be consistently strong, so any surprises can be managed effectively. You’ll never mitigate the curveballs – that’s just the beauty of payroll – but it’s imperative you have the bandwidth and are equipped to deal with them when they arise. To do this, you must have the right ingredients – a special mix of the people you recruit, the service providers you choose and having the right technology in place. Karen Thomson: Having robust payroll procedures in place is essential. However, having a flexible team who take change in their stride is also extremely important. Ensure you have a relationship with your software provider to enable those conversations to take place regarding timings of software updates and training on any new legislation. Having some tolerance with your software provider is needed here too, because if regulations change and they aren’t planned, it might mean you’ll have to wait for that all important development change you were looking for. How much should service level agreements (SLAs) dictate timings and deadlines between payroll providers and clients, and how tightly should they be worded? AL: SLAs are essential for the delivery of an optimal payroll service. They should detail the rights and obligations of the provider and the client, with clear wording
around deadlines and the data required at each point in the payroll cycle to meet all expectations. Of course, things go wrong sometimes, and the more detailed the SLAs the better, as appropriate mitigation plans can be implemented to resolve any issues. Any deviation from the SLA is a risk to the provider and the client, which can result in payment delays. LL: SLAs should be worded tightly to ensure there’s no room for ambiguity by either side, with clear deadlines and timings which have been discussed between the payroll provider and their client. The deadlines will be set to ensure payroll can be processed in time with the resources available. Some clients will try to push the boundaries and expect changes to be made after the deadline has passed. It won’t always be possible to accommodate this, which is why the deadlines are set in the first instance. From the client’s perspective, they should be able to rely on the SLA to expect the agreed level of service from the payroll provider and use this to raise any concerns where the service isn’t being provided as agreed. CP: Deadlines are synonymous with payroll and it’s imperative there’s a fundamental appreciation of this to avoid business failures. A deadline isn’t something we have flexibility to change when we need it. Although SLAs in respect of payroll services should have transparently worded deadlines that both parties should adhere to, it’s essential to remember that to make this an effective tool, it must be a collaborative effort. In my experience, many companies fail to agree an SLA with their payroll providers and unfortunately quickly realise why they can be so useful. It’s never too late to establish an SLA. SS: Pay day isn’t flexible. It’s rigid and accurate, on time, every time. So, SLAs and timetables, mutually signed off, are essential to the success of any payroll partnership. They’re two-way and should cover the client’s role with data provision and the service provider equally. The payroll window should be respected by both parties and regularly reviewed to ensure it continues to work for all involved. Adherence to it should also be an important metric captured, as late data leaving inadequate time to produce or
How can you mitigate for unexpected disruption, such as mid-year changes to regulation, so deadlines aren’t compromised? Ana Laiu: Although not all disruptions can be foreseen and prevented, if the department has good plans in place which are tested regularly, this should help with unexpected disruption. It’s also beneficial to have a critical process map, including only the essential processes which need to be completed to meet the core deadlines for paying employees and third-party liabilities. Liz Lay: Essential maintenance to the payroll system, an upgrade with a bug, unexpected staff absence – these are all possible occurrences the department is required to accommodate as and when they arise. Planning for pay to be processed earlier than the deadline is good practice, which then allows for any disruption, including any mid- year changes to regulation. Catey Palmer: It’s important to factor in the key external and internal risk areas. External risks include regulatory changes, but also note how economic, environmental and changes in global working patterns (e.g., changes in working hours) can impact the function. A way to mitigate risks is to spend time as a team clearly defining and documenting: l your processes l standard operating procedures l roles and responsibilities l your payroll technology engine. I’d also urge leaders to upskill their teams on technical aspects of UK payroll and explain how current regulations are practically implemented. Although we may strive for achieving payroll automation and rely on systems to calculate the payroll outputs, it’s important to be able to check the calculations are correct, particularly when This issue, Jerome spoke to: Ana Laiu MSc FCIPPdip, head of payroll, PPHE Hotel Group Liz Lay MSc FCIPPdip FHEA ACIPD, past chair of the CIPP Catey Palmer, global payroll consultant Sheryl Steele, head of payroll experience, PayCaptain Karen Thomson MSc ChFCIPPdip FHEA UK payroll director, Anderson Anderson & Brown LLP (AAB).
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| Professional in Payroll, Pensions and Reward |
Issue 90 | May 2023
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