COMPLIANCE
Payroll’s true strategic value
Ellis Rees FCIPPdip, strategic account director (UK and Ireland) – ADP discusses how payroll can start to display its true strategic value to the wider organisation
S hirley Chisholm, the first black woman to be elected to the United States Congress, said, “If they don't give you a seat at the table, bring a folding chair.” Those of us who work in payroll understand the value and importance of what we do. Our main objectives are always to pay our employees accurately and on time. Away from this necessary requirement, there’s been a need to focus on other areas within payroll. We need to now start to explore how the function fits into the overall strategy of a department or an organisation. In context The ‘Oxford Languages’ defines strategy as, “a plan of action designed to achieve a long- term or overall aim”. In the case of a department or organisation, the strategic goals are, therefore, the department’s or organisation’s long-term or overall aims. So, why is payroll such an important part of an overall strategy for organisations? CIO Dive’s ‘ The business technology priorities of 2020 ’ report stated that, “With Covid-19, 66 per cent of decision makers turned their focus to cost optimisation, while 34 per cent prioritised operational
efficiencies.” Quite simply, in most organisations, the ‘payroll bill’ or payroll expenditure will be one of the highest costs. There are also added complications, including: l legislative requirements l indirect costs l staff on-boarding l benefits management. The list could go on and this all feeds into how well an organisation can function or meet its strategic goals. Added to these are environmental factors which can, and have, impacted organisations recently: l Covid-19 l The cost-of-living crisis l high levels of vacancies / low unemployment l changes to government policies.
payroll professionals, it’s very clear to us what we do, but this may not always be heard or seen within the wider business. Historically, payroll tended to be a very quiet department. However, it deals with one of the largest costs to companies, and the work it carries out has a huge impact on an employer’s relationships with its employees. To help in understanding the benefits your team gives, it’s important to list the activities your team performs which add value to the company. Some examples could include: l the control and management of a large chunk of a company’s operating costs l ensuring accurate levels of service l keeping the company compliant with current legislation, audit or quality requirements l ensuring payments to third parties are made on time l guaranteeing access for employees to their payslips, P60s, timesheets, etc l assisting with audits l working with software providers on upcoming legislative requirements l working alongside other departments within an organisation to provide a service l underpinning every single engagement activity by accurately paying staff. I’m sure, while the list could continue for several pages, this gives an overall feel of what the payroll department does.
Which benefits can your department offer to your business strategies?
In the ADP ‘ The potential of payroll: global payroll survey ’, it was reported that, “97% of those surveyed see payroll information as a major consideration in cost management strategies and 87% see it as a fundamental part of their commercial and growth strategies”. This may sound strange, because, as
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 28
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