COMPLIANCE
The role of payroll data in the people analysis mix
Chris Kirby, senior manager at LACE Partners, considers the importance of payroll data in conjunction with information human resource (HR) teams collect
B usinesses of all sizes and across every sector are increasingly aware that they need to do something about their people data. There are so many potential uses for the information payroll and HR now routinely collect, but few businesses are yet to take full advantage of the opportunities this presents. "It can feel as though it’s hard to keep up to date with the latest trends, but whichever technology you go for, the ideal scenario is that it’s all in one place, all accurate and all up to date" A shift in thinking from collection to intelligent analysis We’re seeing a real shift in the way that businesses think about people data – a shift that reflects a deepening understanding of its potential for strategic decision-making as well as for basic operational functionality. There are myriad challenges which are holding businesses back from making better use of their people data. These include but aren't limited to: l a lack of access to advanced analytics skills l the perception of risks surrounding compliance l finding reporting that actually works l understanding the different technology options l facilitating user adoption.
All about the technology? I’ve experienced a lot of fragmentation when it comes to technology, in terms of the industry standards, new developments and what’s used within an organisation itself. Analytics technology changes all the time, particularly with the addition of cloud-based platforms. It can feel as though it’s hard to keep up to date with the latest trends, but whichever technology you go for, the ideal scenario is that it’s all in one place, all accurate and all up to date. But when it comes to data from a payroll perspective, from an HR perspective or even from an overarching business perspective, is it even possible to access everything with one click? Often, it’s a question of going round to different teams to collect and collate. Understanding how payroll data is used Lots of businesses do, of course, collect loads of data but come to a halt when they’re asked what they’re doing with it. The answer often draws a blank response and there’s very minimal actual use of this data. Payroll data specifically and, from a wider perspective, HR data, should be used to support service management. Payroll data is about far more than a base salary and bonus. It takes in every metric linked to your people, including salaries, expenses and benefits, contingent costs (contractors, freelancers, consultants, etc), compliance information and strategic information surrounding market comparisons, the general economic climate and interest rates in key territories. As a core function of every business, regardless of its size and organisational structure, payroll data both draws on and feeds into all kinds of other data.
Based on the regular ongoing conversations we have with payroll (and wider HR) professionals, who we talk to daily, there are some common questions which persistently emerge: l how can I make sense of the people data we hold and gain credibility? l how can I use data analytics to make informed decisions in a cost-pressure environment that’s fighting over key talent? l how can we drive true strategic value via evidence-based work decisions? l how can I use this data to understand how best to invest in the employee journey and lower attrition? In other words, what’s the point of having reams of disconnected data that isn’t being usefully analysed?
Using people data to drive strategic value There are, of course, differing
considerations for both data collection and analysis depending on the size of the organisation. A small or growing business can use a single data set to make useful decisions about its future while a cross- border multinational is looking at a far more complex picture. Even prior to the pandemic, globalisation was becoming a significant challenge for payroll and HR in general. Organisations constantly asked themselves, just how do we ensure that employees working across disparate hours, days and shifts, and from different countries are managed coherently? Although there is absolutely an increase in the realisation that HR and payroll data analytics can be used in far more nuanced ways to improve business decisions and strategise for the future, the ‘how’ is a sticking point for some.
| Professional in Payroll, Pensions and Reward | November 2023 | Issue 95 24
Made with FlippingBook - Online magazine maker