3 Payroll Pain Points—and what to do about them

15 August 2017

“When we sit with Payroll and HR Professionals, there are many situations that cause them incredible stress. Individuals and departments are overloaded, exhausted and motivation is low. They barely get through daily ‘admin loads’, which stops them focusing on innovative and creative ways to improve efficiencies etc.” – Outsourced Payroll Solutions

It is an exhaustive list, so OPS have reviewed the top 3 pain points:

Keeping to agreed payroll calendar deadlines: this is excrutiating. A calendar is agreed months in advance, but submissions like monthly variables etc., are given through late. The impact to employees being paid on time and the accuracy of payments and management reports is compromised.

Suggestions:

  1. If a comprehensive calendar has not been circulated previously, compile one for a minimum of 6 months in advance. Consider several factors eg salary payment date as the ‘goal’; whether a payment date falls on a weekend and needs adjusting; plot in public holidays (add global dates if other countries’ input affects payroll); all data required; which department/person is responsible for submitting that data etc. Consider a face-to-face meeting to discuss the schedule and consequences of deadlines not being met. Month 1: test results and adjust calendar. Month 2: the calendar must be followed. If any person does not submit according to deadline, email ‘offender’ after the cut-off date, and advise them that necessary adjustments will be made in the following payroll run. Do not issue this as an idle threat, follow through.
  2. Warning – brace yourself as this may seem brutal! If a calendar is already in place but not being followed, take action. One month prior to taking this action remind relevant staff that calendar deadlines are mandatory. Enforce target dates detailed in point (i) and confirm adjustments will be made in the following payroll run.

Confidentiality: in every organisation, whatever the size, payroll confidentiality is critical. This applies to both employee and company data. We heard about a staff member who repeated to a colleague what a peer was earning. It caused enormous problems because the peer was earning way above the norm for staff in that department. In another incident, the person responsible for the payroll disclosed to others what packages senior management were on. The offender was dismissed immediately, but the confidentiality breach had devastating effects.

Suggestions:

  1. Stringent background checks when hiring payroll staff
  2. Conduct confidentiality training
  3. Have staff sign a confidentiality agreement (email us for a template if you need one)
  4. Restrict and assign access to specific tasks using encrypted password protection
  5. Ensure printed document hard copies are stored in a secure location, with restricted access
  6. Payroll staff to be located separately from other staff members
  7. Consider outsourcing the processing of the Executive segment of the payroll

Accuracy: mistakes, unreliable information and data being submitted after deadline cause stress for payroll specialists. Whatever the reason, it impacts salaries being paid on time and often results in having to make adjustments on the next salary run. Consequences include incorrect reporting and having to recover overpayments from employees. All part of a vicious pain cycle.

Suggestions:

  1. Ensure skilled, knowledgeable, dependable staff are employed from the outset
  2. Training for all involved in the payroll process. Payroll, HR and other departments
  3. At the very minimum put procedures in place like a payroll calendar, set up Excel spreadsheets for automatic calculations; implement a QA process where senior staff check colleague’s work etc.
  4. Ideally install a reliable software solution (If you prefer to use the OPEX budget, consider outsourcing the entire payroll)
  5. Track monthly errors – what they are, ‘trends’, whether the same person is making the mistakes and plan how they can be avoided in future

What are YOUR payroll pain points? Share them with us and we will get back to you with solutions.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *