Processing payroll is perhaps the most ubiquitous aspect of any business. Ensuring employees get paid accurately and on time is an integral, core function of a successful organization. Despite this essential value, too often payroll is seen as merely an administrative component of running a business. While great effort may be taken to ensure compliance while processing payroll quickly and without burdensome expense, the broader, more strategic power of payroll is often overlooked.
Industry leaders worldwide have begun to realize the full potential of payroll, especially as payroll managers leverage exciting advances in human capital management (HCM) technology. Payroll data can be used to paint a more robust and comprehensive picture of a company’s workforce. Powerful reporting and metrics can provide decision-making tools to drive growth. And that’s just the beginning. Transitioning payroll to a more strategic function can increase employee satisfaction and boost productivity company-wide.
A unified, cloud-based HCM solution empowers payroll teams to prove their critical roles as part of organizations’ overall strategic visions. By streamlining inefficient or outdated processes and automating workflows, payroll departments can free up resources for strategic tasks. Centralized storage in the cloud enables role-based, anytime access, while providing privacy and data security. Real-time business intelligence tools harness pay trends to offer illuminating insights for budgeting and cost reduction. Alongside these and other strategic capabilities, a best-inclass cloud solution also facilitates more effective communication between payroll managers and employees.
Unleashing Your Team’s Potential
It’s not uncommon for payroll managers to find themselves spending a majority of their time on administrative tasks, with strategic contributions only considered as time permits. In many cases, this is an unavoidable reality imposed by archaic software or payroll-data-management systems. Errors, omissions and duplicate data entry can cause more than just headaches: they frequently result in hard-dollar costs and keep payroll staff from spending time on strategic goals. So, the first step toward a more strategic role is often to employ a new solution that streamlines these inefficient practices and frees payroll managers from the burden of manual administration.
With HCM delivered via the cloud, all payroll data for your entire organization is collected in one place and remains accessible at any time, from anywhere. In conjunction with centralization in the cloud, role-based web access enables each employee to find the right information at the right time, without contacting payroll or HR for assistance. This organizational change in data structure can relieve payroll managers from the stress and wasted time of hunting down necessary data for their employees. The cloud also ensures that technology serves the schedule of both your payroll department and your employees, rather than the other way around.
In addition, a high degree of automation can revolutionize workflows and transform payroll processing from a plodding task with frequent interruptions into a hassle-free activity measured in hours and minutes instead of days. Cloud-based solutions also have the distinct advantage of being paperless, reducing administrative waste even further.
Streamlining these administrative processes through cloud-based HCM is the first step toward facilitating the essential strategic role payroll can play in your organization.
People-Powered Payroll
Unfortunately, many companies take the people-centric aspects of payroll for granted, considering it to be concerned only with data accuracy, cost and regulatory compliance. This view ignores the vast capabilities of payroll to enhance employee satisfaction and engagement while fostering greater communication throughout the workforce. Payroll is a business function that affects every single employee in an organization and evaluating the ways in which it can enhance employees’ day-to-day experiences is a valuable endeavour.
Role-based access to key pay information (e.g., T4 forms and direct deposit setup) empowers employees to control their personal data. Streamlined workflows enhance engagement by reducing crossed wires in communication on payroll tasks. Best in-class HCM can enable hourly employees to clock in and out for time collection from anywhere—even on mobile devices— creating a sense of convenience and ease of use not typically associated with payroll.
All of these qualities that contribute to employee engagement help payroll teams emphasize their value beyond data administration, aiding in the transition to more goal-oriented business functions. A people-centric focus in payroll can ripple throughout an entire organization, ensuring smoother communication with the executive team and shifting managers’ priorities toward a strategic mindset.
Payroll data can also be utilized creatively to offer strategic value to an executive team. While many companies consider the information collected by payroll to be little more than the nuts and bolts of each employee, payroll can be used at a high level to create a complete view of a company’s human capital. Every data point, from salary ranges within each department to average RRSP contributions, can contribute to a strategic overview of the total workforce. In fact, recent advances in analytics technology have enabled some unified HCM solutions to leverage payroll data as a key component in predicting employee retention.
From Reporting to Strategic Advantage
One of the most effective ways payroll can contribute strategically to a company’s overarching goals is by taking advantage of potent business intelligence tools to provide insight to the executive team. A vast array of payroll-reporting metrics grants your organization unprecedented analysis of internal trends, assisting executives in making decisions backed by hard data.
Payroll managers can create and offer strategic reports that focus on departmental or company-wide factors and answer key questions for maximizing efficiency and growth:
- Are your processes as streamlined as possible with the resources available? Analyze the ratio of payroll professionals to total employees, or report on how many are taking advantage of beneficial services such as direct deposit.
- Is your company experiencing an unusually high number of compliance issues? Check for fluctuations in the number of tax penalties or payroll changes after processing.
- Are all of your salary projections within budget? View year over-year trends in overtime pay, or compare salary ranges between teams. The tools found in comprehensive HCM solutions can even cross-reference these trends with relevant HR data, such as turnover and retention rates.
In adopting a unified, cloud-HCM solution, your organization can gain access to a wide variety of features and processes to help realize an increased business impact of payroll. Payroll professionals can be the strongest advocates regarding these resources, facilitate an atmosphere of engagement within the entire workforce, and secure their positions as irreplaceable components of their companies’ strategic business plans.
This article is adapted from Dialogue Magazine, a benefit to members of the Canadian Payroll Association.