01 December 2021
Daniela Porr, senior product marketing manager at Workday, talks through how payroll professionals can play strategic roles within organisations
Mathematician Clive Humby originated the idea of data as ‘the new oil’ in 2006. Certainly, the ability to collect, collate and analyse data has had a massive impact on all our lives in the 21st century. And, while traditionally payroll is mostly seen as a transactional function, it’s arguably sitting on a goldmine.
Clearly, payroll touches everyone in an organisation, which means its data can tell leaders a lot. Payroll professionals can play a strategic role in their organisation by unlocking that information to guide decision-making.
Sitting at the heart of the business
Digitising payroll – and unifying the data with the rest of human capital management (HCM) – allows in-depth analytics and puts payroll in a position to contribute to wider HCM initiatives. This means payroll can have a more prominent role in employee relations. Daniela Porr, Europe, Middle East and Africa, HCM and equality, diversity and inclusion specialist at Workday, says: “Payroll sits at the heart of business, where human resources (HR) and finance intersect. So, it’s ideally placed to connect and utilise its valuable treasure trove of data and insights for the benefit of the business.”
This is extremely useful to multinational companies. Many are increasingly looking for more global solutions – solutions that can give a unified view of HCM data, and a consistent experience for all their workers.
To achieve that, they’re exploring how they can rationalise the number of solutions they use. Operating in the cloud makes streamlining attainable for global businesses and smaller firms alike. Take Workday, for example. Our finance, HR and planning system provides an overall single source of truth which enables confident decision making, as well as coherent processes for employees.
Cloud technology allows organisations to use and analyse data to develop long-term strategies and make swift decisions. In the first instance, digitalisation allows payroll to become faster and more accurate and efficient. This automation frees up payroll professionals to spend more time on analytics and broader thinking. But then the technology also offers in-depth analytics that produce powerful and actionable insights. With Workday, it’s possible to analyse real-time data from across finance, HR, time, absence and payroll – delivering unique, holistic insights. From cost and patterns of absence to longer term demographic analysis, these insights can make a fundamental difference to demand and strategic planning. And these are increasingly important as the labour market becomes an employee’s market. Payroll professionals can help connect the dots, spot patterns early and enable organisational change with the right foundations set in payroll, time and absence.
Payroll professionals can use their expertise to identify the measures that would be most useful for overcoming challenges faced by their organisations, including achieving growth, addressing attrition or staying ahead of competitors. It’s an area that offers career development opportunities.
When it comes to the wider HCM strategies, payroll data and analytics can influence, they fall into two main categories:
Payroll has an important role to play in employee well-being, financial wellness and diversity strategies. Understanding patterns in staff turnover can inform those initiatives. It could point towards ‘pay on demand’ or ’instant pay’ for example, which allows employees – no matter their background – to focus on their work with as little worry as possible. This supports attracting, as well as retaining, talent – and plays into understanding the mindset of the generation of gig workers. And with the right analytics, organisations can understand how precise combinations of pay, other benefits, holiday allowances and so on, impact people’s choices about whether to stay or leave. Such insights would inform compensation strategy.
In terms of workforce strategy, a business can use insights from payroll data to forecast labour costs and control them proactively, for instance. And such insights underpin agility. Integrated with HR data, payroll analytics can tell an organisation when and how to adjust the workforce quickly and place the right people with the right skills where they’re needed. This ability proved invaluable to many companies during the disruptive period of the pandemic. An organisation could use payroll data to establish whether permanent or temporary roles make more sense, for example. And this sort of information could prove useful for companies as they transition back to business as usual or the ‘new normal’.
Unlocking the potential
Payroll professionals know their data is an untapped resource. And it’s time for their colleagues to recognise payroll isn’t a niche function. It’s a critical function and holds information that, with the right analytics, can make the difference between success and failure. Cloud systems provide real-time insights that are key in the changing world of work. Daniela adds: “Payroll should have a seat at the table and use its unique insights to become a more strategic and valued partner to the business.”
Featured in the December 2021 / January 2022 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.