How to add value

07 April 2020

Payroll is a vital part of the human resources (HR) infrastructure, but HR is changing, and payroll needs to make sure it is developing and progressing at the same rate.

At PayFit, we work with a lot of fast-growing technology businesses, such as Revolut, Happn and Flux. Due to the speed of growth and openness to change of these companies, they are often at the vanguard of forward-thinking working habits, and offer a window into what the future of work could look like. We pride ourselves, too, in having a progressive and inclusive HR function.

HR departments have become ‘people teams’, and there is far more focus and attention paid to creating and nurturing an inclusive and effective company culture, developing the team, and ensuring that the whole is greater than the sum of its parts.

This is not a revelatory observation, but given forward-thinking and culture-minded HR departments are the way of the future, why is payroll still in the doldrums?

According to research we collected last year at PayFit, incredibly important data such as sick days and holiday pay are still collected and calculated using pen-and-paper by around half of companies in Europe. This is time-consuming for the payroll and HR teams, and frustrating for everyone when human error inevitably creeps into this antiquated process.

Creating this amount of agitation hardly fits into the modern era of HR, which is all about the enablement of better teams. Instead of taking up more time, and creating more heartache, payroll should be about taking away painful processes, and leaving more time for meaningful team-development activity.

Notwithstanding, payroll cannot be rushed or fudged, especially when it comes to compliance for example. Payrollers need to be aware of the legislation corresponding to the mandatory checks made on earnings and age for auto-enrolment, national minimum wage and National Insurance contributions (NICs). Of course, when legislation changes are afoot, this can spell trouble, as the changes can be quite easily overlooked accidentally. As a result, non-adherence can leave both employees and employers overpaying or underpaying NICs. This will create more agitation and, again, mean payroll creates more problems than it solves.

We keep this at the forefront of our minds at PayFit when we are developing products for the payroll industry. For example, we keep everything simple, and ensure that compliance is built in – employees are assessed automatically every month; NICs category changes are automatic, and warnings and notifications appear for auto-enrolment eligibility and national minimum wage.

But payroll is certainly not a one-size fits all industry. Different companies, different industries, and certainly different geographies need their payroll function to operate differently, and to incorporate different rules. Key components of the payroll process need to be flexible, rather than set in stone, such as reports, pay and deduction elements, benefits, and so on. At PayFit, we are keen to add value, while ensuring compliance, and that’s why we developed our own coding language to be as flexible as possible. Companies need a robust solution that can be tailored to their bespoke needs. Thanks to JetLang, our in-house language, our team of engineers is able to code new features or adapt calculations.
Another point to be made about legislation changes is that we seek to educate our users on any key changes in the industry. In our home nation of France, we launched the PayFit academy, which will launch in the UK and other markets. We also deposit helpful information throughout the platform at useful moments, to help educate and assist users.

But it needs to be remembered that payroll is not an island, and needs to dovetail seamlessly with HR and finance teams. A complicating factor here is that HR, finance and payroll often have different reporting requirements, and it’s often difficult to gather all the correct information. By building the solution with this in mind, we have focused on adding value to all stakeholders – very much including HR and finance.

By simplifying the process and requirements for all three departments, organisations can save a huge amount of time, which they can devote to improve the organisation as a whole. Payroll, then, becomes a key factor in driving positive change and growth across organisations, much like the forward-thinking people teams that we work with every day.

This article was featured in the April issue of Professional in Payroll, Pensions and Reward magazine and was correct at the time of publication.