Payroll – keeping the balance

01 June 2022

Jim Woodlingfield ChMCIPP, payroll and pensions manager at Sunderland City Council discusses how payroll teams can deal with having to balance their priorities

Payroll, as a function, thrives on process and order. One of the first things auditors will look for are standard operating procedures and flow charts and, given the volume of transactions we make, these are essential to our success.

However, if you’ve spent any time working in payroll, you’ll be used to the last-minute requests, improperly completed forms and questions about how to make a promised payment in compliance with Her Majesty’s Revenue and Customs (HMRC) and your own organisation’s financial regulations.

How do payroll professionals work to balance these competing demands?

In-house teams have the advantage of being part of their employer’s culture and holding an understanding of business priorities. Bureau colleagues have an overarching view and a strong commitment to customer satisfaction. While payroll is often seen as an emotionless, financial function, it’s here that soft skills are needed, and the following all play a part:

relationship management
emotional intelligence
judgement
experience.

One thing I learned early on in my career was the 80 / 20 rule (Pareto Principle). Regarding payroll transactions, these are the small number of payments that cause a disproportionate amount of work to sort out. Very often, where there is manual intervention in a record in one payment period, it will require a further correction in the next.

As a business-critical function, payroll often see themselves as guardians of their organisation’s internal business processes. One of the core values of payroll is fairness, and requests to circumvent processes strike at the heart of this. In these situations, we need to consider the overall aims of the organisation and the level of authority of those making the request, to balance these priorities. Experience also plays a part here; I’m sure many professionals will recall doing a payment as a one-off, only to be asked to repeat it again the following pay period. Sometimes the best way to respond is to ask the requestor if they’ve considered the ramifications of setting a precedent, and to explain the issues encountered in the past. Sometimes, business leaders must act decisively, and it’s payroll’s job to implement the decision and then manage the consequences.

HMRC regulations and other legal obligations are a different matter. Here, the payroll professional is on firmer ground. This is because, however pressing the need, no business leader will want to be on the wrong side of the law. As subject matter experts, payroll’s opinions will count. Often the cause of a non-compliant payment is payroll not being involved early enough, and here, the payroll professional needs to be proactive. They must talk to people at all levels in their organisation, to discover what’s happening and to bring solutions, not just point out problems. There can also be grey areas. Here, we need to assess risk and signpost the options for further advice and guidance.

Having the support of the payroll community

As part of a community, we also have our professional standards and the CIPP member code of conduct. These are essential in guiding us wherever there are conflicting priorities. Fellow professionals are also a great resource for discussing potential issues and different approaches with, in a supportive, collegiate environment. The CIPP hosts several specialist interest groups, and these are great forums in which to share best practices and to ask for a range of different perspectives.

Working in the public sector, I’m fortunate to have a strong framework of principles to guide me in my responsibility of being an effective steward of public resources. I find it helpful to bear in mind the Seven Principles of Public Life (also known as the Nolan Principles):

selflessness
integrity
objectivity
accountability
openness
honesty
leadership.

Payroll can sometimes be seen by others as bureaucratic, and subsequently, we can feel like business leaders don’t understand us and our processes. However, if we can accept that we both hold parts of the solution and learn to see each other’s perspectives, we can find a balance that keeps us true to our values while delivering the payments our organisations need to continue.