01 March 2021
Alan Wigley FCIPP MSc, global payroll manager at Pinsent Masons LLP, makes the case for implementing payroll performance indicators
It’s amazing how much payroll has evolved in the 45 years I’ve been working in the industry. Payroll was very much undervalued in the 1970s and I remember many people thinking payroll only worked one day a week – pay day – after we’d pressed the magic button that calculated their gross to net and put pay in envelopes. So, all we wages clerks had to do was distribute the envelopes to the workforce. I could never work out why they thought that if their pay was wrong it was the payroll department’s fault and not this magic little button!
Most organisations then graded payroll clerks the lowest level for office staff. In my early years I would never have believed I’d be working in a profession where I would qualify with a master’s degree that would lead to holding senior positions with multinational companies and travelling and working overseas.
Sadly, in a lot of organisations payroll is still undervalued, and it infuriates me that incorrect assumptions are made when payroll goes wrong. Why would it be the fault of the payroll department that the human resources manager forgot to send a salary change or the line manager missed some overtime? This is not just a UK view of payroll, but a global misunderstanding.
Being responsible for global payrolls, I came across the article ‘Payroll needs to evolve – now‘ by PwC Australia (see https://pwc.to/37a8kHT or http://bit.ly/3sdAngN), which I notified to Professional’s editor. Reading how payroll is portrayed in Australia made me think now is the right time and opportunity for payroll to further evolve.
Covid-19 has really challenged the world of payroll. I would never have believed it possible payroll staff could work from home. As well as the usual weekly/monthly challenges there is the constantly changing legislation around furlough to contend with.
I must admit to missing all of this due to a major operation and a lengthy period in hospital, but speaking to my team at Pinsent Masons we could work through what was needed. I have to applaud them for a fantastic job well-done. They are all super payrollers in my eyes and for the first time the business recognised what a fantastic job they had done.
The whole payroll community should be proud of what it has achieved during these difficult times. Australia’s prime minister, Scott Morrison, publicly praised and thanked the country’s payroll professionals, recognising the importance to the workforce and employers, and also the collection and payment of payroll taxes vital to keep Australia going. If only our PM, Boris Johnson, could do something similar for us in the UK. Each and every one of you deserve to be recognised for what you continue to deliver.
In the PwC article, the authors identify twelve principles to help the payroll function reach full potential. Among these is ‘Enable accountability’, making people accountable for payroll outcomes. If what payroll receives is wrong, the payroll is going to be wrong.
For many years I have advocated producing ‘payroll performance indicators’ (PPIs) to help in discussions with vendor management but also where the payroll process internally is failing. Producing, publishing and sharing these results also covers these principles: deliver operational excellence, drive performance outcomes, develop capability, and drive data analysis.
Introduced at Pinsent Masons some time ago, the published PPIs covered all our countries individually and collectively. Not only did we look at the final payroll indicators – i.e. how accurate was the payroll to our employees – but at indicators during the trial payroll. Originally, we set accuracy targets of 80% for our trial payrolls and 98% for our final payrolls.
Using a traffic-light system presented as a graph we could easily identify where there were issues. The trial payroll results were always the most interesting. We could see and illustrate where there were problems, which were reported at senior level, allowing us to engage in the areas of poor quality and to identify solutions. It did not take long for most people to ensure they were not in the ‘red’.
In conclusion, what is applicable to our colleagues in Australia is applicable to what we are experiencing here in the UK, so it is a great opportunity for us payrollers to look at how we can evolve payroll more, now. n
To support improvement in payroll professionals of the future, why not look at bringing into the business payroll apprentices as they can be a great asset to the team. It should be straightforward putting a business case together.
There are organisations that offer government approved apprenticeship qualifications at levels 3 and 5. There are no employer National Insurance costs (subject to them being under age 25) and, if they are based in England, you might be able to use the apprenticeship levy.
Featured in the March 2021 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.