01 June 2024
Karen Thomson MSc ChFCIPPdip FHEA, director of UK payroll and employment taxes, AAB, shares her perspectives on whether education or experience should take centre stage when it comes to successful payroll careers
I have seen so many debates over the years which centre around whether having a formal qualification enables careers to progress or maybe to progress quicker, and discussions regarding whether they provide better knowledge than just experience. The payroll industry’s formal qualifications and training are relatively new when compared to other professional service sectors such as accountancy and the legal sector, but then you could argue that the payroll industry has become increasingly complex over the years, demanding an increase in knowledge and subsequently requiring these new qualification routes.
I’m a firm believer that it’s for an individual to decide whether they wish to undertake formal qualifications or use informal learning routes in their careers. I do, however, believe that payroll training is needed in today’s world due to the sheer volume of legislation in play and how complex employers’ terms and conditions can be. Government parties come and go but all seem to think that payroll and real time information are a magic bullet to all their statistical and payment needs, meaning legislation will keep changing and growing, placing increased demands on payroll and requiring continuous professional development to keep up and to get ahead of the curve.
How things were
When I started payroll in the ‘old’ days of Kalamazoo sheets in leather bound slabs which needed two hands to lift, there was the first glimmer of hope of a formal qualification route. Back then, there was also excellent training provided by the then Inland Revenue, now HM Revenue and Customs (HMRC). And it was free. HMRC went to huge efforts to deliver numerous manuals and boxes of tax and National Insurance cards for you to refer to. My training sessions on statutory sick pay (SSP) and statutory maternity pay (SMP) were run from a now unused building in Carlisle and I even received a certificate from the Inland Revenue to confirm I understood the payments. I’m now not quite sure how this was established as no tests were given out, but nevertheless I received a piece of paper which went into a frame and confirmed I knew how to work out manual SSP and SMP calculations.
When I started out in payroll most preparation was manual, with data input into a payroll system which carried out the calculations. To be fair, some of those systems would still give the newer ones a good run for their money. But it was difficult, as there was only the Inland Revenue to seek help from and the internet was only just becoming the norm, with nothing available like what we have today, with GOV.UK.
Then I found the Institute of Payroll and Pensions Management (now the CIPP), who advertised the Diploma in Payroll Management. At the time, there was also something called the foundation exam, which was effectively year one of the current Foundation Degree in Payroll Management. I was terrified of exams after school, so this wasn’t the right option for me and so I plunged myself into the two-year diploma. My school education finished in the ’80s, I hadn’t studied since, and I never thought I would study again. However, I found myself wanting to learn more and this was a route I believed would help me to achieve just that.
The diploma involved distance learning, which saw massive binders delivered to my home address and a tutor day on the end of a phone, followed by a weekend revision school at the end of each year to consolidate all that I had learnt. I met a great many people in the same boat as me, all of whom were learning, and I still call many of them friends even now. I took away more knowledge than I could have from just training ‘on the job’ at the time.
Building support, networks and friendships
I think one of the most important points to note is that education isn’t always just about content and certificates, but also the sharing of knowledge with others and the sense of relief knowing you have others you can seek support from, while supporting them too. Today with the Foundation Degree in Payroll Management (excluding the pandemic years), there are face-to-face tutorials and module review days, allowing payroll professionals from all walks of life to compare notes. Some will work in a bureau, some in-house, some will work on small payrolls and others on humongous payrolls, but all will share different aspects of a payroll career. In addition, many also forge new friendships which will last their whole careers and beyond.
The big question
As I said right at the beginning, I do think it’s for individuals to choose whether education or experience is the right path for them, but I will pose a question. If we want to be viewed in the same vein (or more), as those in professions such as accounting who need to be qualified, then isn’t there an obligation on those in our profession to at least consider the education route?
I hear people state that they cannot undertake payroll qualifications as their employers won’t pay for them. I have been very fortunate that my employers over the years have paid for all my payroll qualifications. However, if an employer won’t pay, it’s worth noting that many employees in these other professions (e.g., accountancy) pay for their qualifications themselves, because they want a career in the industry of their choice. So, should payroll be any different? There may be instances where payroll professionals must pay for qualifications themselves. The introduction of student loans could be beneficial here, and so could the payroll apprenticeships which are now available. Age is no barrier and I have seen many new entrants to payroll via career change routes.
Personal experiences of education
I feel very fortunate as I got to take the Masters which helped me to become much more of a strategic thinker. I also did a further Postgraduate Certificate (that’s it now though!) to help me become a better payroll tutor. This, again, aided my career and furthered my understanding of how my team members learn (or can learn) – not everyone is the same.
I had the privilege of being a tutor for the CIPP for nearly 20 years. If it wasn’t for the pandemic (which meant I just couldn’t devote the time needed to students), I would have remained as one. The tutors always have the best interests of the students at the heart of everything they do, they must undergo annual training and always have support from their peers. They never do it for the money but more because they want to give something back to the profession.
Considerations when recruiting
Having said all the above, I also value experience when looking to recruit a payroll professional to fill a role, unless of course, this is in a training / apprenticeship position. Interestingly, I have found when I’ve been involved in recruitment processes over the last ten years, that where a person is new to the profession or doesn’t hold any formal qualifications, it’s one of the key things that attracts them to the company. At AAB (where I work now) and at Armstrong Watson, where I worked previously, graduate schemes, apprenticeships and
a career pathway route are offered, providing both formal and informal training for keen recruits wanting to take advantage of those opportunities.
However, just because someone doesn’t have formal training or qualifications, it doesn’t necessarily mean they won’t be the right fit or won’t have the correct level of experience needed to do the role. Some people really dislike studying or had bad experiences in school or perhaps have a disability which doesn’t lend itself to some of the educational courses available.
I genuinely think people matter and if you recruit the right people, whether experienced, qualified or new entrants, you can teach them technical aspects of payroll over time, demonstrate how to provide excellent customer service to employees / clients and help them to understand business needs including growth strategies by being committed to success. Other transferrable skills into and out of payroll include but aren’t limited to:
- collaborative teamwork
- creative thinking
- problem solving
- impressing clients / employees / businesses
- building up knowledge and expertise in payroll and business.
So, can a qualification really demonstrate that an individual possesses all the above and more? And similarly, can experience alone be an indicator that someone is an expert in all of the areas listed? I’d suggest that it more possibly comes down to a combination of both, to complement one another.
This article feautured in the June 2024 issue of Professional.