*By Jeff Phipps
If employees are the beating heart of an organization, then payroll is, in many ways, the blood that runs through it. When done correctly, payroll has the potential to be strategic. It can enable an agile, flexible and engaged workforce while facilitating global growth. However, if done incorrectly, the opposite can happen. Employees will quickly become demotivated and start looking for alternative means of employment.
With employees being the greatest intellectual asset in any organization, business leaders are taking payroll much more seriously than ever before. And with good reason. By thinking of payroll as a strategic asset, companies can build an infrastructure with the agility and scalability necessary to grow for at least the next 20 years. But what should companies prioritize when implementing a payroll strategy?
Ensure payroll is at the center of any HCM transformation
The most common mistake I see is for a company to leave payroll until the end or treat it separately from its broader human capital management (HCM) transformation. This can lead you to inadvertently create an overly complex data stream, which can be a time-consuming and expensive challenge to fix. To ensure this doesn't happen, it's important that organizations don't leave payroll as an afterthought in their HCM transformation, but put it front and center.
Understand the four ingredients for a successful payroll
If there's one thing I've learned about payroll, it's understanding its four fundamental ingredients: data, people, processes and technology. Organizations may be excited about the latest payroll technology on the market but not pay enough attention to the quality and availability of their data. In other words, they may have the right processes in place to ensure accuracy but not have the in-house expertise to integrate them all. As with any great dish, it's crucial that all the ingredients work together in balance.
Think long term
I have yet to meet an organization that wants to change their payroll solution, but I know many that need to. When this is the case, it's important not to rush.
When choosing a payroll solution, it is essential that the organization considers its long-term needs and questions the durability of its choice. Yes, solutions should be evaluated based on their current performance. However, take the time to consider the direction the solution and the vendor producing it are headed. Can you identify an investment history and path that aligns with your future needs?
Understand where the value and costs lie
Unfortunately, too often organizations place undue weight on resources that will have little impact. It's important not to lose sight of the fact that payroll's priority is to ensure employees are paid accurately and on time, while maintaining compliance and security. If any one of these elements fails, the impact will quickly diminish the value of any other resource.
Payroll is like a utility within the business that employees simply expect to work. It can be tricky to make payroll happen. It can be difficult to ensure that all data remains secure and your company remains compliant with increasingly stringent regulations. However, after seven years, I'm still waiting for a thank you phone call for paying everyone correctly.
Ensuring a single version of the truth
A scalable, unified payroll platform can streamline payroll processes across an organization's international footprint and consolidate all data into a single, consolidated view. This is critical as it can reduce overall costs and errors while improving compliance and the employee experience.
Rather than relying on a fragmented, enterprise-wide approach, organizations should always strive for consolidation. By ensuring a single version of the truth, they will be able to make more informed decisions, increase security, gain extra flexibility to integrate future markets, enhance the employee experience, and react more quickly to changing industry trends and market events.
Don't run before you can walk
Organizations need to ensure their payroll keeps up with the relentless pace of change in modern business. The longer they remain idle or combine existing solutions in an improvised way, the greater the risk. To drive innovation, efficiency and growth across the enterprise, organizations must develop a unified, global, secure and resilient payroll model.
While many companies understand this now, all too often they don't know how to implement a modern payroll strategy. More than anything, my advice is not to run before you can walk. Payroll cannot evolve from simply covering the basics, i.e. paying employees, to driving strategy if employees cannot count on receiving accurate paychecks, or if managers cannot access the data and reports they need quickly and easily.
*Jeff Phipps is senior vice president of GlobalView ADP
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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