Let’s talk about... Payroll team red flags

... and solutions

Do you have payroll in your remit? Is there something NQR with the team dynamics/function but you can’t pinpoint the issue? Everyone seemingly appears to be getting correctly paid week in week out - but the comfort levels of the function overall cannot be clearly established.

Within TPAC there is a combined experience of 30+ years in the industry and it has given our team the exposure to countless payroll team idiosyncrasies.

Before we dive in, we want to say to payroll teams - talking about these red flags is not meant to be a negative. No payroll team thrives when they are feeling unnoticed or unheard.

HR and Finance managers and executives with payroll in their remit want to do their best for their payroll teams. They may not understand the day-to-day, but good leadership is willing to learn what makes your team achieve good things. It is also on payroll to help their leaders on this journey. 

The red flags

Here is our curated list of red flags and recommendations:

Payroll is playing its cards close to its chest.

As a function they won’t readily share insights, updates, or business critical intel. 

In this case our recommendation is an external assessment. This is really the only way to deep dive into any risks. The external lens can investigate capacity, capability and also understand what really may be going on. 

Payroll is resistant to change. 

“That will never work, they won’t change” … a payroll function that leans into historical lessons more so than moving forward is a payroll resistant to change. 

Our recommendation - Have payroll teams involved in the early stages of change projects that impact employee data. This gives the teams early access to important decisions and will help set the change up for success. 

Payroll has a poor relationship with HR and/or Finance. 

There is negative chit chat, finger pointing or eye rolling about other functions knowledge or experience - it is not a collaborative environment, there is no mutual respect and payroll feel they must “get it done” and move on. 

This may indicate a lack of role clarity, responsibility in remit, and understanding of data criticality between teams. This can only improve once teams are on an equal footing and aligned on the same page.

Our recommendation - Check in on functions, knowing the importance of their role and their role in the bigger picture. HR is strategic and supports business objectives - payroll are often not privileged to the levers on these decisions. Information sharing to payroll on business strategy is a good step. 

You’ve had significant churn in your HR team.

Payroll often do a significant amount of informal onboarding for HR teams. HR often rely on payroll to understand the landscape in the business. If you’ve moved through a fair number of new starters in your HR team, remember the role and potential reliance the payroll team feel they have on them. 

Our recommendation - Reward and recognise payroll teams for the role they play in building a positive commencement for new HR employees. Also, make sure to organise a time that is convenient for payroll to train new team members with plenty of warning.

You have a new HRIS. 

Again, the responsibility assignment of tasks and data points is critical. If a new management system has been rolled out and payroll have not been equally involved in the process, there can be major disrupt. Payroll teams are the gatekeepers of upstream HRIS information being inaccurate because it results in non-compliance.

Our recommendation - Ensure your payroll team is supported and the business really understands your master data and work arounds have been established. Ask payroll what the downstream impacts are for them.

Ask - What are the work arounds? Can improvements be made? Has risk shifted to different parts of the employee lifecycle?  Can they recommend any fixes? 

You’ve put in a new payroll system in the last 6 months.

Payroll may be in a world of pain. Or they may be hitting their most efficient sweet spot as a function. It can really go either way.

Our recommendation - Get payroll into a strategy phase! No matter which fork in the road the payroll team is at, strategic payroll planning is still key. Planning ahead is the only way payroll can become innovative and not just a reactive function.

Recognise, assess and make a plan

Not all is lost if multiple red flags have been identified in your payroll team. Think of it as a first step in making a change for the better. It won’t happen overnight. Expect a bit of resistance but rest assured that a well-functioning payroll team as the outcome will pay off in many ways and the flow into other departments is inevitable.