This week is National Payroll Week (NPW) and let's be honest, few of those outside of the world of Payroll have any idea what it's about or even the contribution their Payroll function makes to the business and employees in general (besides the whole getting paid bit).
So what is NPW? It's a week to recognise the people within your firm who diligently make sure that you get paid correctly and on time and also to acknowledge the contribution that Payroll plays in our economy.
But why do Payroll functions need their own week for people to recognise their contributions? Is it because most people think a good Payroll function should be invisible and no-one should notice the payroll process is happening? If this is the case, then businesses are missing out on a wealth of skills and knowledge that can support not just their employees but also their business goals and strategies.
We often hear about HR becoming more strategic and offering real value to the organisation, but why not Payroll? How many businesses include Payroll Management in the development of their business and people objectives?
One of the key themes identified in Deloitte's Human Capital Trends Survey 2015 was workforce capability and the demand for skilled resources driving a trend towards the use of hourly, contingent and contract workers. 51% of respondents to the survey stated they plan to increase or significantly increase the usage of contingent workers, which was evidenced only last week when it was announced that there has been a 6% rise in the use of zero-hour contracts in the last year. The Payroll function should play a key part in enabling businesses to utilise these types of workers.
Whenever businesses are looking to utilise a new type of working, the following considerations should apply:
- There will need to be systems in place to enable these workers to enter their details, including the hours they've worked, and for businesses to manage transient, contingent workers, not just to be able to pay them but also report them correctly to the Revenue. Who would know better than the Payroll function how these systems should be set up and the data needed to process the pay?
- The compensation structure will need to be determined, covering not just rates of pay but also the benefits the new categories of workers would be entitled to. The Payroll function will have the legislative knowledge to be able to inform the business what pay and benefits each type of employee is entitled to e.g. holidays and then model the proposed compensation plans for the business and calculate the full cost to the business to employ them.
- The impact of these employees on salaried workers. The Payroll function are nine times out of ten the first place an employee goes to query their pay, especially if they get wind that the person working next to them is paid more or differently to them. The Payroll team will be able to advise the business on how any new categories of workers and remuneration schemes are being perceived within the business.
- The most beneficial aspect to having Payroll involved in the staffing of the business is in determining the correct classification of the workers to ensure they are paid correctly and are compliant with statutory legislation, to avoid costly penalties and fines. Earlier this year the Chief Secretary to the Treasury fined two Government departments a total of £1.5 million and fired hundreds of managers after it emerged that they were not doing enough to stop staff being paid through companies and illegally reducing their tax bills.
So rather than simply celebrating and recognising your Payroll function for paying you accurately and on time, during this year's NPW maybe you should consider how you can use them to the best of their ability and make use of this highly capable and experienced business function to get involved in adding real value to your business strategies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
