Julie Lock (Commercial Director here at Advanced) has over 25 years of experience in the world of payroll, with her passion and insight being called upon regularly by the Chartered Institute of Payroll Professionals (CIPP) and other leading Industry bodies in the field of pay. We recently sat down with Julie to discuss the new challenges and responsibilities of payroll and the role she sees pay professionals playing moving forwards.
Thank you for joining us Julie. You’ve had many years of experience in the world of payroll and I’m
sure in that time, you’ve seen a great deal of innovation and evolution within
the function. In your own words, what would you define the role of modern payroll as?
Julie: At the heart of it, the role of a payroll professional is to pay people accurately and on time. While this seems like quite a simple answer, to me it speaks to the mindset of people who work in payroll. I know from my time spent in the sector that this accuracy and need for excellence is something that’s drilled into payroll professionals from day one- it’s essentially a mantra for them. Payroll Professionals understand the direct impact their work has on an entire workforce. Beyond accurate pay, the role of a Payroll Professional is now morphing into employee financial wellbeing.
How would you say it impacts payroll teams when that accuracy falls short? We’ve seen some very recent examples from Next and Asda where severe payroll issues have led to widespread shortfalls in pay for employees.
Julie: It essentially represents everything you aim to avoid in payroll. When I say that payroll professionals strive for accuracy, that’s not me blowing their trumpet on behalf of the sector: I genuinely believe that people who work in payroll have this ingrained need to get things right. It goes beyond professional pride- it’s something which sits at the core of who they are.
Whenever there are serious shortfalls in payroll quality, it impacts people’s trust in the pay process and their employers. That loss of trust is one of the worst things for pay professionals.
When you say loss of trust, are you just talking about the basic function of payroll or do you believe that employees within an organisation have a greater level of engagement with the payroll teams where they work?
Julie: Essentially it’s both. Over half the working population in the UK are living payday to payday. We all work in order to earn a living and so to find out that your wage is not what you expected it to be on pay day is such a source of physical and mental strain for many people. Accurate pay forms a core component of the employee/employer relationship that of course serious errors will fundamentally impact how a person views their employer.
Beyond that, I believe that payroll is the function serves as the true touchstone for employees. Payroll teams should be seen as a force to help support the financial wellbeing of their people.
In your opinion, how may payroll errors occur?
Julie: There can be a number of reasons for severe errors to occur. At a basic level, you want to look at the payroll solution which is currently being used. Often, legacy systems which are coming to an end of life stage or just lacking in support in general, can lead to a reduction of data integrity which can cause these errors to crop up.
Manual data capture is a common cause of either late or inaccurate pay data, the solution here is to automate that data capture to eliminate errors and missing data.
In rarer cases, issues can arise as a result of implementing a new payroll system. Ask any payroll professional and they will tell you that the testing phase of an implementation is absolutely vital in guaranteeing the success of the new solution and in ensuring payroll continuity and accuracy.
Does this mean that organisations should avoid sourcing new solutions in case of potential errors disrupting payroll?
Julie: The exact opposite in fact. Although I can’t blame any business for being wary. I know from experience how important it is to ensure continuity and to make sure that you’re paying your people accurately and on time. The fear of getting it wrong is a powerful thing and it’s a big reason why organisations often let projects of digital transformation around payroll fall by the wayside.
Ultimately however, sticking with legacy solutions essentially exchanges a set of imagined fears for very real issues down the line. The older a solution is and the closer it slides towards end of life status, the greater the risk of errors occurring and disrupting your pay cycle.
Even when worst case scenarios happen and sever mistakes are made within payroll, it actually strengthens the case for digital transformation. In my experience, these kinds of errors are ones which are easily mitigated through good practice during the implementation of a new payroll system.
At Advanced, we take a best practice approach following detailed User Acceptance Testing of configuration, we carry out parallel runs for at least two to three pay periods whenever a business changes to our payroll solution. This means that they continue to operate their outgoing solution at the same time as their new solution, with both being compared to spot and correct any discrepancies. This is an incredibly important step in the due diligence process and businesses should never be tempted to go live without this or to cut costs by reducing the testing phase of an implementation.
What role do you see Payroll playing in safeguarding the financial wellbeing of employees within their organisation?
Julie: They play the most fundamental role. To be frank, without the involvement of your payroll professionals, ensuring the financial wellbeing of your people just doesn’t happen. If you think about the function of payroll and how they sit within the hierarchy of an organisation, they are naturally placed to understand how their people may be struggling financially, how widespread of a concern it is and also have an understanding of how to create strategies to account for this.
One of the greatest roles I believe that payroll has to play is In helping drive conversations around financial wellbeing and education. 68% of employees feeling financial stress say they feel uncomfortable discussing it with their employers. That creates serious problems for businesses as it means there’s a blind spot in their understanding of issues which can impact the mental and physical wellbeing of their people. Removing the stigma around money talk and financial struggles should be one of the top priorities for payroll professionals.
The cost of living crisis is also a very real worry for so many across the country. 50% of UK households have less than £250 in savings, and half of workers on monthly pay schedules say they run out of money between pay days. That means a large majority of employees in Britain are living on a knife edge financially, with any unexpected outgoings having the potential to cause serious harm.
Beyond ensuring accuracy in the payroll process, pay professionals have a huge role to play in driving forward greater financial awareness and education amongst employees. A recent report by Wagestream has examined the gap in financial wellbeing and education amongst much of the UK workforce and it perfectly highlights the importance of having an engaged and influential payroll team at the heart of your business.
Many organisations are still dealing with the impact of the past few years of global disruption, meaning that priorities may be focused elsewhere, rather than in investing in payroll. Do you have any advice for them?
Julie: I appreciate that for the C-suite in particular, the main focus must be on driving productivity. I think that to ignore payroll when striving for this however, does ignore the power of pay and how closely it’s linked to motivation and wellbeing. Think about how underpaid employees must be feeling when they are suddenly struggling to make ends meet, work productivity is the furthest from their minds.
Ensuring you pay your people accurately and on time is a cornerstone of your reward structure and is also a measure of how committed you are to looking after your people. Consider the widespread impact of any serious payroll errors they affect how we perceive those organisations as places to work for. What will be the knock on effect of not only existing employees walking out the door, but in terms of attracting new talent?
Payroll transformation, as with any digital transformation, is a long-term investment. That means that when times are tough and organisations are tightening belts, it can be very difficult to see past that initial outlay cost to the benefits beyond. What businesses need to understand however, is what they’re truly getting with a new solution. Accuracy is the main goal of any payroll process but think about how payroll software achieves this: greater automation of your payroll function not only affords you the peace of mind to understand that you’re paying your people accurately and on time, but it also means that you’re freeing your payroll teams from the burden of admin heavy tasks, meaning that they actually have the free time needed to help drive forward policy around financial wellbeing and education.
Thank you for your time Julie. As you can see, Payroll forms a key component of not only your employee rewards structure but also how your organisation is perceived by your employees and prospective talent. Payroll professionals work tirelessly to ensure accuracy with each pay cycle but it’s also clear that they have a much greater role to play in helping create policy and procedure to both educate employees around financial best practice but to also support their ongoing financial wellbeing.
One of the key factors in achieving this is by ensuring that your payroll teams have access to the tools necessary in order to ensure accuracy of the pay process but also free their valuable time in order to leverage their talents in more meaningful ways. We understand that the search for a new payroll solution can seem daunting and we want to help you get it right, which is why we’ve put together a guide to Choosing a payroll system that's right for you.
Take a look today and discover how transforming the way you run payroll can help ensure accuracy and support the financial wellbeing of your people.
