Recent research by the Chartered Institute of Payroll Professionals found that a staggering 74% of payroll professionals surveyed said that they were unhappy with inefficiencies in their current solution. Despite this and in spite of the continued complexities demanded of today’s payroll functions, businesses still continue to de-prioritise updating their payroll processing solutions.
A huge contributing factor to this hesitancy to change is the fear of getting things wrong. Payroll is a vital cornerstone of many organisations and the fear that upending your processes by installing an unfamiliar solution can give people pause for thought.
We appreciate how important it is that when sourcing a new solution you find a system that works for you and your organisation from day one. The consequences of a delayed or inaccurate payroll run are too great to accept anything other than a solution that gets it right immediately. In the long run, however, is it worth the headaches and inefficiencies which inevitably crop up when you continue to put up with using an out-of-date solution?
We want to help you banish these unnecessary payroll headaches, which is why we’ve put together this checklist which highlights some of the key signs that you cannot afford to ignore when it comes to assessing whether the time is right to look for a new payroll solution:
Payroll inaccuracies
Ask any payroll professional and they will likely tell you that they pride themselves on delivering on time and accurate pay cycles regardless of circumstance. Unfortunately, the challenges presented by outdated or legacy systems can often be insurmountable- leaving organisations scrambling every month to reconcile errors in their pay processes.
Accuracy with wages is crucial as any discrepancies or delays can seriously impact the financial wellbeing of your employees as well as affect their levels of engagement at work. Inaccuracies can also lead to potential legal challenges which any organisation will be keen to avoid. If your payroll team is finding that your current solution is causing you to make some payroll errors, this is a clear sign that the time is right for your organisation to start the search for a new payroll system.
Late payroll runs
A factor that is just as important as the accuracy of your payroll is ensuring that your pay cycle is processed on time. The implications for a pay team’s reputation aside, a late pay cycle can fundamentally impact the wellbeing of your employees and pose potentially serious financial risks for them.
Are you finding that sluggish processing speeds or needless roadblocks in your pay cycle are causing delays when running your payroll? Late payment of wages can lead to untold amounts of stress for your people, not to mention opening you up to the threat of legal and financial action. If your pay run schedule is being hindered by an outdated or incapable system, consider the benefits that a solution with real-time calculations and super-speed processing will bring to your business.
Lack of automation
One of the root causes of payroll errors comes from an over-reliance on manual processes. Manual checks and admin-based tasks increase the potential for human error a thousandfold. Furthermore, a lack of automation can lead to your payroll teams losing precious hours each and every working day through painstaking manual checks and balances.
Any solution which is unable to significantly reduce the amount of manual input being handled by your payroll team isn’t worth much at all. The most effective payroll solutions should be able to easily bear the strain of even the most complex pay calculations, providing gross to net figures in the blink of an eye. Automation of these processes gives you the peace of mind to know that the information being fed through is accurate, right up to the moment that you run your payroll.
Your payroll takes too long to run
Older solutions can make running payroll a chore, with slow processing speeds often meaning that businesses need to run their payroll weeks in advance to ensure their people are paid on time. This leads to an extremely rigid pay function where it is impossible to account for last-minute corrections. Newer payroll solutions should place an emphasis on processing speed, meaning that your payroll data is reconciled near-instantaneously with a touch of a button.
Lack of payroll visibility
A lack of up-to-date visibility of payroll data means that organisations are wide open to potential errors when running their pay cycle and are not sufficiently equipped with the information they need to make real-time adjustments or business decisions.
This is a common phenomenon when looking at older or less interconnected systems which have a tendency to silo information away in less than helpful ways. Your payroll solution should be able to provide you with an accurate, up-to-date view of your pay, right up to the moment that you run your payroll so that you and your business leaders can make strategic workforce decisions based on accurate data.
Lack of integration
Does your payroll solution integrate with your other HR or time and attendance systems? If not, this can throw up unexpected hurdles and directly impact your ability to see and act upon accurate information across different areas of your operations.
In many cases, organisations tend to look for individual solutions to solve specific problems in a particular area of their business with the potential interplay of systems as an afterthought. This is particularly common in HR and the world of people management where the links between payroll and time and attendance systems are often forgotten about.
Ultimately your payroll is only as accurate as the information which is being fed into it, which is why ensuring your solution is able to connect intuitively with your time and attendance function and benefit from accurate, real-time information, should be a top priority when sourcing a system.
You’re unable to support financial wellbeing
In recent years, there has been a heightened increase in a focus on employee wellbeing and engagement within organisations. As a cornerstone of the financial rewards schemes of businesses, payroll sits at the heart of employee wellbeing.
Older solutions rarely offer the agility and scope for organisations to drive discussions around financial wellbeing nor help create policies and procedures which puts this first. When businesses don't have an unlimited pot of money through which to make salary increases, it is important to be able to be strategic about pay increments and to be able to make smart decisions about how you can support the financial wellbeing of your people in a smart way. Many organisations are looking to pay-on-demand to help them support employees during difficult times.
You’re unable to keep up with changing legislation
Regardless of sector, all businesses are beholden to strict regulations and compliance requirements. Sweeping changes such as those demanded by GDPR regulations have also demonstrated to businesses the need to be agile in meeting requirements.
Payroll in particular is rife with various shifting legislation which must be adhered to. Considerations such as minimum or living wage demands to more extreme examples in recent years such as COVID furlough schemes have demanded diligence and agility from payroll professionals.
Outdated solutions simply don’t offer the complexity and ability to suit these needs. Older systems can often mean that data is siloed away in unintuitive ways, making certification or proof of compliance with certain regulations far more difficult than it needs to be. Your payroll solution should make compliance a given, not a stress.
Lack of flexibility in hosting
Payroll is a vital element of your business and it is important to understand which hosting solution is most appropriate for your organisation. Cloud-based services reduce pressure on bandwidth and do away with the need for hefty servers, whereas some organisations may prefer on-premise due to specific security requirements. If your current solution needs inconvenient physical visits from engineers to fix or update, it’s time to look for a new solution. However, many organisations have specific security requirements which dictate whether a Cloud-based or on-premise hosted solution is more suitable. Suppliers who are restricted in their offerings are unlikely to be suitable as this would mean upending processes too fundamentally for most businesses.
What’s next?
We hope you’ve found this checklist to be a helpful guide to some of the key considerations you should keep in mind when considering when it may be time to look for a payroll provider. If any of these pains feel familiar and if you think you are one of many organisations who are languishing unnecessarily with outdated or unsuitable payroll solutions, if you find yourself battling increasing headaches with inaccurate data, security lapses, accessibility roadblocks, or if you simply just want to do better- why not check out our guide on choosing a payroll solution that’s fit for the future?
Alternatively, if you’d like to speak to someone about the payroll challenges you’re facing, get in touch with one of our friendly payroll solution experts.
