Pandemic or not, payroll must keep running

Dan Wilson, UK country manager, Alight | NGA HR

Payroll has never been easy. I think we can agree there has never been a time when Multi-country payroll has challenged the payroll community more.

As payroll professionals, we always need to be ready for new tax or legislation changes. But suddenly, we’re thrust into a period of time where we literally don’t know what changes might happen by the end of the day. The challenge is huge and the pressure is on.

All eyes are on your payroll teams to deliver wages, salaries, cheques and payslips. These must reflect all changes (including scheduled), be accurate and compliant. Away from the eyes of the world, this process is beset with admin.

Admin that can’t be automated. There is no option but to change payroll data and process manually. In most cases, reporting models are yet to be agreed, but will be inevitable. And of course, at some point, all these changes will need to be undone.

If you’ve not moved payroll to the Cloud and are still running manual or multiple platforms, this challenge will only be greater. Add to this that with many of your payroll team now work remotely, you have a huge GDPR or related data protection risk to add to your challenge.

We’ve got payroll covered for you

Each country, and in some instances, states, territories or even regions set their own job retention programmes.

It’s for this reason that many companies are turning to us. Not to just manage payroll admin, but to actually remove the potential risk of running non-compliant payroll. This is a cost that no company needs added at the moment.

As a dedicated payroll services provider, we’re set-up to manage changes. We also have capacity where most of our clients don’t. Where payroll is integrated with cloud HCMs, this is very easy for us to do remotely. Where it’s not, it’s still possible with access allowed to your systems.

As an example of the challenges ahead that we can address for you, let’s review the UK furlough programme as an example.

Our colleagues at Alight have gone into full details here; A guide for organisations implementing furlough leave in the UK in our combined COVID-19 Updates for Employers Toolkit, but I’m just going to touch here on the immediate payroll team challenge and how we can help administer this for you so you can focus on core payroll services.

The scale of the admin challenge for payroll teams

• On day one, 140,000 UK companies applied to the HMRC for Coronavirus job furlough scheme.
• Applications can only be made for employees who were on payroll prior to March 19, 2020.
• This is approximately one million employees, all of whom will need to be administered in their company payroll process. It is predicted that this number will grow to 8 million.
• In addition to the 80% of up to £2,500 pm that the UK government will pay, employers can choose to top up if they choose too. A further admin update.
• After six days, the funds will be paid from the government to the company and the usual deductions are to be made from these, factoring in the potentially lower salary and changes in contributions this might create.
• The initial three-month furlough period might be extended. If it is not, further changes will be required to payroll. This might also mean the start of redundancy consultations and the preparation for related payments to be made to employees.

Top tips for keep payroll running, even when it’s not business as usual

What can we learn from the COVID-19 experience

Firstly, that payroll teams are not just key workers. Once rather side-lined, the payroll department has proven to be vital. Suddenly, the work of these teams has been thrust into the limelight.

A new vocabulary is now used across boardroom and dining tables equally. Furlough. Not previously a general discussion topic, it’s now one that many businesses and households hang their futures on.

What many business leaders have realised, during the COVID-19 outbreak is that payroll is not just a case of calculating numbers. It’s an ever moving legislative minefield.

We’ve learned over the past few weeks that a decentralized payroll model is not sustainable long-term. Firstly, it can’t adapt in a crisis of a global scale.

It also can’t grow with a business. There is no room for innovation, there is zero transparency and no single-source of data. This is essential for business planning as many companies have found out. It can’t be centrally managed and it’s an expensive, high-risk approach to payroll.

Only by taking a unified approach to global payroll can organizations ever deliver the effectiveness and agility needed for the payroll function in a world that is impacted more globally than we’d ever imagined.