What is the function of payroll?

Last time I wrote about why I’m not about to click any magic button to run a payroll. But the comment “payroll is just a click of a button” deserves and receives some defence. I don’t take sides!

My answer is that the expression serves to offer not a denial of all that is complex and key about payroll, but rather a comment as to the role that the payroll function has to play. Consider:

  • Who decides and who decides what?
  • Who owns policy and who owns data?
  • Who makes choices and which choices?

The payroll profession I argue should not arbitrate, but advise. I find it hard to suggest that there is payroll strategy and direction, but I can readily concede a differing but equal importance to the custodianship, control and risk management that the profession implies.

The counterpart to payroll may feel a responsibility to set direction. In HR we may feel that our work bears the brunt of less tangible nuance (people and politics!) and we steer a wobbly course between strategy delivered upwards and direction delivered downwards or sideways. From this perspective, the payroll function is Nike’s “just do it”.

To engage financial minds once more at this point, let’s work with a debit and credit to our at-work, feel-good account balance:

Positivity Credit Scenario: Celebrate the launch of fabulous new benefits offers. On the case with flexible schemes, making the most of salary sacrifice to offer lifestyle adjusted options for employees, promoted through the rooftops and fully integrated with a remarkably capable HR, payroll and benefits platform.

Someone decides what to offer, why and with what aim. What will fit? What will be taken up? It’s decided. It’s also owned by those policy makers and the choices are apparently all made before we touch the desks in payroll. But now, refer to the payroll profession and please, please listen: how does this have to be done? Is there a cost impact which might serve to adjust our plans, because of treatment of chosen benefits as salary sacrifice, P11D reporting or tax and NI bills?

Positivity Debit Scenario: Terminations are afoot. Aside from cost-modelling, it is not within the payroll team that the decisions are going to be made nor those affected consulted and looked after and these are not happy professional shoes to be in. At the detail, there are decisions about voluntary settlement arrangements, statutory entitlements, notice and timing of outcomes. It is not to payroll teams to question these verdicts, but it is essential that they are verdicts informed by that expertise. Again, listen up on the appropriate treatment of outcomes and therefore the impact of the choices we want to make.

My argument is that the relationship between different disciplines must be one of dialogue and of an appreciation of roles that each has to serve. There are positive and healthy relations that play to respective strengths. And there are times when the stress of each results in a sense that the grass is greener on the other side.

I suggest we can all support the suppliers of HR and Payroll technology using the “click of a button” phrase if we accept that firstly, this is relative and secondly, they’d really quite like to sell us their system. Fair enough. Within the organisation, perhaps the meaning of the click of a button is that we really hope those practising payroll do their jobs well, so that we can do ours.

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