Four Types of Dangerous Payroll People

Yes, I mention this a lot in my posts, but payroll is a business-critical activity. It manages one of the largest costs a business has which is the cost of paying employees.

NZPPA was formed to develop payroll as a profession in New Zealand and we are slowly doing that one win at a time. And yes, payroll does win from time to time.

A number of issues or road blocks are stopping payroll from being recognised as the professional, dynamic and challenging career that it is and can be if we control some behaviours that are commonly seen within the payroll profession in New Zealand.

In this post I want to talk about a group of payroll practitioners that are hindering how the business perceives payroll and payroll being recognised as a profession overall. To do this I have selected four statements I hear from these types of payroll practitioners on a regular basis that show how they behave in payroll. The statements are as follows:

  • I have always done it that way.
  • The payroll system does it.
  • It’s HR’s fault (or anyone else other than payroll).
  • I haven’t got time for that. 

I have always done it that way.

Everyone wants some level of security in their work and for payroll defined processes, deadlines and rules are the framework within which we work.  But this does not mean in payroll that we never challenge that framework to confirm it is current, compliant, cost-effective and meets the needs of payroll and the business overall.

It feels good to know a proven process will achieve an outcome required such as paying employees correctly and on time. But all things change, and payroll practitioners must not lock themselves into an approach just because it has always been done that way.

Many times over the years when raising issues with payroll practitioners I have heard that the reason for a failure in payroll is because “I have always done it that way”.  They don’t see the importance of challenging the norm to always ensure that their thinking, understanding and responsibility to the business remain valid and current. If what they have always done is still valid, then any assessment of it will stand up to scrutiny, so why can’t it be tested to ensure its validity?

For payroll all activities should be assessed on at least an annual basis.  It’s also an excellent professional development tool when payroll leaders delegate the assessment to team members, so they are fully involved and take ownership of the processes they undertake.  This ensures that all payroll processes are valid, robust and compliant.

The payroll system does it.

It is becoming far too common to see payroll practitioners totally rely on their payroll system to perform legislative calculations without knowing how the payroll system is doing these calculations.  There is a legislative requirement to be able to state how an employee’s pay has been calculated (section 130 Employment Relations Act) and this request can be made by the employee, their representative, the union or a labour inspector.  

I have heard the statement that “the payroll system does it” many times from payroll people when asking about the calculations the system is doing, especially for the Holidays Act.  This totally hands-off approach, where the payroll practitioner accepts whatever the system provides without understanding what it is doing or even ensuring it meets legislative requirements, is unacceptable for a professional payroll practitioner.

The dumbing down of payroll skills because of the belief that the payroll system does it all is a false truth.  As I have stated before in previous posts, the payroll system is only a tool for the payroll practitioner to help in paying an employee correctly. A true payroll professional can explain fully any calculation required by law or by agreement without the use of a payroll system and can then show how that calculation is done in the payroll system they use.  If they can’t do this, they are a risk to payroll and the business employing them.

It’s HR’s fault (or anyone else other than payroll).

It’s always useful to have a fall guy to blame for all the ills in the world. In payroll we act on instructions; we are not decision-makers.  Yes, I have stated that HR is an issue for payroll as they talk about being inclusive but payroll does not seem to be included in the conference call.

The payroll practitioner that blames everyone else in the business does need to have a good hard look at what they are doing and if some (hopefully not all) are issues from their own actions, then they need to own this and more importantly do something about it. If there is something wrong or not working, the first question should be why. Keep going until a reason and solution is found.

The other side to this is that if it is another part of the business causing issues for payroll through undermining compliance and increasing risk, then payroll needs to be professional and put concise facts forward (create a business case on the issues identified with the cost, impact and risk to the business).  If this is not heard or is not acted on by management, then at the very least you have done your job and can feel confident as a payroll professional.

I haven’t got time for that.

Now for my favourite payroll excuse: “I haven’t got time for that”. Payroll is process and deadline driven so the timeframe for all payroll activities should be known, planned and achieved. Yes, payroll is busy, and workloads can change based on factors outside of payroll’s control, but not taking the time to get payroll correct is creating a situation that could undermine payroll going forward.  Being a business-critical activity, payroll must have time to get payroll done.

Reasons for not having time in payroll can include the following:

  • No formal process or procedure as payroll is run by the seat of their pants.
  • Only one person runs payroll without any backup, so all payroll activities revolve around one person.
  • Not using a payroll system to its full potential.
  • A mixture of the behaviours examined in this post.

There is a simple way to overcome the lack of time in payroll, make it!  If external non-payroll activities such as HR or Finance are undermining payroll, payroll must let management know the effect on payroll outcomes.  Get your voice and fight for payroll.

So, in conclusion, don’t become a danger to payroll, challenge what you do, if what you do is correct then it will stand up to scrutiny.  Get back to the basics and understand what and how the calculations in payroll must be done (including the payroll system). Stop blaming, instead act and take ownership of your contribution to payroll and state clearly what is not part of payroll and why and move payroll forward.  Lastly, take control of your time in payroll as without it nothing can be done and no payroll outcomes will be achieved.

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