By Hannah Grimshaw, BPO Payroll Lead, Symatrix
As the first Covid-19 lockdown kicked in during the spring of 2020, HR and payroll teams focused on keeping their organisations operating and providing employee support.
Businesses running on-premise applications struggled most, having to overcome problems accessing payroll engines remotely and securely through virtual private networks (VPN). This was a constant problem, risking serious downtime and payment delays. Moreover, with employees advised to work from home again from September due to the pandemic’s second wave, businesses needed to ensure these systems were optimised for further use during the winter period. Yet, even organisations operating in the cloud discovered it was not easy to restrict access to payroll to the appropriate people.
Now, with the Government extending the Coronavirus Job Retention Scheme (CJRS) until at least the end of April 2021 due to the second spike in Covid-19 cases, wider challenges continue to face payroll and HR teams, including the complexities around SSP (Statutory Sick Pay), Carry Over of Annual Leave and DEA (Direct Earnings Attachment) orders. It can prove to be an administrative nightmare for the organisations that lack the right processes and technologies.
Take DEA. On April 3 last year, the Department for Work and Pensions (DWP) confirmed it would tell employers to temporarily suspend DEA deductions from employees’ pay up to June 2020, due to the coronavirus. In July, employers were told not to make deductions until directed by DWP.
Further coronavirus-related restrictions could mean further changes in the coming months. Payroll teams therefore must be ready for any far-reaching changes that may emerge in the near future. The extension of the CJRS will continue to allow workers to be paid 80% of their current salary for hours not worked, given the renewed uncertainty during the current months.
We can expect further adjustments and directives beyond April, meaning payroll teams must remain on top of all the information that comes out of DWP and HMRC. It is not simply a question of knowing what needs to be done, but of how it needs to be done, to achieve a truly operational payroll.
Having the right systems in place and having tested them, will place any organisation at an advantage. But for payroll teams that have staff working from home, it is vital to continue using collaboration tools such as Microsoft Teams for problem and solution-sharing, social interaction and provision of updates on policies such as the CJRS and the eventual implementation of delayed initiatives such as the Job Support Scheme and Job Retention Bonus in 2021.
Manual methods and workarounds make organisations vulnerable
The requirement for people to work from home has highlighted how many payroll operations have off-system activities, calculations and workarounds that require manual activities which make them vulnerable. It has also exposed how difficult it can be for payroll to manage multiple people and systems across multiple locations. For many, errors have fallen through the governance structure that in normal times works perfectly well when everyone is in the same office. These challenges have been even more obvious within organisations that have an HCM solution and have outsourced payroll as separate applications.
Today, as the CJRS is extended into April, organisations may have to take more fundamental steps to ensure these problems do not recur. For many companies, the difficulties are compounded because they use an outsourcer whose approach is that you give them the data and they process payroll. The challenge is then getting the data to where all these human activities take place.
Two systems equal one problem with payroll outcomes
Organisations that have two separate systems, one for HR and one for payroll, running in two different environments, will by default never get the same access and immediacy of results as if they were running it in one HR/payroll solution. Payroll depends on great HR data, after all. By running payroll and HR in one system, businesses remove much of the need for manual intervention and they increase their chances of obtaining high-quality information from the process and supporting with strong governance and control.
Managed services can also have a key role to play here. The benefit of having HR and payroll on a single system, is that rather than focusing on just delivering a payroll service, the service-provider can instead concentrate on ensuring that the business’s whole HR data flow works in an efficient way.
Having HR and payroll on a single system has been a major advantage during the pandemic and will become ever more important to businesses moving forward. Many organisations may now have to think hard about how payroll is delivered in what may be a very different future.
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