Shout out for payroll

It’s not every day you switch on the radio to hear a shout going out to the payroll community. But along with care workers, emergency services and grocery store staff, payrollers have been getting some love recently as they look after employees during global lockdowns. As well as job retention and part-time working schemes to register for, there are changes in sick pay arrangements, rules around temporary closures and lay-offs, new social insurance schemes and reduced or waived tax and social security contributions or extended deadlines for payment.

In the UK, for example, a key date was 20th April, registration day for the Chancellor’s Coronavirus Job Retention or Furlough Scheme and some very special key workers - payroll managers at employers around the country - were extra busy that morning with the bureaucratic job of registering their employees on the portal. And yes, unless my ears were deceiving me, my radio station recognised this, holding a shout out for payroll.

Quite apart from a surge of pride in the industry’s special role in the crisis, the moment brought home again the relevance of analytically astute, ever industrious payroll professionals, and the continuing changing role of payroll in the light of automation and straight through processing. The robots might be taking over your payroll data consolidation and calculation, but they’ll never be able to swivel on a dime and start registering furloughed employees.

Global payroll managers have to co-ordinate and support all this effort, ensuring they get the most beneficial terms both for their employees and their company so they see through this period with both workers and the business intact. It’s not only crucial work, it’s also in some cases, quite complex. In the UK alone, where there have been 7.5 million registrations to furlough a quarter of the workforce, I counted 84 grants and special schemes related to Coronavirus, according to one information service.

My colleague Tim Kelsey, who runs courses on the Global Payroll Response, reports that new regulations have been coming in almost daily, with both broad and deep implications for payroll. Although the UK is fairly unique – in Europe at least – in setting up a scheme very quickly from scratch for the purpose of job retention, many other countries around the world have been updating existing regulations in response to Covid-19.

China, one of the first to respond, warned employers not to terminate contracts due to Covid and ordered high severance payments if employees were laid off. France and Germany have used existing schemes for part-working to support their businesses through the crisis. And although it should be noted that these heavily unionised countries with their wide use of collective labour agreements have an inherently greater responsibility for job retention than others, there are also schemes around the world that provide funds directly to employers, including the $1 trillion economic stimulus plan in the US.

But while these are unprecedented times, this is not unprecedented work for payroll professionals. Just before this crisis, payroll managers across Europe, for example, were trying to get to grips with the payroll implications of Brexit due to changes in cross-border social insurance agreements. And before that, they were looking at the impact of different tax treatments of employees in the devolved nations of Scotland, Wales and Northern Ireland.

Automation and digitalisation won’t help with negotiating these increasingly complex statutory regulations. And nor will outsourcing vendors – although they can help in providing information and guidance. But as systems and processes are increasingly automated and connected and the day-to-day number crunching of payroll is managed by computers and robots, payroll professionals are freed up to concentrate on more strategic projects. Like safeguarding employee income through a crisis, calling on the resources at their disposal in information and transaction support. Or supporting employees directly in investigating implications for their individual pay packets.

Payroll professionals at both global, regional and local country level need both the ability to see the bigger picture and to know where to go to find the finest level of detail. This takes a certain kind of enquiring mind, a willingness to gather enough knowledge and expertise to oversee the day to day running of payroll without getting sucked into checking every single transaction. It requires an ability to grasp the important points of a benefits scheme without needing to micro-manage it for every single employee.

And most appropriately for the current time, it requires a cool head in a crisis. To be prepared to work extra hours to meet those ever-looming deadlines but also to work smartly so that you are not overwhelmed.

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