Building a flexible and resilient payroll function

Before the COVID-19 crisis, most organisational redesigns focused on increasing efficiency. Chris Sparrow, Sales Director for HR & Payroll at Civica, explains why the pandemic now shows the need for resilience.

Coronavirus has shown how a major event can impact us in ways we couldn’t have imagined. Most organisations will have considered in-house payroll versus a managed service at some point. But how many will have factored in a global pandemic?

We understand our customers strive for efficiency and our payroll software supports this. But by becoming too lean, you may limit your flexibility to respond to the unexpected. This could result in valued employees receiving incorrect or late pay, to legislative non-compliance and damaged reputation. It’s a reality few organisations would want to consider. But it’s important that you do.

Here are some steps you can take to build resilience in your payroll function:

1) People

If a third party manages your payroll, there will still be people who are key in that process. An unexpected absence would cause considerable difficulties. However, if like 72% of organisations in the UK you process payroll in-house, you rely on a small number of highly-skilled people to get the job done. This means the risk is even greater.

Why not try:

• Regularly analysing the demographic profile of your team
• Creating a succession plan (56% of payroll departments don’t have one)
• Protecting against knowledge silos
• Supporting continuing professional development
• Investing in training new employees to use your payroll software.

2) Business continuity

Your business continuity plan should include a way to pay employees in an emergency. Preparing and maintaining a plan is a serious task which needs dedicated management.

Think about:

• Reviewing the main business areas, critical functions, key employees, partners and subcontractors involved
• Developing a communication plan including key contacts and the chain of communication. Ensure you keep it up to date
• Testing scenarios for remote working and ensure the IT infrastructure to support it is in place
• Keeping critical information isolated, protect hard copies and create a backup strategy
• Educating employees and stakeholders
• Continuing to test and improve the plans.

3) Physical office and data security

A payroll department holds a large amount of personal data. This comes with significant legal responsibilities. In an emergency situation you will need to juggle these with your duty of care to employees. Ensure there's a secure way to access protected data and assets from outside the office. This will be important if home working is necessary.

Have you considered?

• How you will protect access to data and still run an effective remote operation?
• Who will have access to the office and how will you control and track this?
• How you will control physical access to paper-based confidential information?
• How to control access to servers – both physical and remote
• If employees have regular training on security issues and preparedness?

4) IT infrastructure and security

Reports show an 800% surge in cyber-attacks during the COVID-19 pandemic. Payroll has lagged behind HR colleagues in moving data to the cloud. Two-thirds of organisations still have payroll data residing on premise. This offers a real data-security challenge.

You could also think about:

• Asset management to action the latest software upgrades and ensure hardware safety
• A UPS system to provide a continuous source of power and planned switching off the servers
• Backup and redundancy management
• GDPR proof your data management. Use secure and encrypted channels for communication and data storage
• Policies and training to ensure the responsibility required from employees
• User role management and password policies
• Implementation of authentication mechanisms
• Using anti-malware software.

Our cloud software and managed payroll services can help you build resilience in your payroll function. We’re a leading supplier to local government and education: let’s discuss how we can help your organisation.