In recent months, rocketing inflation and rising interest rates have underpinned a cost of living crisis felt by individuals and businesses alike.
Even with many companies doing all they can to increase salaries, offer one-off cost-of-living payments or boost benefits, worker wages are still falling in real terms. This means employees are increasingly worried about how far their pay packet can stretch with payslips being scrutinised like never before. As such, the pressure is on employers and their payroll solutions to ensure pay runs are on time and accurate.
Yet the latest research shows that payroll mistakes are widespread. Likely because payroll is incredibly complex — it has multiple calculations within it and relies on precise data inputs as well as great security processes to ensure that pay is delivered in a timely, accurate, and compliant manner — and, more often than not, because many businesses rely on manual processes treating it as another administrative task.
But with the cost of living crisis showing and received payroll wisdom stating that employers only get two chances to get payroll wrong before they lose the goodwill of the workforce, it means HR teams need to ensure they’re doing all they can to deliver.
Therefore, to ensure that your payroll solution lives up to staff expectations in the cost of living crisis, below are five tips to help.
1. Accuracy needs to be centre-stage
With payroll bosses saying that pay mistakes just won’t cut it with the workforce, payslips have got to be right every time. Yet, this can be difficult. Even in less cash-strapped times, employers often manage multiple pay runs, process for different entities, and update new details and data as well as trying to ensure reporting and security are compliant and pay is accurate. Often this is done via manual inputs by HR teams who are being pulled in multiple directions at once so it is easy to imagine how mistakes can happen.
One way around this is to use a managed payroll solution that integrates seamlessly with a modern HRIS. What this does is ensure that any changes in the main HR system are automatically updated in the payroll service, meaning no double entry of data which can help payroll stay mistake-free, whilst digitisation reduces the risk of human error.
Having your payroll as a system-integrated module can also give real-time oversight of data to HR teams, meaning they can check, and then forestall, inaccuracies before pay runs occur. And, working with a managed payroll provider means that should any issues arise, a team can be on hand instantly to troubleshoot.
This puts accuracy at the heart of the payroll service which is crucial when the workforce is increasingly anxious about their pay.
2. Ensure that your payroll provider supports reactivity and change
Many employers are doing everything they can to help staff in the cost of living crisis. Lump sum payments, bonuses for energy bills, increasing salaries alongside rocketing inflation — often targeting those most in need.
Yet, this changing pay landscape can often be a headache for those tasked with looking after payroll. Changes to pay scales between runs and top-ups to pay all need to be accounted for. Here, having payroll as a managed module, as part of the HRIS, can ensure that any updates are reflected accurately — the result of any changes being automatically updated across all modules.
Furthermore, a payroll provider that delivers real-time access to your data can help auditing to ensure vital accuracy prior to pay runs whilst integration with the wider HRIS can be a world-class insights tool: giving HR teams holistic data on workforce pay levels which can underpin tailored, resource-effective, and likely changeable, cost of living support.
In addition, the best providers often allow personalisation, giving clients the chance to change pay run times or expand to multi-schedule delivery — which might be key for staff that want access to earned wages more often.
3. Free up time for HR to focus on much-needed people solutions
When payroll is just one more administrative task that HR teams have to complete, at a time when business and people challenges are mounting, it’s easy to see how this leads to errors.
However, if a reliable managed payroll provider is partnered with — here, ISO27001 certification indicates good data storage and compliance processes; whilst the Cezanne HR smart managed payroll solution, for example, ensures that statutory payments reports and legal HMRC obligations are met — HR can be taken out of the process as much or as little as they want to be.
This doesn’t mean they lose autonomy or oversight — real-time access to data keeps them in the loop as and when they want; as do responsive payroll experts — but it does free the vital HR cog up to better help guide the business and its people through this difficult time without worrying payroll mistakes will be made.
4. Understand payroll as a key financial wellbeing and engagement tool
Pay is often considered a hygiene factor. It’s something that — no matter how hard and time-consuming the behind-the-scenes work is to ensure salaries are paid promptly and correctly — employees come to expect without any issues.
Yet great payroll can be so much more. It can be the anchor in a financial wellbeing strategy that places the employee at the centre. If employees can guarantee they’re being paid on time and correctly each month and can access digital payslips whenever they need, they have a better chance of preparing for lean periods — as well as communicating issues that their employer might be able to help them with.
Furthermore, if they come to trust that their most sensitive financial data is being looked after securely, this, along with timely and accurate pay, can help strengthen engagement and trust bonds between employer and employee. Critical for talent retention and attraction and continued productivity at a time when employees might just be considering their options.
5. Digital payroll solutions can make HR more effective
With HR often considered a key strategic business partner, a function which can guide leaders on how best to help their people during uncertain periods, using a digital outsourced payroll can be an effective way to ensure they’re doing this — and it needn’t cost the earth.
For example, Cezanne’s HR smart managed payroll solution has pricing tailored to client needs, and doesn’t increase costs based on the size of the workforce. This means no worries about spiraling outlay if the workforce expands once the economic outlook has improved.
Using a managed service also means getting access to data and reports instantly, and not pulling them from excel sheets or trawling through multiple records or systems, as well as access to critical updates such as HMRC’s Data Provisioning Service (DPS).
And, with seamless HRIS integration, as Cezanne HR’s solution offers, it means all vital people information is in one place for HR to access in a friction-free manner. Again, giving people experts time to do what they do best — which is helping their organisations and people during this cost of living crisis.
Author bio: Dan Cave is an award-winning HR journalist and editor. He has been reporting in the HR space for over five years and works across the business press.