Payroll is More Mission-Critical Than Ever
In this article, you will learn what has been the impact of COVID-19 for payroll providers and how payroll providers can adapt to the “new normal”.
We are living through the biggest global crisis that many of us have ever experienced. Due to the outbreak of COVID-19, daily lives and businesses around the globe have been severely impacted. National borders are being closed, schools and businesses have been shut down by the authorities, those businesses remaining open have instituted work-from-home policies, curfews and restrictions on movement of people have been put in place.
While many business functions slow down during times like these (e.g. Production stops, Sales slows, Professional Services get delayed), Payroll is one function that needs to step up and its mission-critical role becomes more clear than ever. People still need to get paid – whether the nurse working overtime in the hospital, the office worker working from home or the employee out on sick leave. If people stop getting paid, everything starts to come to a grinding halt.
How Does COVID-19 Impact Your Payroll Operations?
As a Payroll provider, you need to make sure that your team continues to deliver reliable payroll services to your clients in this time of crisis. Your clients and ultimately the overall economy depends on it. They need you now more than ever.
However, your Payroll operations might be impacted in a number of ways:
- Some members of your team might be out sick themselves or they need to take care of elderly family members or kids at home, limiting their ability to look after their work responsibilities or requiring more flexible work arrangements (e.g. part-time, flex-time work schedules).
- When working from home, your staff might not be able to access all the tools and documents that they would normally be able to access, especially if your systems are on-premise solutions and files and documents are physical hard copies
- Some of your processes and procedures might rely on physical presence – for example, physical sign-offs or your to-do lists/checklists on the office whiteboard will obviously not work when your team is working remotely.
- In case of missing data or information (e.g. no accurate timesheets), you may need to process temporary, emergency pay cycles based on the previous month’s values to make sure that people get paid, accepting those retrospective adjustments later on.
- Bank systems might get impacted, and especially in countries where payment of employees relies on physical transactions (e.g. bank checks being distributed to employees) alternatives will have to be considered.
- In many countries, statutory filings to tax or social security offices still require physical submission of document and lodgments which could also get impacted by the lack of mobility.
- At the same time, governments are putting in place emergency relief programs for business and employees, for example in the form of tax reliefs and loosening of sick leave rules. So your Payroll team needs to quickly update its payroll calculations and make sure that the new rules are reflected in how deductions and withholdings are being applied.
Needless to say, all of this puts extraordinary stress on your payroll service team and forces them to improvise and adapt. While they might be able to compensate for this exceptional situation by working overtime and putting in extra effort for a while, it is clear that you need to have a plan to mitigate the ongoing impact on your business.
6 Ways to Adapt to the “New Normal”
While the current COVID-19 crisis might seem like a temporary disruption that hopefully will soon “blow over” (some experts project a recovery by the warmer summer months), none of us knows how long this particular crisis may last. More importantly, it should serve as an important wake-up call for all of us. The next crisis might be just around the corner. What seemed unthinkable just a few days ago – closed borders, curfews, shut down schools and public life, closed businesses – suddenly has become reality. And we need to be prepared for the next disaster – virus, hurricane, earthquake, tsunami, meteorite, etc. – as unlikely and unthinkable as it may seem.
So how can you adapt to the “new normal” under this crisis and relieve the burden placed on your team under these extraordinary circumstances? We believe there are 6 important things any Payroll Service Provider should be looking at:
1. REMOVE PEOPLE DEPENDENCIES: Review your roles and responsibilities and determine backup plans in case of individual team members being out of the office. Establish automated delegation routines that will give the replacement/delegate automatic access to communications and documents in case the many process owner is out of the office.
2. DIGITIZE YOUR WORKFLOWS: Try to minimize the reliance on physical documents and physical, in-person process steps in your payroll operations. Digitize your workflows and documents and move them into the cloud to assure maximum resilience (information can be automatically backed up too many different places in the cloud). By digitizing your workflows, you will also have central, remote transparency how your team is tracking in terms of getting their work completed and you will be able to stay on top of things.
3. AUTOMATE YOUR PROCESSES: Reducing the need for human intervention can further minimize disruptions. If you can establish no-touch processes, employees being out of the office will not impact your ability to process payroll. Especially when the technology is built in a resilient and redundant manner. For example, if you automate data feeds from your payroll to your accounting system, you won’t have to rely on the local payroll or finance team to create the data extracts that your accounting system requires to issue payments.
4. PROVIDE BETTER COMMUNICATION: Reduce reliance on in-person communication which also has the negative effect of not being documented anywhere. For your team communications, move from ineffective and insecure tools like email and shared drives to more modern communication and collaboration tools that provide the ability to message team members or log requests in the context of the specific process or workflow. This will allow you to communicate more effectively and securely as a team.
5. CREATE SECURE REMOTE ACCESS TO DATA & FILES: Store all your data and files securely into the cloud, well organized in a document archive. Move from physical files (e.g. paper payslips) to electronic files (e.g. online employee portal). That way you and your clients can access important information any time, from anywhere. For example, if you need to run emergency payrolls based on previous months’ data, you will have the data right at your disposal.
6. PLAN AND TEST: The current crisis reinforces the importance to anticipate different kinds of emergencies – impact to staff, impact to office, impact to technology infrastructure – and carefully plan your response to each. What options do you have to ensure business continuity? What will it take/cost? What do you need to put in place to prepare for it now? Once you have determined your response plan, test it regularly with fire drills so your team knows what to do when disaster strikes.
While the above recommendations will help you to better master the challenges of the current crisis and prepare for future disasters, many of these actions will also help to improve the operational efficiency of your team (e.g. automating previously manual activities) and will create a more powerful service experience for your clients. So there is no time to delay their implementation.
In case you have questions on how to get started, at Payzaar we have a lot of experience helping payroll providers transform and modernize their payroll operations. And we can help you move your payroll operations into a secure, cloud-based environment quickly, within a few days. Please reach out to our team and we would be happy to help you: email@example.com.