Improving Core HR & Payroll for the Future of Work

The last few months have been an extremely trying time for organizations HR and Payroll departments although the degree of struggle has varied drastically. With the global pandemic hitting, companies were forced to transition much of their workforce to remote environments and the level in which organizations were prepared was all over the map.  While some organizations have been supporting a remote workforce for years, others had a culture of five days a week in the office with desktop computers and no remote tools in place. With HR and Payroll teams working remotely, they were tasked with learning new tools (JAM/Zoom/Teams, etc.), adjusting communication methods (Instant Messenger, Video Meetings etc.), creating and delivering new policy guidance to the rest of the organization, all while ensuring operations are intact. Beyond all these challenges, they too are dealing with the challenges from the COVID-19 pandemic such as overseeing their children’s education, acting as caretakers, worrying about their own physical and mental health, and so much more. Meanwhile entire industries, have lost revenue impact of billions of dollars  leading to quarterly results with a decline over 90 percent year over year.

When looking at Payroll, there is no ability to push dates or sacrifice quality. During the pandemic, it has been more critical than ever to pay people correctly and in a timely manner even when it means interpreting and implementing evolving complex legal changes and company policies. For example, many organizations had to lay off or furlough large amounts of people, which involves mass processing in HR and Payroll systems. Many of these organizations had been steadily growing for nearly a dozen years without a single furlough, so the capability might not have even been configured into their systems. 

Governments around the world are trying to help their constituents manage resulting in legal changes Payroll departments must comply with. In the US, the Families First Corona Response Act (FFCRA) and Coronavirus Aid, Relief and Economic Security (CARES) act requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19 along with many other changes. On top of this, leadership at many organizations decided to roll out changes in an effort to help their employees. For example, Starbucks made a decision to pay employees even if they didn’t show up for work. That is a terrific and generous policy, but is no small feat to make this a reality across almost 10,000 stores and over 200,000 employees. Most hourly employees only get paid based on hours worked from a time clock. To pay people for hours that aren’t coming from a Time & Attendance system could require big system changes.  

When you look at what is required to implement these company and government changes in a rigid timeline, you’ll see it is quite complex and includes things such as:

• Evaluating changes
• Configuring your system,
• Testing
• Fixing issues
• Going live in a timely manner to get people paid correctly.

All the while, HR and payroll departments are responsible for a variety of other tasks within the organization beyond the normal such as: Helping employees take time off including mandated policy adjustments, helping employees adapting to remote work, handling request for financial assistance due to challenges such as a spouse losing a job or medical necessity etc. 

In many cases HR & Payroll departments are far busier day-to-day than they were prior to the pandemic.  The challenges have been significant and it is clear that those who struggled with HR & Payroll prior to the pandemic have seen their challenges exacerbated.  

So how can organizations improve going forward? 

Optimize & Standardize  

Too many organizations have outdated and customized processes that make it hard to adapt to new company policies or unexpected legal changes. Due to the fact their system has been so customized, applying a change to the system requires a tremendous amount of effort to get it into a production environment, which ends up being expensive. 

Organizations must occasionally revisit processes and look to see if there is a better way of doing things. In Payroll, for example, rather than a person running simulations or reports trying to find something that looks off, is there a way for the system to do those audits and point out exceptions?  

Organizations need to revisit existing processes with an open mind and have honest conversations about ways to improve their current processes. Far too often I have heard the dreaded words, “Well that’s just how we have always done things,” without any appetite for changes. Changes can involve adopting a standard solution that that didn’t exist when they implemented or looking at the latest technology to see how it can improve processes.  

Digital Transformation 

Although we have been talking about digital transformation for years, it is clear from the pandemic many organizations are still far behind. I recently saw the following on social media which I found funny yet alarmingly true. 

Just as organizations who were not prepared to work remotely struggled, those with outdated software struggled as well. There were challenges accessing systems and having to deal with VPNs and on-premise infrastructure while at home. Some organizations did not have any self-service in place and all of a sudden, the number of requests coming into HR and Payroll tripled.  

Organizations need to provide easy access to employees with self-service being the minimum and mobile being the expectation. Beyond that, a personalized experience with chat-bots and machine learning are the next step to further elevate the employee experience and reduce the workload on HR and Payroll for the future of work. 

One thing that is clear from talking to customers and hearing so many tremendous stories is while I have always respected the work of HR and Payroll practitioners, my respect has grown significantly. It has been wonderful to see the resiliency, determination, and focus playing a significant role in ensuring organizations kept running during this unparalleled pandemic. It certainly was not an easy task, but as usual, HR and Payroll were up to the challenge.

Continuous Improvement

Big changes can feel overwhelming when staring at a complex and customized deployment but look at areas that require a lot of manual work and work your way towards a more holistic digital transformation. Come up with a plan and timeline that works for your organization and start there. As we have seen from the pandemic which is explained by the graphic, many organizations are changing whether they made the decision to do so or not.

Learn More

Do you have other ideas or suggestions for optimizing Core HR and Payroll systems? Feel free to add your thoughts as I always love to hear what people are doing in this space.

For another perspective of how you can prepare your HR and Payroll Systems for the future of work? Here in this upcoming webinar: The Future of Work is Now! Ensure your HR and Payroll Systems are Ready on August 13th at 9 AM EST