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HIRING A NEW PAYROLL MANAGER? Why now is the right time for a Payroll Health Check.



The time has come where you need to hire a new Payroll Manager. Whether it be your current manager is leaving or you’re in the middle of a business growth stage, this phase of transition is probably going to throw some challenges your way, but that’s not to say you won’t come out the other side in a better business and risk position.


Why you might find yourself hiring a new Payroll Manager

Firstly, let’s begin to discuss some of the possible reasons why you have found yourself in the position where you are looking to hire key personnel in your payroll department.


It is important to understand the why so that we can predict some of the challenges that you might face.


Your current Payroll Manager has departed

For obvious reasons, we have found that the main reason you will find yourself hiring a new Payroll Manager is due to your current one leaving. The circumstances around this, however, will vary.


It is quite typical to have yourself a Payroll Manager who has been with the business for 10+ years. They know the ins and outs of the payroll system, they are highly knowledgeable and they get the job done.


However, the time has come for them to retire and with that, their wealth of knowledge is likely to leave with them.


Other likely reasons for the departure of a Payroll Manager may be as simple as voluntary resignation; the job might not have been right for them, or they have received another offer.


Sometimes a person in a job just doesn’t quite work out and that’s why you need to be sure that the next person is the right fit for the job.


You have introduced a new payroll system

Another likely situation that has landed you in the position where to need to hire a new Payroll Manager may stem from the introduction of a new payroll system.


We find that this is predictable in an organisation that has had a long-term Payroll Manager that is very comfortable and familiar with your old, outdated payroll system.


The organisation has decided that it is time to introduce a new system and this might not sit well with your current staff. Change can be hard for employees to embrace.


If your employee is showing resistance and/or unwillingness to learn the new system, this can cause a lot of challenges. If you are experiencing continual defiance, sometimes the only solution and natural direction from here is to hire a new Payroll Manager that will embrace and work with the new system.


Your current Payroll Manager can nurse the outgoing system till it is replaced by the new system, the only challenge is finding a package that makes it worthwhile for them to stick around till the fat lady sings.


Your business is experiencing growth and you need a larger payroll team

Business growth. Who doesn’t want their business to grow? However, it is important to manage this growth with maturity and ensure that your team, payroll in particular, can cope with expansion.


A bigger business means more employees, more wages, and more complexities. To handle all of this, it is likely that your payroll team is going to need more hands on deck.


The typical Payroll Manager has evolved

You may not have noticed this, but over time the Payroll Manager role has evolved. Historically, payroll people tend to be very precise and used to very small changes. However, we find ourselves in an evolving world where innovation is encouraged.


Recent external changes such as Single Touch Payroll and JobKeeper have forced payroll teams to be more dynamic which is something they haven’t needed as much in the past. This is influencing the sort of person that needs to be in the role.


The role of a Payroll Manager isn’t just about paying people correctly, it is about making the payroll process as efficient as it can be, cutting costs in areas such as overtime, and enabling the business to derive insight from the data with is generated from Payroll and Time and Attendance systems.


Some Payroll Managers wouldn’t see these extra responsibilities in their position description and that is why you might find yourself needing to hire a ‘modern day’ Payroll Manager.


Discoveries that your business may find during the change of staff

With staff transition, comes new discoveries. Whether these discoveries are challenges to face or opportunities to harness, it is important to be aware and ready to evolve.


Discovering lack of documentation

Lack of documentation is something that we come across time and time again. This poses many risks to your payroll execution and may hinder the onboarding process of your new Payroll Manager.


Throughout an employee's tenure of employment, they will make improvements in their everyday processes and fail to document these changes. They might be small improvements; over time, however, this can leave many gaps to be filled when they exit the business.


We find that 50% of the time when an employee discovers or implements a new change in a system or process, they will fail to document it fully or only write it in their personal notes.


As a result, all the undocumented knowledge that person has leaves with them when they depart the business.


As well as leaving gaps, lack of documentation means that other people can't see the process. When you can't see and visualise the process, others can't provide input to make improvements or identify gaps.

The discovery of innocent mistakes

Employees are human and therefore make mistakes. Despite their intent, you may be surprised to find that your current Payroll Manager has been paying employees incorrectly for months (and in some cases years).


We have witnessed in some cases, a Payroll Manager received an incorrect memo or missed an email that described how a public holiday should be paid, and these mistakes might not become visible until a new manager steps in from the outside and looks at the processes with a fresh set of eyes.


Lack of capacity or too much capacity

Oftentimes, businesses will have a highly experienced Payroll Manager who is heavily overworked. Over the years, they may have suggested their workload is too much, but they still get the job done.


The company’s employees are still getting paid, so you don’t see the need to hire an extra body. However, it’s very common to find that when that experienced Payroll Manager leaves and it becomes apparent how much work they were responsible for, the only possible solution is to hire two employees to fulfill their workload.


There are also times where you might experience the opposite, where you have two or three employees, fulfilling the role that could be completed by one individual.


Payroll Health Check

So, by now you are probably wondering how a Payroll Health Check is going to assist you through your staff transition?


To start off let's explain what an AgileXperts Payroll Health Check involves.


Our Payroll Health Check begins by looking at the current state; What are you people like in terms of capability and capacity, and what are your processes?


Processes are key! We need to understand, to a certain level, the scope of processes you have in place and what steps they contain.


Preferably you will have your processes documented so that we are able to validate them straight off the bat. We can then look for gaps in your documentation through interviews and observing your pay runs being executed. This way, we get an understanding of how complete and robust your processes are.


We also look at the pay outcomes from your technical payroll systems. We focus on what your people tell and show us in terms of manual workarounds that need to be completed within the systems.


About 90% of businesses haven’t documented every step that is required to get a successful pay finished. That’s not to say that you couldn’t get a pay run completed, but it’s a lot of effort and exposes the company and staff to unnecessary risk.


Without this documentation (or incorrect documentation), your new Payroll Manager is going to find it extremely difficult to adapt to their new role.


On the contrary, understanding your current state and having precise, exact documentation of processes is going to set your business, and your new Payroll Manager, up for success and avoid the risk of your staff not being paid properly.


Our assessment of your IT systems, processes, people and reports allows us to develop a risk landscape that shows prioritised risks and deficiencies in your entire end-to-end payroll function. We then present your risk landscape in a format that is both understandable and actionable.


3 tips from the Xperts

1. Harness change A transition in staff is a great opportunity to drive change. A new manager has the ability to influence the way your employees work as well as influence a better culture.


Recognise the current state of your culture and identify the culture that you want to influence through change.


2. Be prepared to find something wrong

In the case of running payroll, you really want to fail fast. The sooner you find a problem, the better. The only way you will find these errors is by looking.


Take the opportunity to be on the front foot and discover everything that needs to be changed or altered before your new manager comes in and informs you that it is all wrong.


3. Don’t underestimate documentation

Quality over quantity is important and it is critical to crosscheck your documentation.


As a third party, AgileXperts can review your documented processes whilst they are running and assess the quality of their documentation. From this assessment, AgileXperts can identify if there are steps that your staff take to execute your pay but aren’t documented. These steps need to be captured.


If a Payroll Health Check sounds like the right direction for you, contact us today.


Businesses can email contact@agilexperts.com.au or call 1300 287 213 for free first-step advice on how to ensure your payroll processes can safeguard your payroll compliance. Follow us on Linkedin or sign up here to receive our articles direct to your email inbox.

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