Updated: Jul 16, 2020
Payroll systems and technology tend to get overlooked, out of date and out of sync. They’re notoriously hard to maintain, especially in fast-changing digital ecosystems and computing infrastructure.
However, unbeknown to majority of the leadership and IT staff, payroll systems represent a HUGE importance in the operations and continuation of businesses across our country. Payroll systems and technology make up a large part of the human capitol management system within enterprises, alongside HR systems, Recruitment Systems and general operational ERPs. They’re interlinked to ensure your staff are looked after, trained, insured and most importantly, paid. Let us not forget the dynamic Australian workplace legislation and payment Award systems that need to be continually updated to ensure correct payment to your workers, and avoiding damaging underpayment prosecution.
With our two decades of payroll projects expertise, we’ve highlighted three significant risks that you incur when you run an outdated payroll system:
1 – Compliance and FairWork Australia Adherence
Many organisations have experienced a growing compliance, workers insurance and Awards entitlements bill for their operational teams. This spans across the Legal, Human Resources, Finance and Operational domains within the enterprise and needs to be integrated. An outdated payroll system, or not properly integrated system, will result in ongoing risk and compliance issues including under or over payment.
Australia has one of the most complex employee protection and payment legislative systems in the world that can commonly be overlooked by foreign built HR or Finance systems. Unless your payroll systems are set up to accommodate differing regulations across the country (or globally), there could be a chance of non-compliance.
2 – Integration Across the Enterprise
A number of enterprises may have a solution for their payroll, a solution for their HR requirements, and their People Management with all of these manually processed with an ERP or a Finance system. Integration and interoperability are often a huge driver for enterprises, but often can be costly or poorly scoped.
Generally, the ecosystem of these applications are not integrated and pose a risk of multiple human and data errors along the payment cycle, as well as creating additional work for Payroll and Accounts teams, or HR.
3 – Data in Silos
Data in silos creates a risk across many organisational departments including local and global payroll systems. With enterprises moving from on-premises data storage, to cloud or hybrid cloud models, payroll and HR data can be stored in many ubiquitous enclaves that are hard to find, manage or backup.
Additionally, the outdated process of having new employees fill out paper versions of on-boarding payroll and HR documentation again present the human error and data management risks, especially if these documents are not entered into the payroll or HR systems properly, without a traceable record outside of an email exchange.
If you truly want to automate, scale and modernise your payroll system – with the benefits of cost reduction and cost of manual labour – you need to prioritise your payroll and HRIS systems. This may mean doing a complete risk audit of your existing systems and seeing where you can improve across people, process and technology.
To learn more about our payroll project work with KFC - READ HERE.