PAYROLL PROBLEMS: We chose the wrong technology
It seems like every major enterprise in Australia is undergoing, or expecting to, undergo some sort of underpayment wage scandal. We recently learnt that 73% of food businesses audited by the Fair Work Ombudsman were non-compliant for paying their staff correctly to legislation.
Why does this keep happening?
We’ve been working across major payroll transformations and payroll project rescues (including Queensland Health’s major $1.2B debacle) for the last 10 years and we can assure you it is not because these businesses are doing it intentionally.
Australia’s payroll and awards rates pay system is incredibly complex. Add that to a raft of technology across HR, Finance, Legal and Payroll and aspirations of fast digital transformation and you have a recipe for disaster.
Unlike almost all other Western economies, which use a single minimum wage threshold, determining minimum wages in Australia depends on dozens of factors including age, education, time of day, day of the week, location, individual responsibilities, time between shifts, temperature and even the specific tools employees use. And this is just in payroll. This doesn’t cover off a raft of Human Resources and Legal compliance regulations that are outside of the payroll scope yet need to be deeply integrated into it.
So what is the solution?
A number of payroll technologies are touting their wares and soothing the ears of alarmed payroll specialists with their award interpretation engines. These technologies are excellent – often they are automated and provide the best-of-breed award interpretations possible.
However, the problem lies in the data, people and process.
A payroll technology can only provide the correct award interpretation if the data is correct, it’s applied and extracted properly and disseminated to the right people and managed with the correct process.
Too often than not, we work with customers who have spend hundreds of thousands on payroll technology and then are stumped to implement it. Years go by with hefty licensing fees but no outcomes.
So what is the right solution?
The right solution is to do your homework MONTHS before even considering a new payroll technology. This homework requires extensive scoping, requirements gathering, process documentation and business process management to understand what payroll beast you’re dealing with. This often isn't just limited to the payroll team – this involves mass stakeholder engagement across Operations, Finance, Legal, Payroll and Human Resources.
And it’s not all that easy.
Eliciting and extracting this information is time consuming and requires specialist expertise to map the information, data locations and current state processes. If this is done correctly, then the business can start to develop what the ‘future state’ looks like. Again, this is not an easy task – it's about questioning the best method, anticipating future challenges and how all stakeholders will be affected. Then it’s finally over to a technology discussion to choose the best technology, integration and data migration service to meet the current and future state needs.
Businesses often miss these critical steps and will go headfirst into purchasing a technology – then throw up their hands at a failed implementation with the complaint that the technology is wrong.
If you’re experiencing one of these challenges and are unsure where to step to next – line up a chat with one of our Payroll Project Xperts today to roadmap your path to success. We can help guide you to a successful implementation with your existing technology, rescue your project or help prepare you for the perfect implementation from the get-go.