Seven pandemic payroll problems

When times are hard, it feels like everything else is a struggle as well! And having payroll problems on top is just the last straw.  
We asked businesses what made their lives even more difficult during the Covid-19 lockdown, and these were the top seven issues they came up with.  

To note: most of these problems impact a lot of businesses during 'normal' times too. 

1. "Our payroll processes are heavily manual. (Right at a time where we needed to be fast, flexible and efficient)"

Payrolls are never static, and it takes considerable effort to confirm, complete and accurately process them. For many businesses, manually finalising a payroll requires a significant investment in time and effort.

So, with workforces stressed and under lockdown, it was all the more difficult for payroll staff to gather the information they needed from each business team, handle timesheets, check for errors, validate data, and adjust pay components where allowances had changed. And when someone had a pay change midway through the frequency, and the system didn't automatically address it, there was even more anxiety. And then there were the tedious, high-risk manual calculations and adjustments for terminations and redundancies.

When a payroll system isn't date effective or position driven and relies on manual processes, it becomes a bottleneck of inefficiency. And equally frustrating - the older batch-driven payroll systems are painfully slow when you need to be nimble.

2. "Holy heck, it was tough to get our compliance right!"

Compliance was another touchy subject for many businesses. That's legal, contractual, or job skills and payment compliance.

The Holidays Act in New Zealand and the complexities of Award Structures in Australia are tough enough to understand as they are. But without the ability to check and validate the payroll against the legislation, compliance became a Covid fuelled nightmare.

Managing contract compliance and hours worked by hand wasn't fun for payroll staff either. With most legacy payroll systems reliant on manual processes, it was tricky to ensure that skilled, qualified people were paid according to their role.

3. "Just what we needed. A challenging payroll system."

As if businesses didn't have enough on their plates. Hard-to-use payroll systems were another major gripe for many already under-pressure payroll teams.

Generally, payroll systems – especially the large ones - are not intuitive or user-friendly. And they're certainly not the type of system that you can just pick it up and run with. For these big boys, users require intensive training and updates, and access to screeds of manuals and complicated instructions on how to use the system.

All of which makes other employees downright scared to step up and do payroll at the best of times. As you can imagine, during the pandemic, few were willing to volunteer to shoulder the responsibility for dealing with complex, multifaceted compliance issues, due to the largely manual nature of their payroll systems. (See 2.)

To note: This is a frequent driver when organisations go-to-market for a new payroll system. They're sick and tired of complicated and challenging systems, and hard-to-generate reports.

4. "It was just so hard to get stuff right. We were doing fixes after the payroll went to the bank"

Another series of common complaints was the lack of visibility of information, dealing with variations across the pay, and managing errors.

Even in 'normal' times, it can be challenging to spot why the payroll amount differs from one week to the next. And unless you have a trained eye (and a good dollop of experience), you may not realise that there are errors in the system.

So the whole sanity checking of information to make sure payroll errors were identified before the pay was sent to the bank was tougher than ever.

(If it's any consolation, this does happen, and more often than we probably like to think. Errors are frequently corrected after the payroll has been run and sent to the bank).

5. "Will someone just pull finger and sign off the payroll?"

Getting payroll approval was another notable issue.

In traditional systems, payroll approval is often a manual process and requires the production of piles of printed reports for managerial review and signoff. That final approval process is a headache for a lot of organisations, even with ready access to the right people. During the lockdown, it was even worse.

6. "Locked down and out of the payroll system"

And then there were the businesses who had a business continuity problem of major proportions. Those that didn't have cloud-based payroll systems and couldn't access their offices to process and initiate the payroll were in a world of pain.

Enough said.

7. "Oh boy, payroll managers are hard to find"

Today's payroll systems can be incredibly complex, and payroll management is a specialist skill. Sadly, we're also short of a new generation of payroll people, as in many ways, payroll is seen as a dying career path.

Those who have hugely sophisticated payroll systems were faced with having no one to run them (through illness or unavailability), so it's been a time of considerable (and unacceptable) business risk.

So, what did the pandemic prove?

It's a sad day when we don't learn from first-hand experiences, and we're all hoping that as we emerge from Covid-19, we won't get to see payroll under fire ever again.

However, based on the seven issues above, we'd suggest that whether it's to survive a pandemic or just do better business, you need a payroll system which:

• Has intelligent, automated business processes to save time, money and reduce errors.
• Has in-built compliance, so your pay is right every time.
• Is simple and easy to use, for obvious reasons.
• Sends automated alerts and notifications to get your payroll perfect before it goes to the bank.
• Supports and enables easy payroll approvals.
• Is cloud-based, so you're never locked out again.
• Doesn't place undue reliance on highly skilled payroll staff – but still performs perfectly.