There are a lot of functions in HR, but Payroll is by far the most important. While this is fairly obvious, sometimes I have to explain it to people.
Payroll has weekly, biweekly, semi-monthly and monthly deadlines – and more if you count tax remittances and filings. No payroll manager comes into the office on a Monday as says ‘Oh! We forgot to run the weekly payroll last week. Oh well, let’s just run it now and pay it on Wednesday’. If you don’t pay people on time, they will complain loudly and flood the call center with complaints. And they might not come to work. Production lines shut down, people stop selling, marketing, managing, counting beans and so on. At least, that’s what I hear – I’ve never been late on a payroll so I can’t say what it’s like from first-hand experience.
There’s not much room for error in payroll. If we don’t pay people accurately, most times they will notice and they will be very upset. Unless we over-pay them, then they are upset when we ask for the money to be returned to the company. If we miscalculate employee pay on a widespread basis, see the above for reactions. If we miscalculate taxable wages or taxes then there could be fines and penalties imposed. If we remit garnishments late, we hear about it from state agencies and all those ex-spouses. Or so I hear.
There are more reasons payroll is the most important HR function, but I like to keep my blogs on the short-side so I’ll stop there. Other HR functions are important, that is sure. They just aren’t as important as payroll.
Oh, about that ‘unless…’ part in the title. Payroll is the most important HR function, unless it reports to Finance. Then, it’s the most important Finance function. See above for the reasons.