Much has been written about COVID-19’s impact on the workforce, on HR and companies in general. I’m going to drill down into how it’s impacting payroll, because well, my professional focus has been on payroll for almost 30 years now.
Resilience: The ability to recover quickly from illness, change, or misfortune.
This is the single most important and visible quality of payroll departments I’ve seen lately: Resilience. How have payroll departments been able to recover quickly from the impact COVID-19 has had on the workforce, companies and the regulatory landscape? The answer is, as any consultant would probably say: it depends.
One great example of resilience I saw was where one customer anticipated their state would issue a work/stay at home order, so in advance of that they sent the payroll department to work from home to practice running payroll remotely. Before things got crazy, before the stakes got higher. They learned a lot and incorporated that back into their processes and practices. When the real work/stay at home order came, they were prepared.
Another example of resilience I saw was a customer who found a quick way to move from working with paper forms to using electronic versions of the same forms. As they moved to work-from-home, forms could be routed via email and information flowed just fine.
Other examples are not as pleasant to report on. Payroll staff could work from home but didn’t have IM or screen-sharing apps, or conference lines to use for group-based work. Many payroll staff had desktop computers, not laptops they could easily take home for work. Some staff didn’t have good work environments at home. At some customers, critical processes revolved around one person, and with that person unavailable it was difficult to get the work done.
On the systems-side, SAP has done a good job gathering and sharing information on the technical aspects of COVID-19-related changes required for payroll. Unfortunately, SAP can’t deliver all those changes ready-to-go, so most customers had to perform some local configuration and customization to comply with the new regulations. And some customers had more difficulty than others. Those with multiple time systems fared the worst, followed by those who had local bargaining agreements or work-time benefits such as SUB, Disability or Indemnity policies. And then there were some who no longer had the technical capability to create and implement the new system configuration. None of these changes were very technically difficult, so if it seems that they were then that is an area to work on.
These COVID-19-related changes had to also be communicated to employees, supervisors and managers. How well did that go for you? Did you have well-established communication channels and practices or did you have to work a lot to reach the right people?
Most every payroll department also relies on external providers. How well did they perform? Did they keep to their SLA? Or did they give you reason to evaluate other providers? My experience has been mixed, though most have performed fine.
So all of this is challenging for payroll in any given country. Many of my customers have SAP / EC Payroll installed in multiple countries, so multiply these challenges by the number of countries you’re in and it starts to get more complex. The Global Payroll Association had some great webinars on COVID-19-related regulations around the world. Each country has its own responses for COVID-19, and companies really need local expertise to understand and implement them. And with reduced working times and other work-from-home restrictions in place for a number of countries, managing this globally requires some local resources that are also in short supply.
So what has Payroll learned from this?
Everyone would like to be resilient, and that doesn’t just happen. We make systems, organizations and processes resilient by focusing our intention to Simplify, Streamline and Standardize the work. It doesn’t and won’t just happen unless we focus on the three S’s and learn from how COVID-19 has impacted us.
We can start with reflecting on the difficulties we have had with the payroll function during this time, and then start pulling on that string to see where it leads. A root-cause analysis, and then an action plan to address it. This is pretty obvious, of course, but the difference lies in execution. As payroll people we know how important execution is – we execute payroll all the time, and we know that when we do it properly and consistently, we get a good result. We need to apply that same execution focus to resolving the problems we’ve had during this challenging time.
And the time is always right to simplify, streamline and standardize payroll; both the SAP / EC Payroll system and the business processes in the payroll department. Complexity is the enemy of payroll, and the three S’s are your best weapon against it.
And yes, this all takes effort. You can start with the smaller things, but it’s important to simply start. This will give you some momentum and free up resources to take on more. And you can always call on us or your favorite SAP / EC Payroll consultant for help.