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Strategic payroll can be an enabler to get ahead in what is an extremely competitive business landscape.
Businesses often fall into the trap of viewing payroll as merely a payment processing function, and not a source of data. The Access Group recently released a paper that examined how businesses can utilise their payroll to create a competitive advantage, in what are challenging times.
Kerry Agiasotis, president APAC at TAG, believes that too many businesses are foregoing the potential of payroll data: “The research highlights the often-overlooked goldmine of data that’s right in front of us and offers tangible steps for businesses to turn this information into a strategic asset, assisting organisations to make informed decisions and drive efficiencies.”
So, what is payroll data? It includes key information about subjects like salaries, benefits, taxes, overtime, leave and other aspects. Collecting and analysing this data can help boost business-wide efficiency, which enhances decision making, making it a legitimate strategy that can assist in elevating business outcomes on several levels.
At the moment, only 28 per cent of business leaders believe that their payroll system extends beyond the point of merely paying people their wage, meaning they are missing out on the other aspects that payroll data can enhance. Sixty-two per cent, however, show a willingness to want to utilise their payroll to gain these assets.
“Any organisation without a defined payroll strategy which mitigates the risks involved in paying employees and looks to add value to the employer by the use of technology, data, and insights is potentially missing a competitive advantage,” said Tracy Angwin, director of the Australian Payroll Association.
Mitigating risks is a key factor that strategic payroll can provide. The costs of non-compliance with state or federal law can be extreme, as seen from the recent fiasco that occurred at CommBank, where they failed to “implement the required system of regular reconciliations and top-up payments necessary for ensuring their employees were receiving their basic lawful minimum entitlements.” This resulted in fines totalling $10.35 million.
Getting hit in the pockets isn’t the only consequences as brand tarnish and employee trust and morale also take big hits, which can often result in a decrease in productivity and staff turnover. Only 40 per cent of respondents rated their ability to use payroll data as a means of staying on top of compliance requirements. In contrast, only 29 per cent of those who do not use payroll achieve this result.
As businesses continue to power through what has been a tumultuous start to 2024, different approaches could open new pathways for businesses that allow them to regain that optimisation of their workforce that a number of them are lacking.
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Compliance often refers to a company's and its workers' adherence to corporate rules, laws, and codes of conduct.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
