It’s always the most fascinating time of year for us at Australian Payroll Association, analysing the outcomes of our annual Payroll Benchmarking Report.
What’s astonishing in the 2014 study is the differential between the average costs of a payroll operation and those of the top performers. In every category (from less than 50 employees to more than 10,000 employees) the top performers had costs less than 50% of the category average. In some categories this was as low as 26%.
So how do they do it?
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Since the survey was completed, we have spoken with some of the organisations with top performing payroll operations to find out what they are doing differently. What we found is that the conversation tended to focus on main areas.
1. They have the right people in payroll
Not only do the top performing organisations put an emphasis on finding the right people, they have strategies in place to keep them. The top performers understand the skills they have in their payroll teams and have ongoing training plans to develop their payroll professionals. This could be by way of training to fill knowledge gaps or by providing or supporting formal payroll qualifications.
They also understand that people work best in an environment that suits their personality. Top performers put an emphasis on developing a payroll team culture, including continuous improvement, recognising value and having fun at work.
2. They use technology well
All top performers are utilising their investment in technology and understand where the areas for improvement lie. Key requirements of the payroll function including technology have changed dramatically over the past decade and continue to evolve.
Top performers understand this and look to improve on the use of technology by both forming a close relationship with their suppliers as well as continually looking at new payroll technology developments.
3. The organisation recognises payroll has value to add
Not only is there a shift towards a client service ethic in the payroll departments of top performers, but the organisation as a whole understands and appreciates the importance of the payroll operation.
Top performers report that the more value they add to an organisation, the more they are recognised, and the more discussion managers have about integrating payroll in business decisions.
Word of warning: The key to all the organisations that we spoke with was that none of these items in isolation would have put them into the top performers’ category. It was only when all three things were working in harmony that the payroll operation could truly contribute to business outputs and operational efficiency to put them into the top performer category.
We congratulate the top performers in the 2014 Payroll Benchmarking Study and look forward to watching their continued progress in the year ahead.
Tracy Angwin is the founder and managing director of the Australian Payroll Association.