How to hire the right payroll staff, and avoid major employee underpayments

payroll managers confused

Australian Payroll Association founder and chief executive officer Tracy Angwin. Source: supplied.

With the spotlight on employee underpayments in Australia at an all-time high, it is vital employers proactively look at their payroll operations if they haven’t done so already. 

Qualified staff are an integral part of any organisation, yet the reality is the specialist set of knowledge and skills that are required to run the payroll function are often underestimated. This is why it is crucial to know what to look out for in potential candidates when hiring payroll staff members.

Here are seven common mistakes to avoid when hiring payroll staff:

1. Choosing candidates with hiring system knowledge, rather than payroll knowledge

More than 70% of organisations look to employ someone with previous experience using a specific payroll system or application. Although this will be useful for short term or temporary roles, it is more important to hire a person with a strong technical understanding of the payroll function. This is because they can apply this knowledge to quickly pick up any mainstream payroll system. 

2. Underestimating company cultural alignment

Too often the bigger picture is overlooked when selecting a candidate for their immediate skill set or experience. Longer term retention is directly related to how ‘happy’ people are in their work environment and that often means how aligned they are with company values, goals and culture. 

3. Lack of client service and delivery mindset

The modern day payroll function is driven by a high client service ethic and a focus on servicing payroll customers, both employees and management. A failure to recognise this by not distinguishing it from the outdated perception of payroll as just being a back office or administrative function is a common mistake when hiring payroll staff.

4. Not incorporating a personal development plan from outset

A key success factor to any long-term hire is a clear plan for that individual’s personal development from the very start of their employment. People are more likely to be fully engaged if they can visualise how they will evolve and are given the opportunity to develop personally. 

5. Never assume a candidate’s intentions during the hiring process

The true value of the payroll function is fast being recognised and the market for high calibre payroll staff is becoming increasingly competitive. Most successful hiring companies know this and develop techniques to promote their organisations at various stages throughout the hiring process. 

6. Insufficient testing of payroll knowledge

The vast majority of payroll people are still being hired on the assumption that if they have completed a certain role, or previously worked with a certain organisation, their technical payroll knowledge must be at a certain level. This is not always the case. To get an accurate picture of a candidate’s level of technical understanding of the payroll function, there are testing tools available, such as one on the Australian Payroll Association website.

7. Failure to showcase the value of the payroll function beyond the payroll team itself

In most organisations, the payroll function can be somewhat isolated and disconnected from the broader business. The most attractive organisations to candidates demonstrate how and where the payroll function is recognised and valued within the organisation. Always let a potential candidate know how the payroll function will relate to the larger business during the interview process. 

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