Rewatch our CIPHR Connect partner RSM on CIPHR’s stand at the CIPD HR Software Show (filmed on 13 June 2018)
Integrating your payroll and HR data is not only cost effective, but significantly progresses your company towards the digital data age. Discover how integrations can work, the challenges which may arise and the benefits found in improved management reporting and compliance processes.
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So a statement there. Finance and HR must collaborate to build momentum. You’ve got two different types of people. Without generalising, without stereotyping here, but we’re, I’ve just been on a two-day communications course, not because anyone suggested that I needed to go on one, and, but it’s very interesting in terms of if any of you have done any work around communication styles, social styles, you’ve got two groups of people. You’ve got analytical drivers, often in the finance. So they’re interested in the numbers. They’re interested in the nuts and bolts of something. “I want to see evidence. I want to see it based.” You’ve got HR people who may be more amiable and expressives. They’re interested in the emotional side of things.
So statements that you often hear in an organisation, “Engagement is poor. Motivation is high. Absence is high.” These are the sorts of statements you might hear from a HR team. But someone in finance is gonna sit there and say, “So what? What’s the numbers? How is that affecting our business?” So bringing the two things together, start answering a question, another subject I was asked to speak on, and this was part of a round table, was answering a question of, “Does HR deserve the biggest seat in the board room?” And again, if we dig under why do we see more finance directors, maybe less HR directors, that have board presence, some of the answers come from CEOs, have often come from a background of finance and the CFOs become CEOs, and they want to see the evidence-based trends with numbers. So bringing data together in one place does mean that we can start to address both of those.
So some efficiencies. Consolidated data, benefits of the numbers and detail. Well, I’ve just covered that. The ability to run reports that has some HR-type data, geography, organisational structure against numbers, bonuses received here, overtime received here versus absence data over here. Well, you might not be able to run those, if your bonuses are stored in a payroll system and your absence data is stored in a HR system. So just being able to run reports from a single source starts to mean that you can combine the two bits of data.
Single point of entry. Lots of my clients say, “We want to reduce duplication of entry.” If people had a problem with duplication of entry, they are doing so well because I don’t see duplication. I see a name and an address being entered into an offer letter, a contract, a HR system, a payroll system, a pension spreadsheet, a spreadsheet that goes to our childcare provider, a spreadsheet that goes to our benefit provider. If we just had duplication, we’re all doing pretty well. What we’re seeing is the same piece of information being entered into sometimes double-figure systems, that could be spreadsheets, and that means it’s stored in a double-figure number of places. So if you’ve got a piece of information that’s stored in 12 places, I mentioned GDPR. I said I won’t mention it too much, but let’s just look at it. Employee makes a request for information. “What information do you hold about me?” You’re gonna have to go to so many places, whether it be physical filing cabinets, whether it be spreadsheets, whether it be email trails, all these different places. So again, the automation in a single point of entry, well, that’s gonna save you loads of time entering something once instead of 10 times, but it’s also gonna save you lots of headaches around how you keep that data, secure, and all those sorts of things.
Accuracy and less opportunity for data error. Well, obviously, if you’re entering a piece of information once, you’ve got less chances of getting it wrong than entering it 12 times. And this is without even thinking about self-service and those sorts of things. I’m just talking about the integration between HR and payroll here. But self-service, giving the employee the empowerment to enter the data themselves, if we’re entering an address 12 times, why should anyone from the organisation be entering it at all? It’s like these products are going to help you on-board your employees, get them importing their data themselves, updating their own address details, doing all these sorts of things, getting the employees doing this information where they’re the most suitable place to enter that data. And then that leads us onto the less manual process and then the reduction of inquiries. If I’m responsible for my own data, I’m gonna have less queries. So that comes through.
So I started talking there about empowering the employees, so making sure that… Sorry. Yes, so empowering employees. Making sure the employees are owning their own records and understanding their employment records. And again, self-service, a concept that we’re all aware of and I suppose all buy into, that’s taken us into the digital age. An employee being able to see their information using different platforms, not just from a computer that has to be accessed from their office machine, but they can access it at home, their tablets, their devices, their mobile phones and all the things that they use, but if you’re not integrating HR and payroll information, well, you’re gonna have two self-service platforms. I’m gonna input my holiday and my address details and I might view my handbook and I might do that over here. And then I’m gonna view my pay slip over here.
So again, it’s just looking at…and that’s not bad. It’s not certainly a disaster if, as long as the pieces of information are joined up how they get there, but again, we’re thinking about joining up the dots, the connecting the dots was in the title of just looking to say, “Well, how efficient can we make this? How efficient can we make the data sources, the data stores, and also how our employees look at their own information?” Because I often talk about, and this is not so much HR versus payroll, but it does link because absence is probably the biggest interface of employees to a HR system, booking holidays, managing their sickness, and all of those sorts of things. And I’ve got a slide that talks about managers in a minute. But absence, if done correct and set up correctly, will also be a higher proportion of the instructions that come from HR to payroll.
So have we got the right rules set out for when somebody’s moving from their full pay into half-pay into SSP? Have we got the right ways of tracking parental pay? Have we got the right ways of mixes of parental being, whether it be maternity, paternity, shared parental, adoption pay, or whether it just be a parental leave? So all those sorts of things of setting up the record correctly, if you’re getting employees and managers to take ownership and accountability of keeping it right, it’s also then going to mean less instructions going through to payroll, but it’s going to mean less enquiries from the employees.
Often, the managers spend more time dealing with answering their employees, “How many days’ holiday have I got left?” Or the one that always gets me is, “How many days sick have I got left?”, as if it’s an entitlement as opposed to a kind of a, something that an organisation puts in place to support their employees. But again, in different sectors that might be a question that’s more common of kind of some people would see that the sick is the way to top up. There’s a cynic in me there. But as we said, the place where they’re gonna pick up their information that covers their whole journey, their whole life-cycle.
And if you’re looking at these things, there is, I would say we’re still in a window, that if you’re embracing this sort of technology, you may be seen as being a progressive employer rather than old school. But we’re probably towards the end of that window. We’re probably towards the end of the window where actually we’ll be looking at not as you’re a progressive employer if you do, but you’re the opposite if you don’t. And that’s where a nexus is. So I think that’s where you need to be talking to our partners such as CIPHR to get the right people experience. Guess what? This isn’t a people system. We’ve gone past that. This is an experience. We used to be, a decade ago maybe, we were into selling systems to clients or services. Here’s how you can manage your HR, here’s how you can manage your payroll, systems that were dealt with within an organisation. But now this is your window to your employees.
And if they’ve left an employment where they are seeing a joined up of getting data across, they enter it once and it’s correct on their pay slip, it’s very frustrating for an employee, if they look at their HR system, and their address is correct, they’ve done everything that they need to, but it’s still showing wrong on their pay slip or the once a year on their P60, especially if people are using these things for…it might only be a small population of the workforce, but if they’re using these things to renew work permits or they need to, their right-to-remain relies on is the right address on their PC 60 information, it’s just damaging and for motivation and engagement. And again, we talked for a long time about those sort of things.
Empowering the managers. Again, managers have got a role to do. They need to manage their employees. It’s a lot easier to manage a team of staff, if they’re motivated, if they’re engaged, and they’re getting the right experience. But again, do they need to be spending all the time answering questions around, “Why has my P60 got the wrong address? What’s my holiday entitlement? How many absence, sickness days, have I got left?”, all these sorts of things. So just having the complete and accurate information at their fingertips. I mean, that also has a GDPR implication because what should a manager see? Depending on the levels of management, what should my manager see about me? That’s a, it’s a different conversation, but I think the key is what they need to see making it available to them so that they can see it all in one place is really useful.
Budgetary control. How much overtime am I paying? What’s my bonuses? How many people have I got? What’s my headcount? What’s my attrition? And then maybe being able to look at that sort of information versus the rest of their workforce. And again, all the slides that you see on the demonstration or the software demos that are on the screens behind us is all that sort of information, whether it be analysing your gender pay gap or whether it be analysing your absence trends, it’s all in the software.
Us running a payroll becomes a lot easier, if you’re using this thing and you’re collating that information, because without having my payroll team to hand here to kind of get in trouble with, but you could simplify a payroll process down. It’s a very important process, but you can simplify it down into its job is turn gross pay into net pay by taking statutory deductions and managing the statutory deductions. All of the hard work is done in collecting your gross pay, making sure your salaries are right, your rates are right, all of your allowances are right. You’ve collected your time and your variable data, that sort of process that’s used by integrating systems.
And this comes back to that same point, again, before HR and the seat on the board room, scientific evidence-based. Well, that piece there is…I’ve talked about the social communications styles. That’s analyticals. People who are analyticals need to see anything that they do, any decision that they make needs to be based on scientific evidence-based data. So when a HR manager comes up to a CEO or a CFO and says, “We’ve got engagement issues. We’ve got motivation issues,” it will catch up because it will hit the bottom line. A demotivated and unengaged workforce isn’t going to deliver you a very productive environment. So it will hit the bottom line, but it will take a while to be able to join those dots, connect those dots, of why.
So if you can start to see data where you are looking at your attrition, you’re looking at your turnover of staff, why people are leaving, are people absent, are they engaged, what do their appraisal scores look like, it’s all in your HR system, you look at that, not even in the payroll system, but you look at that in your accounts, and you start, and if you plot a graph, you can probably see that a couple of months, depending on your industry, it might be immediate or it might take a couple of months, but as soon as you start to see a drop-off in engagement and motivation in your workforce, you’ll start to see a drop-off in the performance of the whole organisation. And again, we talked about at the beginning, finance and HR talking together would help build momentum.
Positive momentum’s a lot harder to build than negative momentum. You can kind of spend a lot of time building engagement and motivation. If something goes wrong, it will drop a lot quicker than you’ve managed to build it up. It’s the same as they say, “If you’re in sales, if it takes six months to get a new customer, it takes about six minutes to lose one.” It’s that sort of thing. It’s the same with your workforce. If you’ve got them there, they’ll stay there.
And then I suppose the, because the introduction to the talk, they did say putting in numeric terms. And again, so I’m gonna contradict myself and talk about not putting this in numeric terms. What is the cost of integrating systems? I’m not gonna say, “It costs you this. And it costs you that,” but the money you will save or the productivity you’ll get back from your HR and from the HR team, instead of spending 70% of their time dealing with routine transactional work, filling in an address 12 times as in my example. So using a corny phrase, integrating will let you put the human back into human resources. Human resources, people are going into the team, as I said, our amiable expressives want to work with their staff. This gives them the opportunity. Stop spending your time wasting it sending instructions to payroll and filling in endless spreadsheets. Integrate your data and get your data back to work with your staff, add value, and help them, and help keep them motivated.
And then, obviously, there’s gonna be a bit of saving in poor data that’s submitted via RTI submissions and things. Legislative changes are always gonna come on top of us. Again, so whether it be GDPR or whatever the next thing is, just having your data. And Brexit will be the next one. I mean, I’ll say whatever the next one is gonna be. We still don’t know what’s gonna come of it, but something is gonna come of it.
So what I would say is having all of your data in one place, knowing where it is and where you can get your hands on it, because off of the back of any legislation that someone tells us that we’ve got to do and we’ve got to check our workforce by nationality because we do this agreement with this area and this agreement with this area or whatever, there’s gonna be employment law changes. It always happens, whenever there’s a government change or whatever we come across. So having your data in one place, it’s gonna future-proof you and de-risk you.
And then the pitfalls. So you’ve kind of…I’ve convinced you. You need to have your systems talking to each other. And if they’re not already talking to each other or you don’t have systems, to put you in the right place, you’re in the right stand, because the first place is HR. Look at the software over there and work out how you’re gonna get your HR working for you. And then, it’s quite easy because as I said, payroll is just calculating gross pay to net pay. These guys will give us the gross pay, we’ll calculate your payroll. Everyone will be happy. So there’s the sales bit. But the risk then is all around implementation. You will see all the things that this new software and all the world that you can get to, but if you are currently running your people on a few spreadsheets and some forms that are in the back of a filing cabinet and you want to from day one in your implementation because, you might speak to someone and you might say, “Well, how quick can I have a system?”
And then you might hear things like, “Well, 8 to 12 weeks,” or, “Three to six months,” might an implementation. But let’s be realistic. What are we gonna achieve there? Let’s make a big step change. We’re gonna get integrated, good quality data, and that’s gonna be our step one. All the bells and whistles may need to get added on later because the reliance of the successful implementation is largely gonna be, can vouch for guys at CIPHR and I can vouch for us for implementing a payroll. We’ll have our end sorted, we’ll be able to do our end, but we will only be able to work with the data that’s provided. So an implementation will be how much resource have you got available. If all the information’s in a neat spreadsheet, it will be nice and easy. But if you’re committing to an implementation of six weeks, eight weeks, which relies, which needs you to go and get data from all places around the country filing cabinets, well, that’s one of the major pitfalls.
And the other major pitfall I would say, major, but a pitfall, is how well the communication is between the payroll and the HR team. I think it’s a lot better than it ever used to be. I used to see, I used to go and do implementations where a different payroll team would be on this floor, this end of the building, HR would be at this floor, other end of the building, and they just wouldn’t answer the phone to each other or wouldn’t talk. It was kind of a pretty difficult task. I think that’s better now. I think all things are coming together. But still, the point is ownership of every field because you need a master field. What’s the driver?
Who’s responsible for entering each piece of data because if it only goes in once, you don’t want one thing to say along the line on the rubbish that’s been put in by another team. You need to make sure that you’ve got the quality flowing throughout. And I suppose it’s the same thing, being aware of your resource requirements and sometimes having to embrace the reduction of discretion, because if you have a system…I talked about absence where you’re gonna have to set up the absence rules. What are the rules? When does someone go from full pay to half-pay to no pay? And then when someone says, “Oh, well we kinda just make a decision.” Well then software’s not gonna be able to replace a decision. So you have to embrace that it is better to have a consistency and it’s better to have it all flowing through.
So that’s me. Steve Sweetlove’s contact details are there. And as I say, if there’s anything, the experience is there,but we’ve both done lots of these together. And then obviously we’re, you know, the only payroll supplier for CIPHR. But the rules will apply to whoever the payroll supplier is, but I think the key is if it, yeah, if anyone does have any questions or blasts that you’d like, then please do share.