Raising the profile of payroll
Payroll is an essential part of every business, yet its value is often overshadowed by its complexities. Traditional payroll software is so time-consuming that accountants can’t typically scale payroll as a service, and payroll is often perceived as a “loss-leader”. This undervalued perception of payroll needs to change, according to Nick Day, Managing Director of JGA Recruitment.
JGA Recruitment is a premier payroll and HR recruitment business, providing recruitment for payroll professionals, from clerks and apprentices, all the way through to payroll directors, implementation consultants, project managers, and payroll technology salespeople. Working with accountants and payroll experts daily, Nick has a wide knowledge of the industry, and considers himself a payroll professional in his own right. In our conversation, he brings some interesting insights into the world of payroll, and how we can raise awareness of its value in order to make payroll profitable.
What are the biggest challenges you face when recruiting for payroll professionals?
When placing an ad for a payroll professional, most people underestimate the difficulty of payroll and therefore think they can do it. So you'll end up with potentially thousands of resumes coming in from people that think they are appropriate for the job, but actually, the reality is they're not payroll professionals. There's a big difference between managing a payroll for 12 employees for a bar, and managing payroll for 2,000 employees start to finish, further calculations, and everything else that goes with it.
You’re right in saying payroll is complex. What are the common pain points experienced in the industry?
Being underappreciated, and overworked. There’s an issue with articulating the difficulties that other business stakeholders don’t see. For example, with the amount of legislation, and the speed at which legislation has changed during the pandemic, payroll professionals have had to react to get huge volumes of furlough payment calculations done correctly. Business stakeholders change their minds very, very quickly on who's going to be furloughed, and who isn't. I don't necessarily think there's an appreciation on how much complexity is involved behind the scenes.
We’ve noticed a trend that accountants tend to be more invested in cloud accounting packages, but cloud payroll is far less used and talked about. Why do you think that is?
I’ve seen payroll change from the days of Kalamazoo and time cards, shifting to where we are now. We're in the most rapid period of technological change that the world has ever seen. I see that as a real positive. The industry is probably a little bit mixed on it. Accountants are probably slightly further ahead in wanting to speed up their own technology before the payroll departments’.
A big part of this is the media. A 2015 BBC study that said that 97% of all payroll professionals will be automated within the next 20 years. I think that scares people; they want to improve, but there's a risk if they improve things too much, then they will outsource themselves. So I think there's a resistance there.
I also think there's a fear factor with technology they haven't dealt with before. Payroll is an incredibly vital function, and to get it wrong is a huge risk. To be the first to implement modern payroll technology can be scary. Most payroll employees now are ready to change. Over 70% of payroll managers are looking to integrate more automated solutions. We wouldn’t have seen that a year ago.
How can we make payroll a priority in the accounting space?
We need people to highlight the direct impact of technology on payroll processes and how it can transform a business. I also think that the profile of payroll needs to improve. Particularly in accountancy, payroll is still a bit of an after-service. It’s not a priority for many accountancy firms.
Payroll professionals aren’t often in a position to be the ‘voice’. If you work for an accounting firm, the voice is going to be the accountancy or the partners. It's not going to be typically the payroll department. But I think we're starting to see that change. And automation is really helping with that change. Because the less task orientated things payroll professionals are doing, and the more time they can spend on strategy, the bigger the impact they can have at a higher level.
For more insights into how technology can enhance the role of payroll in the industry, see part 2 of Nick’s interview.
Follow Nick Day on Twitter or LinkedIn. You can also listen to Nick Day's Payroll Podcast here.