Checklist: 10 Must-Dos to Ensure Your Payroll’s Resilience under COVID-19
As we discussed in our previous article “Managing Payroll in Times of the Coronavirus”, Payroll teams everywhere are being impacted by the global coronavirus pandemic. The impact includes having to work remotely, team members being out on sick leave, payroll providers not being able to offer their normal support and services, as well as a big spike in workload due to new emergency laws and regulations having to be applied to payrolls.
We are currently all learning to cope with the “new normal” brought on by the COVID-19 crisis, both from a personal and professional perspective. In this context, what are some of the key things your Payroll team needs to focus on in order to ensure you can properly pay your employees during these difficult times and beyond?
Here is a checklist of 10 key things that you must put in place to guarantee the continued smooth operations and resilience of your payroll operations:
1) Staff Backup Plan:
Various members of your extended team might be out on sick leave. Or even if they are staying healthy, they might not be able to devote the same amount of time and attention to payroll because they need to care for kids or other family members in need. The ability to attend to payroll responsibilities might change very quickly. This includes not only the people processing the payroll but also contributors and approvers; without them the process can get stuck.
- You need a clearly defined backup plan. For each team member you need to define who will take over their responsibilities in case of absence. And ideally you define a backup for the backup (i.e. in case both the primary owner and their backup are not available).
- The backup plan should also include approvers to ensure that the process does not get stuck due to a lack of approval. You should agree that in a worst case scenario (multiple layers of approvers/delegates out of action) you can move forward on an emergency basis without the full normal sign-offs.
- To make sure that all team members – whether primary process owners or their backups – work effectively together and you can leverage backups across your team, you should also document your payroll processes, ideally in form of digital workflows that guide each team member and keep everyone on track.
- Mid to longer term, you should push to standardize your processes as much as possible – again ideally via common digital workflows – so it is easier to have team members back up each other across different parts of the organization in emergency situations.
2) Access to Payroll Calculation Tools:
Do you or your local payroll service partners have access to the payroll calculation tools that are being used to calculate the gross-to-net values in each of your local payrolls? If some of the payroll calculation tools that you or your payroll provider are using are on-premise software, they are likely installed on local hardware (i.e. servers in the office) and probably not accessible remotely.
- Immediate term: You may have to run the calculations manually. This of course will only be feasible if you have skilled staff who know how to run a calculation manually and if the numbers of employees for which you need to calculate payroll is small enough. Otherwise, you may have to run an emergency payroll (i.e. assuming same values as in previous payroll) and make retroactive adjustments later on.
- Medium term: Switch from on-premise to cloud-based payroll calculation tools which are accessible anywhere, any time.
3) Access to Payroll Input Data:
Is your input data (i.e. data coming from Core HR, Time & Attendance, Benefits, Commission systems) in digital format that can easy be shared remotely? If you cannot get reliable access to data inputs that are required to feed into the payroll process (e.g. hours worked by your hourly workers), you clearly won’t be able to process payroll properly.
- Immediate term: Depending on the data, you may be able to collect the inputs in a more manual manner (e.g. have employees send you their hours worked directly via email).
- Medium term: Ensure you put digital, cloud-based data capture systems (e.g. Time Tracking, etc.) in place that allow you to have access to input data remotely and share that data digitally with your payroll processing teams.
4) Communication amongst Key Stakeholders:
Can you effectively communicate amongst key stakeholders who are required to run the payroll (i.e. data contributors, processors, reviewers/approvers, etc.)?
We all have quickly gotten used to video conferences to replace in-person meetings. However, for many things you cannot plan a video call, you require a more ad-hoc way to communicate. Talking with a multinational technology company last week, they told us that they are no longer able to call the normal customer support desk numbers of their local payroll providers as no one is able to pick up the phones in the office. Instead, their vendor asked them use email to communicate, which unfortunately is slow and not very secure. And of course during a time of crisis, quick and decisive communication is particularly critical.
- Ask your provider to quickly set up a VOIP phone line which can be forwarded or answered by a pool of team members from the provider. This can be done quickly and cheaply and ensures that calls will get answered by someone in the team who is available.
- Set up a WhatsApp or similar messaging chat group where you can ask questions quickly and get answers in real time. However, remember that these kind of chat platforms may not meet security protocols to exchange sensitive information.
- Better: Put in place a dedicated, secure virtual collaboration space for each of your payroll teams where team members – both internal and external – can ask questions, exchange information, upload and store documents etc. in real-time and secure environment.
5) Coordinating Work and Tracking Progress:
Being well coordinated amongst various team members, understanding who is working on what and what is the current status of completing all the necessary tasks is more important than ever in times of crises. Coordination and tracking progress is easier when you are sitting in the same office and you can walk over and check in with your colleagues. In a remote work environment, you need different mechanisms to stay on top of things.
- Set up daily check-in calls to make sure you know what everyone is working on and where team members might be running into issues that require attention and help.
- Better: Complement your check-in calls with an online task management tool that automatically keeps track of what each team member – internal and external – is working on and shares the status with all key stakeholders in real time.
6) Distributing Payslips:
If you are used to distributing payslips in printed hardcopies in the office, this obviously will no longer be an option communicate payroll information with your employees. And even if you mailed them to employees’ home address, your or your payroll provider might not be able to physically print and stuff envelopes due to work-from-home constraints.
- At a minimum: Make sure you have digital copies of the payslips and that they can be distributed via email to your employees
- Better: Put in place a cloud-based Employee Portal where employees can access their payslip and tax documents anytime, anywhere, via their computer or phone.
7) Managing Payments:
Of course it is very crucial that payments will actually reach employees. In some countries the habitual ways of paying employees (e.g. by handing them a paycheck) will be impacted. In other countries, the banking system might be impacted as well.
- Double-check what the local situation is in counties where you need to pay employees and do not assume that the normal mechanisms will work.
- Devise backup plans to get the money to employees (e.g. money couriers, digital transfers).
8) Access to Payroll Reports and Documents:
Your company’s Finance and Senior Management teams will still require reports to make educated decisions about the business and will want to ensure that payroll transactions are properly captured in the Finance systems. This is particularly important in times of crisis when the leadership needs to make difficult decisions about cost allocations and resources.
- Make sure all your current and historic payroll data and reports are accessible remotely by storing them in a secure, central cloud-based location.
- Automate the data flows between your Payroll and your Finance systems through modern data integration solutions so that no or minimal human/manual intervention is required to update crucial information in your Finance systems.
9) Outsourcing Alternatives:
In case you have been processing payroll in-house and you do not have sufficient internal resources to ensure proper backup for team members or your processes cannot be quickly adapted to support remote payroll operations, your best option may be to find external help from experts. These experts can also help to ensure that new emergency subsidies and tax rules are properly applied to your payroll.
- Identify potential payroll providers who can take over your in-house payroll operations
- Define your specific needs and the scope of services you require
- Request proposals and select the most suitable vendor:
- Ensure that the vendor can take over payroll operations quickly to guarantee continuity
- Make sure that the vendor can preserve your historic payroll data
10) Provider Backup Plan:
Finally, it is not enough to ensure that your internal processes and tools are able to operate efficiently under the “new normal”. You may also experience disruptions with your external payroll partners as they are grappling with the new situation. Your providers’ staffing situation and systems may be ill-prepared to support you properly during this time of crisis. Or their business survival might be jeopardized by having many of their clients reducing headcounts or going out of business. So you might need to switch vendors quickly to ensure the continuity of your own payroll operations.
- Review your termination rights/exit clauses in your current vendor contracts
- Ensure you have obtained copies of your historic payroll data and reports from your existing vendor
- Identify potential payroll providers who can take over your payroll operations quickly
- Define your specific needs and the scope of services you require
- Request proposals and select the most suitable vendor
These are challenging times for all of us. Many short term and longer term adjustments are required to make sure that payroll can operate effectively during this time of crisis. It can be overwhelming at times, but a comprehensive checklist will help you to manage through the challenges in a productive manner and master the situation as best as possible.
A powerful cloud-based payroll management platform like Payzaar can help you and your team to quickly digitize your payroll processes and establish a secure, efficient collaboration environment for your remote payroll operations. In case you have questions or need help to implement any of the recommended actions feel free to contact our Payzaar team (firstname.lastname@example.org) and we would be happy to help.
To support payroll professionals everywhere during this time of crisis, we are offering our platform for FREE (no strings attached) to any company who wishes to make use of it for as long as the crisis lasts.