With a harsh light being shone on underpayment errors in the press, now is the time to review your current payroll system. It can be the difference between your good name as a great employer or infamy as a bad one.
Switching payroll providers can be daunting, whether you’re a small company with a fairly simple payroll system, a large company with a full-scale integrated human capital management (HCM) solution, or somewhere in between. It’s important to not let the implementation step become a barrier for positive change.
Follow five key steps and you’ll assemble the right team, gather the right data, and put the right technology in place for successful, and confident, implementation.
1. Identify and document your payroll processes from beginning to end
Clearly defining the full scope of your payroll process will help you and your payroll provider ensure that every step is covered.
Key items to identify:
- Different employee classifications, including Modern Awards, EBAs and company specific employee classification levels
- Different pay frequencies
- How to reimburse for expenses, if relevant
- Any overtime, penalties, loadings, allowances and superannuation guarantee requirements
- An approach to accurately record hours worked, including breaks to calculate minimum entitlements
- Data entry and systems integration requirements
TIP: Schedule to do this step as part of your annual payroll health check.
Australia’s complex Industrial Relations landscape makes it essential for businesses to regularly review and update employees’ classification levels.
2. Gather and validate your data
- Find out where all your legacy payroll and HR data is stored
- Review your current data and verify its accuracy
- Have employees update their personal information
- Map legacy data transfer requirements to the new system – electronic and paper records from in-house systems and vendors
3. Inform Third Parties
- Benefit providers – start planning the necessary integration steps with your benefits providers, such as health insurance and salary sacrifice providers
- Government agencies and unions – make sure the new provider offers integration of applicable guidelines and business rules
- Banks – you will need to update banks that you draw your payroll from
TIP: Take a moment to review the third-party deductions so you have a clear picture of the recipients for each employee.
4. Get Stakeholder Buy-In
Converting to a new payroll system requires up-front work, as well as ongoing support. System changes are easier to implement when you have the support of your employees and leadership. You’ll need to identity:
- Who in your business will be involved in preparing for the change, and make sure they have the time to do the job properly
- Your business administer for the new payroll process so you can bring them in on the planning and implementation to obtain their buy-in and train them on their new responsibilities
- Project leads in your organisation and at your provider. Establish good communication between the teams and set expectations and timelines
- When to schedule training for your administrators and employees on the new system
5. Prepare your infrastructure requirements
- Be clear whether you have the infrastructure needed to implement the new payroll system, as well as new software or hardware requirements. Ask vendors for requirements and have your IT team check them
- If you choose a payroll solution that offers enhanced features, like integration with time-tracking for example, you will need to plan for system integration in your implementation timeline
At ADP, as Australia’s biggest payroll provider, we have the experience and technology to help ensure your business complies with the rules and steers clear of regulatory penalties. No matter what changes may happen in future. Follow these five key steps and you can put your best foot forward when implementing the payroll system that will get you good press from your employees and your industry.
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