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Nick Berra | Senior Business Development Manager, CloudPay
Before the onset of COVID-19, payroll was generally regarded as a relatively standalone function within a business, and for many outside of payroll itself, not one that was strategic in any significant way. But then things changed very suddenly: in many countries, laws were changed literally overnight, affecting where, when and how people worked, and how they were paid.
Payroll teams across the globe adapted very quickly, and in many cases remarkably well. Constantly changing processes and differing support measures put in place by governments meant they were aiming at a moving target, but managed to ensure that employees were still paid in a timely, accurate manner.
And this ably demonstrated how integral payroll can be within an organization as a whole. Payroll workers are now recognized as key players in a business, taking on responsibilities and solving challenges that benefit everyone - but it’s data that has helped those teams prove their worth. In this blog, we’ll explore how some vital KPIs are helping payroll teams define and underscore their success, and the extent to which they have thrived during two very challenging years.
How tracking KPIs have helped payroll teams
The payroll teams that best weathered the storm of the pandemic were those who were able to monitor performance and quickly spot issues within their payroll processing. The results of certain KPIs were critical in pointing the right way forward for payroll teams, and for businesses as a whole, in fast-changing circumstances.
Five KPIs, in particular, stood out as useful pointers to performance during the pandemic:
- Calendar length: how long it takes end-to-end to complete a payroll cycle. With more people working from home during the pandemic, any effect this had on payroll processing would have increased this figure.
- First-time approvals: how many payroll runs (as a percentage of the total) are approved at the first attempt. Issues around data access for remote payroll teams could have led to errors creeping into payroll runs, reducing the FTA rate as a result.
- Issues per 1000 payslips: the proportion of payslips in each payroll cycle affected by errors. This could have indicated areas where payroll hasn’t correctly adjusted to sudden changes forced upon the business.
- Supplemental impact: the proportion of payroll runs that take place outside of the normal payroll cycle. With many organizations having to lay off staff or furlough employees, there would have been far more off-cycle payments (such as severance pay) to make.
- Data input issues: of all the issues that affect payroll, the proportion of them caused by data input mistakes. This may have been exacerbated in some cases during the pandemic by people working from home in compromised ways (e.g. from a laptop rather than a bank of screens from which it’s easier to process and check data).
Resilient payroll in challenging times
As those five KPIs demonstrate, there were lots of challenges for payroll teams to contend with. The good news, however, is that payroll teams at a global level have performed very well in the circumstances, and this success has been quantified in our recently-released Payroll Efficiency Index report.
Our findings show that first-time approvals are up by 1.89%, data input issues are down by 4.2%, and issues per 1000 payslips have dropped by a substantial amount (24%). And while calendar length and supplemental impact have both increased, by 0.1 days and 4.2% respectively, neither of these results are necessarily negative. The small rise in calendar length can be considered a good return in the context of such a challenging time, while the turbulence of employment status is a fair mitigating factor in the increase of supplemental impact.
All of this goes to show what an asset payroll can be to an organization. Payroll teams have responded and adapted so well to all that’s been thrown at them over the past two years, that they have been a dependable rock in many organizations - and the KPI performance proves it. And that’s why so many businesses are now increasingly bringing payroll into their everyday decision-making, and taking full advantage of the data and insights that only payroll can provide.
Read our Payroll Efficiency Index report to get more detail on the importance of payroll to modern business. Explore some of the effects of the pandemic in more depth, drill down into regional results and variations, and understand how your business compares to overall benchmarks.
Nick Berra | Senior Business Development Manager, CloudPay
