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Lee Thomasson | Business Development Manager, CloudPay
Benchmarking your payroll performance so that you can understand where your payroll may be experiencing problems can be immensely useful - but that’s only half of the story.
Collecting and analyzing all of this information is pointless unless there is a concerted effort within the organization to act on the insights that are generated. And the importance of fostering a positive, data-driven attitude towards decision-making can’t be overstated: payroll plays such an important part within any business that improving it benefits not just payroll, but the company as a whole.
Developing this culture requires employees to trust what the data is telling them, to actively search for the root cause of an issue, and to adopt an approach of continuous improvement. This blog sets out how you can get your organization there.
What does it mean to be data-driven?
If you’re collecting and storing data, and then using that data whenever a specific need comes up, then you’re making use of that data - but you aren’t data-driven.
The difference in being data-driven is that the data is firmly embedded within the day-to-day life of the organization. This means that employees have instant, hassle-free access to data at any time, with the requisite applications and systems in place to enable that access.
From a payroll perspective, this means accessing and analyzing detailed payroll data in real-time, uncovering the cause and effects of problems that are holding payroll back, and taking action to make improvements. Using detailed payroll KPIs and linking them with analytical systems can make it easier than ever to achieve this.
How you can build a data-driven culture
In many organizations, it can be hard to break down an existing attitude of ‘if it ain’t broke, don’t fix it’. Naturally, many may be resistant to what is a significant change in how they operate, but there is much you can do to press home the advantage that a data-driven culture can bring:
- Rely on data: ensure that decision-making is based on data as much as possible, and move away from subjective experiences or ‘gut feel’ as a way of making choices
- Develop data analysis skills: ensure employees have the right training and help to think critically, interpret data correctly, and know where and when is best to apply the right data to decision-making
- Lead by example: the responsibility is on the C-suite to set the expectation for others to make decisions based on data. They should do so themselves to lead the way, and positively recognize successful data-driven decisions made by individuals and teams within the workforce.
- Incentivize to achieve buy-in: using campaigns to demonstrate the benefits of a data-driven culture to payroll and HR teams, and rewarding success and innovation resulting from it, can help get more employees on board with the change
How data can support continuous improvement
Making this work for payroll and Human Resources needs the teams involved to proactively embrace the new culture. That means working hard to find potential problems, rather than sitting back and reacting only when those problems make themselves obvious.
This should be supported by a greater and more detailed level of payroll metrics, far beyond those normally seen in a normal Service Level Agreement with a payroll provider or vendor. Often, issues can occur while these SLA metrics are still being fulfilled, meaning that issues can bubble under the surface without detection for long periods of time.
As an example of how these detailed key performance indicators can be applied, ask yourself if, at present, you can easily find the answers to the following questions:
- What is your current first-time approval rate?
- How many errors in your payroll can be attributed to data input?
- Out of every 1000 payslips, how many have issues requiring remedial action?
- What is the timespan between the cut-off for amendment and payday itself?
- How much of your payroll runs outside of your normal run schedule?
If you can’t answer these questions, then it’s vital you explore a new level of key performance indicators, so that your payroll and HR teams can make the most informed decisions possible. Only with these do you stand the best possible chance of embracing all the possibilities that a data-driven culture can open for you.
See how these detailed KPIs are applied at a global and regional level in the latest CloudPay Global Payroll Efficiency Index. Download your copy of the report here.
