The Integration Of Human Resources And Payroll

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People in various organisational functions and departments have had to work better together over the past few years. This has put renewed focus on how effectively human resources and payroll integrate. Ian McAlister, General Manager at CRS Technologies, examines how human resources should work closely with payroll if companies are to remain effective.


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People in various organisational functions and departments have had to work better together over the past few years. This has put renewed focus on how effectively human resources and payroll integrate. Ian McAlister, General Manager at CRS Technologies, examines how human resources should work closely with payroll if companies are to remain effective.

“To many, payroll might seem like a very thankless and administrative role with numerous manual calculations and tight deadlines. However, the ever-increasing legal and regulatory burden placed on employers means that the complexity associated with this process has grown significantly. Additionally, payroll is also becoming more involved with technology and strategic concerns. Employee compensation is the single largest expense for many businesses, and employees tend to become very upset if they are not paid accurately or on time,” says McAlister.

For its part, human resources must work very closely with payroll in several areas. This can include, among others, taxable benefits, setting up employees, conducting payment and bonus reviews, and managing employee terminations. The payroll function frequently reports into the human resources department, resulting in human resources having strategic oversight of the payroll function. In smaller companies, the human resources and payroll person may very well be one and the same.

Linking everything

Much of the data used by payroll and human resources is often the same. It therefore makes no sense for companies to run these functions separately, requiring a duplication of information. The risk of this is that if the data is out of sync, the cost and business impact can be significant.

“Managing two support infrastructures is not only costly, but it doubles up on other expenses and administrative functions that can quickly snowball out of control. Having two departments operate in separate silos within a business also negatively impacts on the employee experience,” McAlister continues.

Management must work with the two department heads to identify how best they can collaborate more closely and the benefits this can provide team members. Offering practical, relatable examples of how reducing the divisions between payroll and human resources will help team members do their jobs and reach higher standards, which will make it much easier to get people on board.

Understanding responsibilities

Even though there are several clear distinctions between the human resource and payroll departments, there are also areas where their functions overlap, such as the approval and enactment of salary increases.

“It is therefore important to be clear about which responsibilities are allocated to which team. This helps to avoid the confusion and wasted resources that can result from people dedicating their time to overlapping jobs. Poor delegation of responsibilities can also have an even more problematic result: critical tasks not getting done because it is unclear who is supposed to do them,” adds McAlister.

This means that managers must develop well-defined workflows, methods, and structures that ensure all members of both teams fully understand what is expected of them and how their work complements that of the other department.

Communication critical

Like many corporate processes and elements of business, collaboration between human resources and payroll depends on healthy communication. As part of this, companies should consider scheduling regular meetings that allow team members to check in with one another, ask questions, and give updates on their current work and priorities.

“Keeping lines of communication open in this way helps ensure that key objectives concerning both human resources and payroll are not being overlooked. It also strengthens relationships and helps people get to know each other, which is conducive to positive workplace relationships and staff satisfaction. Regardless of how businesses approach the integration between human resources and payroll, they must do so sooner rather than later to remain competitive in 2022,” concludes McAlister.

Click here to download the free whitepaper:  https://www.crs.co.za/why-hr-and-payroll-are-better-together/

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