Is payroll expense a liability for your organization? More often than not the answer is yes, but no one is going to work for free. So how can you change the game and make payroll strategic? By challenging your payroll staff to see their roles as essential to the success of the organization, the payroll department can emerge as a key player in the development of the core business at the most fundamental level - your employees.

The first step is to evaluate the current communication system the payroll department has with your employees. Ask yourself, what has been done lately to increase employee satisfaction?

Today, employers are finding that paperless options are a simple solution tied to employee satisfaction. Tools such as employee self service give employees the ability to view their personnel items such as direct deposit payments or W2s online at their convenience. Web-based data access not only heightens employee satisfaction, but also cuts back on the amount of time the payroll department spends updating profiles and answering questions. As a result, you can reduce your internal cost per payment, as you no longer have to sort through and distribute paper vouchers. Your payroll staff can also be optimized to focus on more strategic items.

Employees will not be the only ones reaping the benefits from self service capabilities. A common complaint from managers is the amount of time spent filling out forms for employee changes. Manager self service allows for online pay rate changes and performance reviews. An automated workflow process also routes items that need approval via self service.

After you have evaluated inefficiencies in the payroll process, the next step is to examine your organization's time collection process. Are you still utilizing paper time sheets? What percent of erroneous payments result from manual time collection?

By automating time collection, you can help streamline time sheet approval and decrease the number of errors. As a strategic business benefit, automation also makes all the data available online for reporting. This allows you to provide managers with tools for analyzing items such as overtime hours and areas for productivity improvements.

Another way you can make payroll strategic is by providing management and executive staff with decision making tools for reporting. By offering analytics and trends such as the number of employees paid per payroll practitioner in the payroll department, the percent of employees on direct deposit, the number of tax payments that were late or had penalties last year, or the amount of off-cycle payrolls you run per year, you are empowering management with the knowledge needed to make investments or cut costs.

The onus however is not entirely on employees and management. Your payroll department should also take on the role of the educator. It is their responsibility to educate and train the workforce on the new tools and services available to them. Many payroll professionals are also taking the initiative to analyze HR data, such as turnover ratios and trends in employee turnover by division, position or manager. By tracking these metrics, your payroll staff can better determine goals and how their efforts are helping achieve business objectives.

These are all ideas that companies are embracing today. What is your vision? Perhaps it is deploying a new technology or product that will improve current practices, increase efficiencies or boost productivity. Encourage your payroll staff to be creative and think outside of the box. Take a look at how your organization processes payroll today. Is it decentralized? Why? Could greater efficiencies be gained by centralizing payroll processing?

Once you have defined a vision, create a plan. Most importantly, put the plan into action. Build a compelling quantitative business case. Sell your idea. Define the objectives and how you will achieve them. Better yet, tie a bonus or incentive for you and your staff for successfully completing a strategic plan.

With payroll comprising such a large percentage of many companies' administrative costs, making payroll a strategic component of your business is no longer just desired, it's a necessity. While the ease of receiving a paycheck is often taken for granted, payroll managers know that there are many factors which contribute to making the 1st and 15th of the month a success. Payroll is an important business component and holds hidden treasures that both managers and of which executives are unaware. Going to work everyday does not need to revolve around the stagnant guidelines of printing, signing and distributing checks. It is time to take payroll to the next level.


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