Payroll: the ticking time-bomb
The changes taking place in payroll today are nothing short of revolutionary and the impact upon payroll bureaux is huge. It’s my opinion that this is fuelling totally New Dynamics within the payroll arena generally and the bureau marketplace in particular. Please read my other 2 articles on LinkedIn which establish the background to the ‘New Reality’ for payroll bureaux and to understand the context of my arguments in this piece.
Now that we are in the midst of the final wave of deploying auto enrolment (AE) across the economy, let’s quickly review where we are. When AE arrived there was some (spurious) debate over how it would be delivered and by who. Let’s be absolutely clear – AE has been delivered by payroll professionals, no one else. Payroll bureaux in particular have shouldered the additional burden of work largely without acclaim and often without recognition. However, and this is the theme of my article, it has not been without pain and considerable strains are becoming apparent.
The two critical stress-points are TIME and SKILLS.
The TIME factor is easy to explain: firstly, AE has, along with ‘legislation creep’, added to the workload of payroll operators; second, small to medium companies are moving payroll work to their accountants rather than doing it themselves. So bureaux are doing more payroll for more payrolls!
This might be a great thing, if it wasn’t for the skills crisis which is hitting the service at precisely the same time. Most crucially, the profession has lost a significant quantity of experienced payrollers through retirement and career switching. I personally know of 3 highly skilled bureau managers who have left the profession while still having 20 years left of their working lives. Their reason for leaving – they didn’t join payroll to do all this AE stuff and to cope with all this pressure! Many other long-serving payroll people have simply decided it’s time to retire rather than having to re-skill and adopt new working practices – and who can blame them!
While the leavers are being replaced in number their experience is lost to the profession as the new joiners are, substantially, apprentices and trainees. So for the next few years the pressure is falling firmly upon the Bureau Payroll Manager (BPM) and their more experienced colleagues. And the pressure is considerable.
Take a look at a job specification for a BPM and, especially if you’re an Accountancy Partner in practice, just ask yourself if you could honestly complete all of those tasks accurately and on-time every month:
- Manage a team of payroll professionals
- Ensure the delivery of payslips and payroll reports to several hundred clients….
- ….every week, every fortnight, every month, every quarter
- Deal with clients, all of whom see themselves as the only payroll that matters
- Deal with colleagues, many of them trainees, and keep performance levels high
- Deal with the boss who wants regular accurate invoicing and everyone’s time to be accounted for. To the minute!
- Deal with HMRC, an organisation which is grossly under-staffed and has no appreciation of the job of a BPM
- Deal with pension companies who seem to exist in a different dimension
- Hit all the deadlines for payslips, BACS, FPS’s, EPS’s, pension feeds, employee notices
- While keeping internal systems up-to-date…..
- ….and implementing new management control systems to avoid errors
- And, while you’re at it, keep on top of all the changes in payroll legislation
- Etc. etc. etc.
Given the situation today, it isn’t a realistic option to “Keep Calm and Carry On”, bureaux simply have to change. And this is no time for rearranging deckchairs, it’s a time for pretty radical action.
This is the New Reality of running a payroll bureau and my next articles will highlight the successful strategies being employed by my clients along with a few recommendations of my own.