In the wake of the COVID-19 pandemic, it was crucial for businesses to proactively anticipate and prepare for unforeseen events that may disrupt their operations. Among various aspects requiring careful attention, ensuring payroll continuity stands out as a critical factor.
Payroll plays a pivotal role within organizations, as it not only has to adhere to contractual and legal obligations, but it also directly affects the livelihood of employees. Consequently, any potential instability in payroll could have significant ramifications throughout a business. Creating and reviewing a payroll continuity plan demonstrates a commitment to safeguarding the operational stability of the organization and the stakeholders affected.
Steps in developing and reviewing a payroll continuity plan
The first and most important step in developing and reviewing a continuity plan is to identify potential risks that could impact payroll. These risks are classified into three broad categories:
- Economic (industrial action resulting in staff shortage)
- Environmental (natural disasters)
- Technological (hardware and software failures)
After the identification of potential risks, conduct a thorough assessment that takes into account several key factors:
- Timing of the event: when the event occurs impacts the response required. For example, a system outage of one day compared to a system outage of three days would warrant different responses, as well as an outage happening before or after payroll cut-off.
- Probability and severity of the risk.
- Potential impact to payroll.
With the assessment concluded, strategies must be developed to mitigate these risks. This can include protocols and procedures.
Automation
One effective strategy would be to harness the full functionality of your technology by using automation. By utilizing systems that can seamlessly execute scheduled tasks and generate reports automatically, you can mitigate risks to payroll processing whilst optimizing efficiency at the same time.
Cloud-based solutions are particularly advantageous as they provide convenient remote access to payroll processing.
As well as the benefit of having access to payroll data remotely, cloud-based solutions can accommodate changing business needs, such as growth. Furthermore, to prevent the impact of data loss, it is imperative to incorporate secure and regular data backups. Any continuity plan must be accurately documented, reviewed regularly and circulated to impacted parties. An effective communication plan ensures affected stakeholders are well-informed (particularly IT) of the disruption status and next steps.
Effectiveness of a payroll continuity plan
Additionally, a proactive approach must be taken to maintain the effectiveness of the plan. Communication methods must be reviewed and updated regularly, such as verifying and updating mobile phone numbers. Upon concluding the creation and review of your payroll continuity, ensure regular tests and reviews are scheduled. This will not only ensure that your employees know what to do but will also help flush out any flaws in the plan.
A systematic approach to a payroll continuity plan
Creating a systematic approach will determine readiness: defining the goals and outcomes, engaging the relevant stakeholders, using text exercises and simulations and conducting evaluations to identify gaps, strengths and weaknesses.
It is also important to recognize that other elements could create the need for a review, such as changes to regulations and the business landscape. Therefore, cross reference the business landscape against the plan; scalability is a change that would certainly have an impact on an existing continuity plan.
A thorough and regularly reviewed payroll continuity plan will maintain stability, regardless of unforeseen circumstances. By considering risks, implementing measures and fostering open communication, organizations can ensure their payroll operations remain trouble-free under all circumstances.
By Lateisha Holland, Business consultant
Lateisha has over 7 years’ experience in payroll and HR Operations in the FMCG sector. She joined the Strada Advisory Team in 2023 and supports clients with HR Transformation.
