Payroll Technology Solutions – An Insiders Insight

In today's rapidly evolving business landscape, payroll technology is essential for ensuring efficiency and accuracy in managing employee compensation. To explore the latest advancements and best practices in this field, we interviewed Jeremy Mohamed, the Head of Payroll at Tugela People.

In this exclusive interview, Jeremy shares insights into his professional journey, the integration of payroll technology, and the challenges and triumphs he has encountered along the way.

To start, tell us how you initially found your way into Payroll

Twenty years ago, I began my professional journey, spending the first seven years immersed in various HR Business Partner and advisor roles.  Even in the early stage of my career, I naturally gravitated towards the technology, systems-oriented and process side of HR rather than some of the other people-focused areas.

My transition into payroll was not without its share of surprises. I moved to Australia for a period, and the company I was contracting with approached me with the opportunity to transition into a full-time position in Payroll. Initially, I was taken aback, thinking, “Payroll?  I’ve never considered working in Payroll before.” However, they expressed confidence in my aptitude for the role. Initially, I harboured doubts, feeling like I might be switching to "the other side." However, I gradually warmed up to the idea, especially when they mentioned that the role would involve managing the HR System, which greatly appealed to me. 

When I started doing payroll, I loved it. Being data and process-orientated, it fitted so well with my skill sets, and it turned out that having experience in HR and HR systems was a real advantage.  Knowing what HR does day in and day out allowed me to bridge the gap between HR's focus on the employee experience and the back-office operations. I was also able to mediate between HR and Payroll when things went wrong. When problems occur, which inevitably happens from time to time, it's easy for blame to be assigned, but the reality is rarely so clear-cut.

So, why do you think your process-oriented skills and approach made you a good fit for a role in payroll?

Oh, that's easy – that's how you make sure people are paid correctly, and that is what every payroll person wants to achieve first and foremost.  When you consider the employee journey, there are so many different processes and stakeholders involved, as well as potential points of failure that can impact how people are paid. Managing employee data involves multiple human touchpoints, and in case of any errors, it is usually due to a process error or lack of clarity or documentation of the process. It is exceedingly rare that the "system" is responsible for any errors.

As an example, consider a scenario where a manager learns of an employee's departure. Their immediate action might be to email their own manager and attach the resignation letter, assuming their duty is fulfilled. However, if this email remains unread in the inbox for a few days, missing the payroll deadline, the employee continues to receive payment despite their departure. While it's the manager's responsibility to inform payroll of the departure, without a clear process in place, they may not realise they've neglected a crucial step, thinking they've acted appropriately.  Today, the payroll landscape has transformed significantly compared to two decades ago. There is a heightened emphasis on compliance, necessitating the demonstration of robust processes and thorough documentation to auditors. Failing to meet these standards can lead to serious repercussions.

You mention the “human touchpoints” involved in the employee journey. With so many links between the end-to-end employee lifecycle, what can companies do to ensure payroll is run correctly?

 Managing payroll is a pivotal responsibility, serving as the ultimate destination for employee data changes and acting as the focal point for data consolidation. This involves monitoring new hires and departures from HR, tracking expenses, bonuses, and commissions from Revops or Finance, collecting timesheets from Resourcing, and overseeing pensions and benefits from Reward. Given the complexity of aggregating data from multiple departments, in my experience, it's imperative to have a dedicated team accountable for ensuring accurate outcomes.

I've observed instances where companies assign payroll duties to individuals—such as those in accounts payable or credit control— as just a small part of their overall responsibilities. However, these individuals often lack the time and expertise to get involved in all the HR and employee processes. Their role primarily involves processing the data provided to them, and any inaccuracies typically stem from receiving inaccurate information.  I believe in the necessity of having dedicated resources not only for executing payroll but also for proactively analysing the various changes occurring within the business that could affect payroll. This involves identifying potential gaps, investigating the root causes if issues arise, and ultimately rectifying any discrepancies. In essence, regardless of whose responsibility it may be, it falls on the payroll team to address and resolve any issues that arise.

 Ownership is key, and collaborating with all the different areas of the business, creating new checks and balances, and mitigating all the areas where problems and errors can occur is how companies can make sure payroll is run correctly.  At Tugela People, for example, the Payroll Outsourcing team are proactive with clients in advising and helping to implement best practices and processes that can prevent mistakes from being made rather than waiting for it to happen and blaming the client for sending the wrong information.

While we are on the topic of payroll errors, what is one of the biggest blunders you have seen in your time working in Payroll?

The costliest mistake I have ever had to address was when I inherited a payroll from someone who had left the organisation. I discovered that employee contributions were being deducted as if the pensions scheme was set up as a ‘net pay arrangement’. In this scenario the employee makes a tax saving in the payroll. However, the pension scheme was set up as a ‘relief at source’ scheme. This is where the tax saving is claimed by the pension provider from HMRC and paid directly to the fund.

This error resulted in employees receiving a double benefit, which had been happening for 7 years. When I first inherited the payroll, I didn't anticipate needing to conduct a thorough audit of the setup, including contacting the pension scheme. One tends to assume that everything is set up correctly from the start!

This error incurred costs amounting to hundreds of thousands of pounds, necessitating its write-off as a company liability.  Mistakes like these, if not caught early, pose significant risks.

If you were a Finance Director or Chief People Officer, what would you be thinking about when deciding to run payroll in-house vs outsourcing the payroll?

Important considerations include the company size and resources allocated for payroll, as well as the industry and the complexity of the payroll process. Questions to consider include: Is payroll primarily monthly and salaried with little to no changes? Or is it a weekly payroll with a considerable number of changes? Can the company afford an in-house team dedicated to payroll responsibilities? Furthermore, is it cost-effective or viable to have a team of people versus what it would cost to outsource the entire payroll process? 

 Relying solely on one individual responsible for Payroll leaves the business vulnerable to a single point of failure. Can the company take that risk if that person leaves or is absent for any reason?  We all know payroll has to work. A failure in Payroll can erode employees' trust in the organisation, and it’s the employees who keep the business running. Moreover, ensuring your people stay skilled and up to date with changes in the industry requires ongoing training and certifications. If managed in-house, you need the right tools to do the job, so acquiring and implementing the appropriate software adds another layer of responsibility to manage and maintain.

It's all about the appetite for risk.  By outsourcing payroll, you're essentially outsourcing the associated risks as well. When entrusting a service provider, there's an expectation of a certain standard of service delivery, with accountability if they fail to meet those expectations.

 Will payroll ever be a “humanless” task?

In payroll, there is a concept known as "The Big Button," envisioning a fully automated and systematised payroll process, eliminating the necessity for human intervention or interaction. This concept dreams of a future where payroll professionals may no longer be needed, creating a systematised payroll Eutopia! However, I don’t believe we will achieve this vision in our lifetime.  There are so many things to consider around compliance and the interpretation of it. While HMRC offers guidance, each business must interpret and apply it according to its unique circumstances and organisational context. Undoubtedly, technology facilitates quicker, more efficient processes. That said if machines are running payroll from beginning to end, then there is no need for people to train and learn and stay up to date. However, what happens if, one day, the machine encounters a scenario that it cannot handle and requires human intervention?

How does the Tugela People approach stand out in the market?

At Tugela People, our approach prioritises technology to deliver exceptional service. We leverage integration and automation extensively to reduce touchpoints and uphold data integrity. Complementing this technological foundation, we offer a personalised service delivered by qualified professionals. This ensures that you know us by name, fostering a close relationship where we become an extension of your team. Moreover, beyond payroll administration, a significant aspect of our expertise lies in implementing payroll software solutions for clients. Drawing from our experience in payroll operations, we provide valuable insights to help clients optimise their processes.

Discover more

If you would like to learn more about Tugela People's Payroll services and how we can address your requirements, visit our website for more details. You can also contact us directly at +44(0)1908 030360 or  info@tugelapeople.com. Alternatively, complete the ‘Get in touch’ form, and a member of our team will reach out to you.