HR & Payroll

[JuliaDP]

Hi Everyone

I work in the media industry and our current HR Department also has Payroll sit within it. We have been instructed that our Payroll function will be moving under Finance. I was wondering how many of you have payroll sit outside of the HR Function and how this works effectively?

[Pete]

I work as an HR Consultant in a large company (over 2000 staff), a few years ago Payroll moved from HR to Finance - the justification being that it was a transactional service ("just a more complicated accounts payable service" was essentially the position advanced by the intellectually challenged individual who came up with the idea).

Even though we are physically closely located, the operational relationship has suffered and most importantly we lost direct influence over the HR Info System. As a result we have limited accurate HR Metrics available, the payroll functionality has been designed around making it easy to pay people and track in the Financial management system, not around reporting and monitoring what is actually happening (e.g. leave balances, performance reviews, training needs, vacancy management etc).

Also, the Finance team direct the payroll manager what to do and how to do it, often with advice that conflicts with what is in our employment agreements and other provisions (e.g. holiday pay, deductions from wages etc) that are prescribed in law/contracts. This has resulted, on occiasions, in the payroll system and the processing administrators doing what the sytem requires or that Finance tell them to do, rather than doing what the law requires, and has exposed us to a number of risks and created more individual work for the HR team as we try to track, identify and correct their mistakes once an employee complains to us via the union that payroll have got it wrong again.

Essentially, the argument goes - what do you want your payroll and HR info system to do? If you just want it to process wages and pay people on time, then let finance manage it as they know about tracking and paying bills. But if you want it to record, monitor and report HR metrics, and to support the correct application of HR policy, practice and Law, then leave it with the people who know about those things, and who also have to deal with the fall out when anything goes wrong or when staff are not paid correctly.

[belinda]

Julia

I also work within HR, and within the different positions Payroll has sat within HR and in Finance.
1. When Payroll sat in HR, we had access to everything, had the HRIS side of the system, security, ran reports when required, the system was set up to run the required reports for Finance for EOM. There were not issues. Everyone was under Schedule 1A.

2.When payroll sat in Finance, I continually had to audit the payroll to ensure they entered the details in correctly. There were 6 different payrolls and they were a mix of award and AWA/ITEA. I constantly found that the person in Finance had no idea about awards and when audting the payroll was requesting changes made to employees classifications. Employees/Manager were advised that any changes to terms & conditions of an employee had to come through HR first for authorisation. I kept a tight lease on prayoll, as they did not have any idea. However these employees were not from a Payroll background, and were Finance Officers.

I believe it does depend on your company, what you want to get out of the system and what controls you want to have.
Belinda

[Pete]

You raise a couple of important points Belinda - the success of wherever payroll are located depends on the relationship and communication between HR and Payroll. This is particularly vital if Payroll are "managed" by non HR or Payroll experts.

It makes our roles as HR Consultants difficult if we are not able to regularly update Payroll on developments and also to ensure that they check with us before changing anything. One of the difficulties is that employees (and their Unions, Lawyers and advocates) as well as the Courts don't care what the payroll system needs or how it calculates and pays anything, they only want what is required/entitled to occurr, no excuse based on "payroll system efficiencies" is ever good enough to excuse an error or failure.

[Helen]

Julia I thought you might find this article entitled 'F&A or HR - Where is the best fit for Payroll outsourcing?' by Alsbridge, http://www.discusshr.com/node/462 of some use. I know it refers to the placement of payroll in an outsourcing situation however many of the points they make about both functions often lacking the 'granular clarity' of payroll are equally as relevant for an in-house payroll decision.

[PatriciaS]

Frankly the Payroll function doesn't exist within the realm of HR in the USA. Australia is far behind this practice, as payroll should always remain a function of accounting/finance and not be a part of HR.

You will find big companies do not have a payroll function within HR

[kevinh]

Frankly the Payroll function doesn't exist within the realm of HR in the USA. Australia is far behind this practice, as payroll should always remain a function of accounting/finance and not be a part of HR.

Patricia,
I think you will find in Australia more often than not payroll is an accounting/finance function, rather than part of HR.

Although HR needs to become involved or at least informed if Payroll screws up!

Regards,
Kevin

[PatriciaS]

Hi Kevin, I just finished up a role where part of my HR management duty was to assist in processing the payroll each month with the Finance Manager - I really didn't enjoy doing it!

If you look at alot of ads, quite a few say Payroll /HR or part of the HR function.

[Jobs in HR]

If you look at alot of ads, quite a few say Payroll /HR or part of the HR function.

Patricia, we run an HR job board ( Jobs in HR ) which publishes thousands of new Australian HR job ads each year. We are very particular about the content and we only publish a payroll related job if it is somehow tied to the HR function.

Over the last 4500 job ads we have published, only 7% even mentioned the word Payroll.

Regards,
Cam

PS. Maybe you have been seeing Payroll job ads listed under HR on the large multi discipline job boards, where there is no quality control and recruiters routinely cross post their ads in categories where they don't belong