You’re One step closer to getting it right

As part of our mission to help you rock payroll we have created a series of blogs, written by our Sage experts, these are designed to help you deal with the daily challenges of running a successful payroll department.

Benoit Gruber, VP, Global Product Marketing at Sage shares with us how Payroll can help you find and keep your star performers.

Modern HR and Payroll technology can help you manage colleague performance and development. With workforce analytics, you can now find your star performers and keep hold of them.

Depending on your industry, the cost of your workforce is likely to be between 30-50 per cent of your total overheads. It’s probably one of the largest costs to your business.

The dream is to have a successful company full of high achievers and model colleagues. A world where everyone is motivated to push and move your business forward. You’re likely to have an idea who those individuals are already. They’re the ones who have an insatiable interest in your business, are reliable, great communicators and work consistently hard. They’re willing to take calculated risks but with good judgement at the same time. Entrepreneurial colleagues who can think differently are rare but important to have.

The automation of many payroll processes gives you room to ensure star performers are given the right rewards, conditions and opportunities to stay. Until recently, the valuable insight payroll can provide to a business has been underused. But the availability of tools to mine and analyse data means that businesses are waking up to its potential.

A good payroll system should provide data that shows you where your money is going and how you can benefit from your most valuable assets, your people.

Finding your star performers

Through payroll data you can collect information about salary, absence, overtime, training costs and return on investment. Cross reference this data with qualitative information you have about colleagues — how they are viewed in terms of your performance culture by their peers, superiors and teams — to develop a complete understanding of who your high achievers are.

Create a breeding ground for talent

Trend analysis allows HR to understand the working conditions that allow new stand-out talent to bloom.

For example, if a certain department has a low turnover rate and constantly good appraisals then using data to find out why will help you recreate the department’s environment across the entire business.

Technology can also provide tools that help you decide which colleagues could benefit from training — it provides valuable insight to inform decisions that a paper-based system could not do.

Turn your star performers into mentors who can help other colleagues who find the business more challenging and need inspiration.

Often the star performers expect support for self-directed training — HR is in an ideal position to help create innovative programs and bring in new training platforms.

Keeping your star performers happy

Top performing colleagues seek higher pay and greater opportunities. According to a US survey by Gallup, 32% of people cited a lack of promotional opportunities as a reason for changing jobs, ahead of 22% who claimed pay and benefits caused them to seek a new position. It’s important to identify the stand-out colleagues who are helping to drive the company forward, and do what you can to retain them.

Start by looking at payroll and performance data to make sure that your star performers are getting the remuneration they deserve for driving your business forward. This could mean better pay or bonuses, or simply positive feedback showing that you appreciate the extra hours they are putting in.

It’s also worth bearing in mind what your competitors offer in terms of salary, working hours, holiday and benefits – you need to be at the very least matching and ideally exceeding them.

You should also have a way to identify what your star performers value most. There is no point in investing in costly initiatives or training programmes if your colleagues aren’t going to benefit from them. Give them the opportunity to shape their own careers and determine how they are rewarded.

Left alone, star performers will see opportunities with competitors. Your payroll data gives you the chance to build a complete view of the talent in your business - what creates, motivates and retains the star performers, wherever they are in your organisation.

It's important to take notice of what payroll data tells you, because once a star performer has handed in their notice, it's already too late.

Benoit Gruber

VP, Global Product Marketing at Sage

As part of our mission to help you rock payroll we have created a series of blogs, written by our Sage experts, these are designed to help you deal with the daily challenges of running a successful payroll department.

Benoit Gruber, VP, Global Product Marketing at Sage shares with us why payroll is the untapped gold mine of business insight.

Payroll is one of the most commonly underused resources available to businesses when it comes to insight. It has the power to shine a light on your largest resource and overhead — your people.

In the past, the unfortunate perception of payroll was of a repetitive administration machine. But that’s changing. Innovative updates to payroll technology have delivered payroll a seat at the reporting table, and businesses are better able to analyse their greatest asset and largest cost.

Payroll now has room to play a more strategic and valuable role. Compensation for employees is not simply a cost to contain, but an important consideration that will save money and drive efficiency in the long term.

However, payroll professionals must use and understand the large amounts of data available to them if their businesses are to keep up with the competition. Research by Sage and IDG has found that companies with more effective data grow 35 per cent faster.

Reporting is crucial

As highlighted by our research, reporting is key to business success. Not only can it contribute to growth, but also the productivity of employees. Businesses with more usable data, increase productivity by 10 per cent.

For payroll professionals, it allows you to understand and make the best use of your company’s biggest capital investment — the employees. After all, the salaries and wages a business commits to the workforce has a direct impact on the money it makes.

Reporting and analytics are of immense value. And they can help in the two biggest financial priorities — cost reduction and forecasting, allowing your company to grow and succeed in a business world where every advantage counts. When you combine payroll data with qualitative elements such as performance culture, skills, behaviour and experience, it can help you to form a picture of the issues affecting business performance.

Make more of your payroll data

Payroll is a vital source of data in your business, and has the potential to have an immediate financial benefit. It can provide a monthly snapshot of your company’s health. Furthermore, it is by its nature, one of the most current sets of data in your business. Businesses are required by law to keep up-to-date payroll information, so there is no chance of you making decisions based on old news.

Five great places to start analysing payroll data

There are a number of payroll metrics that can give you a deeper understanding of how healthy your business is from a financial point of view.

1. Remuneration: salaries will be an obvious place to start. With these numbers, you can build other metrics into your analysis such as a return on investment (ROI).
2. Turnover: it’s not good news if you have a high staff turnover rate — it may signify a deeper problem within the business when it comes to areas such as conditions, morale and working culture. And it can cost money in lost productivity, recruitment and training.
3. Absence: Analysing data on sick days and holiday will help you understand when workers are more likely to be absent, and whether employees are taking their annual leave at the right time of year for the business.
4. Overtime: If employees are regularly working more than their agreed hours, consider what this means in terms of productivity and the way people are working. You can find out whether it's more cost-effective, for example, to hire part-time or additional staff.
5. Training costs: payroll departments can be under pressure to find ways to cut costs and improve efficiency. With a training cost metric, it’s possible to walk that tight line between making cuts and ensuring employees are upskilled properly.

Across each of these areas you’ll find a huge amount of data available to examine, and because it covers such a long period of time, it should be easy to start spotting trends. With the right technology it can give you a great platform for future planning, with the reassurance of knowing you have a constantly up-to-date view of your business. It should be the first place you look, before planning for the future.

Benoit Gruber

VP, Global Product Marketing at Sage

Single Touch Payroll, an ATO initiative, is designed to reduce red tape by simplifying the administration requirements of employee payroll, tax and superannuation by employers. As the ATO plans to move to a digital platform for all business interactions, this means that certain statutory reporting will occur in real time. This will eliminate the requirement to post-process returns on a weekly, monthly, quarterly or annual basis. This means that for example paper group certificates, would be banished along with the burden of reconciliation and distribution by employers.

Real–time digital reporting within payroll and HR is just one of the main features of this initiative. By using compatible business software, employers will be able to communicate with a multitude of departments simultaneously to easily produce the required information. Single Touch Payroll is planned to commence with a voluntary pilot in January 2017 and by 1 July 2018 all businesses with 20 or more employees will be required to use the automated interface. The ATO has been engaging with various members of the business community including Sage to understand all considerations required for the transition which includes approved business software solutions to deliver against obligations.

In 2012, the United Kingdom tax agency - HRMC - implemented a similar initiative known as Real Time Information (RTI) in consultation with payroll solution providers including the Sage UK payroll division. By working closely with the tax offices before, during and after implementation, we have been able to assist our customers in the preparation for the switchover by offering educational services and assets, seminars, webinars, help and support videos, as well as a built-in RTI support centre in our payroll products.

This UK experience provided detailed learnings that can be applied to the ATO initiative here in Australia. What worked well in the UK in terms of minimising pain points to customers was the close working relationship Sage was able to maintain with the HRMC. This included running a year-long pilot program, working to develop built-in RTI features in payroll products and being a trusted and knowledgeable advisor throughout the entire process. Now in Australia we have taken a similar approach and have been working collaboratively with the ATO to clarify requirements and give feedback to minimise the burden on stakeholders.

Representing the voice of our customers, having a support system in place to prepare customers for all eventualities and being a payroll partner rather than just a provider also served our UK team. Members of the Sage team were present and available to all our payroll customers in the UK during this process and we plan to apply a similar approach when Single Touch Payroll rolls out.

One of the many benefits of being part of a global organisation is the ability to share local knowledge and learnings across the network; information that can be localised and tailored for similar initiatives. Sage in Australia supports Single Touch Payroll and we're hoping to be in a more informed position to assist our customers, so they can benefit from this experience.

Although the initiative is not scheduled to go live until mid-2018, we have been collaborating with the ATO since the beginning of the Single Touch Payroll discussion and sees the eventual launch as a very positive step. Single Touch Payroll will bring significant and very positive change to businesses, employees and business solution software providers.

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